Good morning, everyone.

It is my great pleasure to welcome you to our latest engagement activity since the inaugural FiNETech in April.  I would like to extend my gratitude to the Insurance Authority (IA) for co-hosting today's seminar, which brings together a diverse group of about 400 professionals from the insurance, banking, and financial technology sectors.  This gathering presents a unique opportunity to explore how we can foster greater synergy across different sectors, particularly through innovation and Fintech in the realm of bancassurance.

As we all know, the advent of Insurtech has introduced new opportunities and benefits to the financial industry.  When it comes to bancassurance, there remains significant untapped potential.  And let us acknowledge the inherent synergy between banking and insurance.

Banks have a vast customer base and extensive distribution networks, while insurance companies also have strong expertise in risk diversification and product offerings.

By working together with the aid of Fintech, banks and insurers can deliver integrated and more comprehensive financial solutions that meet the diverse needs of customers.  One of the key enablers of this synergy is data. Banks and insurers collect vast amount of data that, when combined, can potentially provide a 360-degree view of the customer for more tailored services.

With customer consent, banks and insurers will be able to ingest more information to come to a holistic understanding for providing customised products and services at critical life stages, powered by advanced technologies including artificial intelligence (AI), predictive analysis, and Distributed Ledger Technology (DLT).

For example, AI-powered chatbots can provide instant customer support, while DLT can help execute immutable and transparent transactions such as automated claims processing and secure policy issuance.  By embracing these technologies, we can create a seamless and efficient bancassurance ecosystem, which benefits customers by providing faster and more reliable services.

According to recent research¹, the bancassurance market is projected to reach a total of US$ 1.7 trillion by 2027, with a compound annual growth rate of over 6%.  In Hong Kong, one-third of retail banks have already implemented Insurtech and it is expected that all retail banks will adopt Insurtech to support their bancassurance services by 2025².  And this significant growth is primarily driven by innovations.

Innovative practices alongside the expanding scope of data exchange inevitably bring challenges and risks such as frauds and data breaches.  A balanced approach is therefore crucial for nurturing an innovative and secure Fintech ecosystem.

The HKMA, with an objective to facilitate responsible innovation, has launched a cross-sectoral Fintech Supervisory Sandbox (Sandbox) where innovative proposals including bancassurance initiatives have been tested before full launch.  I would like to encourage financial institutions and Insurtech service providers to jointly make full use of the Sandbox.  It provides a safe testing ground for creative ideas, offering supervisory support to the development of new services.

Building on the favourable outcome of the Sandbox, we are pleased to announce today a new collaborative initiative:  HKMA-IA Open API Framework Linkage. This will streamline the mutual adoption of APIs, in applicable areas, for possible use cases across the banking and insurance sectors.

There are currently over 250 bancassurance-related APIs on the Open API directory hosted by the Hong Kong Science and Technology Park.  Banks can make use of Open APIs to streamline insurance application processes, while insurance companies are also making use of banks’ Open APIs to automate real-time premium payment  and even allow for the use of credit card reward points to settle premium.

With an expanded scope of data under the API Framework Linkage, innovation becomes limitless.  We hope that these standardised APIs will in turn allow Insurtech service providers to develop more innovative solutions, harnessing the untapped potential of data that currently resides separately in the banking and insurance sectors.

To maximise this potential, I am excited to work closely with all stakeholders to further embrace a collaborative approach through open dialogues, sharing insights, challenges, opportunities, and leveraging data and technology to promote customer-centric solutions and drive sustainable growth.

In closing, I would like to express my gratitude to our distinguished speakers and once again, to the IA for co-hosting this seminar and working together to foster a supportive regulatory environment including our Open API Framework Linkage.  My heartfelt thanks also go to the Hong Kong Association of Banks, Hong Kong Federation of Insurers, Hong Kong Science and Technology Parks Corporation, and FinTech Association of Hong Kong for continuous support on promoting Fintech adoption, and to KPMG and Quinlan & Associates for powering this event.

Without further ado, let’s start discussions and share insights that will help shape a dynamic and innovative future for Insurtech and bancassurance.

Thank you.

¹ Bancassurance Market Report, Business Research Insights, 2024 https://www.businessresearchinsights.com/market-reports/bancassurance-market-109009

²  Tech Baseline Assessment, HKMA, 2022