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How are consumers using fintech?

A Hong Kong university is surprised by the role of wealthtech in its survey of consumer attitudes toward fintech.



Typical analyses of a market’s fintech adoption focus on the number of startups or products. A new survey of over 2,000 consumers in Hong Kong by a local university sheds light into how people are actually using digital finance.

The study was carried out by Hong Kong Polytechnic University’s business school. (PolyU also operates the AMTD Fintech Centre, and DigFin is owned by AMTD.) Three surprises emerge from the findings, regarding virtual wealth, NFTs, and demographics.

The study finds 54 percent of respondents have used a digital financial service. That’s not bad given the city had not been known for using fintech prior to the Covid pandemic.

Covid plus an aggressive push from the government, especially the Hong Kong Monetary Authority, are changing habits quickly. But 54 percent means there is still a long way to go.

Virtual wealth

The questionnaire dug down into categories of financial service being adopted digitally. Here it found the biggest surprise of the findings: “Uptake of virtual wealth is bigger than we expected,” said Jack Poon, a PolyU professor.

Wealth isn’t the most popular category. That would be digital payments, used by 91 percent of respondents. Payments are not only an obvious building block but have also been the focus of the government’s recent fiscal stimulus policies, with consumption vouchers made available to the entire population via electronic wallets.

The survey found 57 percent of people use a virtual-wealth product, more than the 55 percent with a virtual bank account. (Another 41 percent report having a virtual insurance policy.)

PolyU then asked people about frequency of use. Again, digital payments are becoming staples: for those who report using them, 32 percent of people use a digital payment app at least once a day.

Only 7 percent use a virtual wealth app daily, and 9 percent use a virtual bank daily. Although banks had a slightly higher frequency of use, that’s still a strong showing for wealth, given bank accounts are supposed to be more fundamental to people’s lives.

The survey asked people if they go virtual in more than one financial category, and found a high correlation among people who use digital payments, virtual banks, and virtual wealth – again a strong endorsement of the wealth or broker proposition.

But not all “virtual wealth” products are the same. PolyU didn’t distinguish between online brokerage accounts and investment apps. Hong Kong has always had an equities trading culture, so this seems to have permeated the digital world as well.

However, the survey didn’t ask whether people use apps for short-term speculation, long-term investing, asset allocation, or other nuances.


The survey also included NFTs and “virtual assets” among its categories. It found 23 percent of respondents have used virtual assets – and 26 percent have used non-fungible tokens.

The prevalence of NFTs was notable compared to virtual assets. The survey asked people if they buy NFTs to collect or to trade, and found an almost even split: 52 percent buy them as collectibles.

That’s a significant portion of people in the NFT space. The survey was conducted over a nine-month period so it’s not clear how the data might have been skewed following November’s FTX collapse. Nonetheless, Poon says the strong showing suggests the space will need more attention.

“In the US there are rules for NFTs around KYC and anti-money laundering, but none in Hong Kong,” he said. This is also creating a gap versus Hong Kong’s licensing of virtual-asset service providers and incoming rules for stablecoins.

The popularity of virtual assets and NFTs also corresponds to people who use online brokers: 93 percent of people holding virtual assets also use a virtual wealth service.

Given that these are mostly online brokerage accounts, the overall picture is that Hongkongers have taken to online trading and speculation, be it of equities or crypto products. While payments are the biggest use case, banking – virtual or via traditional banks’ digital apps – are usually the next most popular service.

Hongkongers have traditionally used investment tools to speculate, while relying on real estate for their stable, long-term wealth. They seem to have migrated that habit to the digital realm.


The third notable outcome is that the user base for digital finance in Hong Kong is older than in other markets.

While few people over the age of 50 bothered to respond to the survey, it found the biggest users of digital finance are aged 30 to 49.

“In the US and Europe, fintechs target Gen Z,” Poon said. “Not here.” Indeed, the survey results found younger people weren’t very keen on digital finance.

The clue may reside in other factors. The survey asked a range of demographic and finance questions, in the hunt for correlations that would explain user behavior. Most of these didn’t unearth anything of interest: gender, education, and other factors aren’t significant differentiators.

The only strong correlation it uncovered was that people who own real estate are much more likely to use digital finance.

Given property prices have made owning a flat a pipe dream for most people over the past two decades, this could explain why Hong Kong’s fintech users are older than elsewhere. Many young people don’t have the wherewithal to speculate or otherwise engage with financial services. Digital finance is a tool, or a toy, for the comfortable.

People with low levels of education and lower incomes, as well as the elderly, are the most resistant to trying digital finance. Trust is the biggest barrier.


Poon says the data suggests a few ways to improve digital adoption.

One is to remember that consumers don’t actually think in terms of “bank” or “wealth”. They have a holistic notion of their wants and needs. Regulation, on the other hand, is very product-oriented, which is why service providers are too.

If authorities want more digital adoption, they may need to think about how to make regulation more flexible around different types of products, Poon says.

Secondly – and related – is the need to bring NFTs into the regulatory fold. Right now these are unregulated, but to consumers they are becoming part of how they behave, as speculators or investors.

Third is to tackle remaining frictions to adoption. Many small merchants refuse to accept digital payments. They usually don’t want to pay the overhead for point-of-sale systems. The example of credit cards, which typically charge merchants 3 percent of sales for access to card processing networks, may have also turned mom-and-pop shops off the notion of digital payments. (A particularly frustrating quirk in Hong Kong is that most taxi drivers are cash-only.)

Poon says the government may need to step in with incentives or ways to lower the cost of going digital to win over the holdouts.

He acknowledges the survey raises as many questions as it answers. It didn’t cross-reference usage of digital products with traditional accounts. Nor did it query small business owners, or ask about cross-border payments or other international use cases (a big deal for little Hong Kong, nestled against mainland China).

Another missing topic is open banking and data sharing. A future survey could find ways to ask people about lifestyle use cases that might shed some light on this, because open banking has so far been a flop in Hong Kong. Similarly, the HKMA’s Commercial Data Interchange, a database that’s supposed to share data among merchants and banks, has disappointed. These are areas that will require a rethink among bureaucrats, and a survey might help them redesign these initiatives.

Nonetheless the PolyU work shows the city’s consumers are taking part in a fairly rapid transition to digital finance, with virtual wealth driving uptake beyond the more obvious payment functions.

Covid was one driver. So too has been crypto hype as well as HKMA’s push to get Hong Kong banks to be more digital. These drivers have reached their limit. It’s going to be up to both industry innovators as well as policymakers to take digital finance among Hong Kong consumers to the next level.

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