Fintech can be catalyst to make Hong Kong a next-level financial hub: Broadridge CEO
Embracing technology platforms for applications such as electronic proxy voting, private debt underwriting and trading of repurchase (repo) agreements can help Hong Kong elevate its standing as Asia’s top financial hub, according to a leading US fintech firm.
Technologies that simplified investor engagement had been a catalyst for growth in other markets, said Tim Gokey, CEO of New York-listed Broadridge Financial Solutions, adding that fintech could enhance corporate governance and product innovation to help the city strengthen its connections with mainland China and the wider world.
“We’re investing in the region and are excited to be part of the rapidly growing Hong Kong market, which is emerging as a leading financial hub in Asia and the primary point of connectivity between the mainland and global markets,” Gokey said in an interview during a trip to the city last month.
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His comments came before financial regulators in Hong Kong and mainland China unveiled a series of measures last month to allow cross-boundary bond repo business and to strengthen the city’s fixed income and currency markets – all initiatives that had been discussed and anticipated among market participants for a number of years.
“We see a strong opportunity to support that growth by enhancing trust and transparency in corporate governance,” added Gokey, whose firm doubled its Asian team to nearly 500 over the past five years, with Hong Kong accounting for more than 80 people.
As companies increasingly turned to capital markets, beyond banks, for fundraising, the transparency and trust of corporate governance became essential, he said, pointing to the US as an example.
Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout alt=Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout>
“Strong corporate governance is one of the key drivers behind the success and confidence in US capital markets,” he said. “It’s not the sole answer, but a crucial contributing factor.”
Broadridge’s corporate-governance offerings, including proxy-voting platforms, have a global reach, processing shares held in street names at more than 1,000 broker-dealers and custodian banks. Its proxy services covered about 80 per cent of outstanding shares of US publicly listed companies in 2023.
“Leveraging technology to simplify investor engagement has fuelled growth in markets like Japan, and building similar trust and transparency in Hong Kong is vital for its ambition to enhance connectivity between the mainland and the rest of the globe and become Asia’s leading financial hub,” Gokey said.
A pain point that Broadridge aims to address is improving the distribution of information on corporate-governance processes, which was often well documented but not effectively shared.
Digitising materials and enabling convenient access and voting through an app or broker platform would make it easier for retail investors to engage with the companies they invested in, he said.
“Our platform brings transparency and enables retail investors – particularly those using digital brokers in Hong Kong who may hold shares across China, the US and Europe – to conveniently vote their shares globally under different regulatory regimes,” he said.
For institutional investors, the firm was developing a data-driven voting platform that used artificial intelligence to apply preset rules to votes, moving beyond traditional recommendation-based systems to make proxy voting more efficient and customised, Gokey said.
Another focus area for Broadridge in Asia is private debt – a growing asset class in the region. The firm’s cloud-based platform aimed to help asset managers with tasks from underwriting and working through deals to keeping deals on their books and record-keeping, reducing risks associated with managing collateralised loan obligations.
Gokey said the fintech company also saw opportunities in tokenised assets and their clearing and settlement in Hong Kong, as market conditions and regulatory initiatives increasingly aligned with participants’ needs.
Hong Kong authorities have launched several plans to future-proof the city’s financial infrastructure in recent years, including initiatives like stablecoins, electronic trading platforms and tokenised products.
“We believe [our solution] is well-suited for this market due to clients’ need for liquidity, financing and risk management, as well as regulators’ push for digital assets,” Gokey said. “By leveraging existing infrastructure, we can help jump-start repos on the distributed ledger in Hong Kong and build confidence around these instruments.”
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