The rapid expansion of the digital economy, driven by the widespread adoption of digital channels, has positioned digital identity (ID) solutions as a critical enabler for Hong Kong's financial services industry, says a report by a Hong Kong government advisory council.

These channels enhance transaction security, improve efficiency and increase inclusivity, finds the report – Embracing Digital ID: Accelerating Digital Transformation in Hong Kong's Financial Services Industry – published by the Financial Services Development Council (FSDC).

By fostering innovation and complying with regulatory standards, the report concludes, digital ID solutions are instrumental in strengthening the city’s status as a leading international financial centre.

To foster an ecosystem conducive to the development and adoption of digital ID systems, with a focus on driving innovation and collaboration within the financial services industry, the report recommends that the industry and government:

• Explore full-fledged implementation of the iAM Smart initiative and support the development of private digital ID wallets
• Establish a trust framework for the digital ID ecosystem
• Enable interoperability through enhanced infrastructure and legal frameworks
• Harmonize digital ID standards for seamless cross-boundary interactions
• Promote trusted digital ID adoption and enhanced educational engagement.

“Hong Kong has consistently demonstrated its commitment to driving technological advancements over the years,” says Laurence Li, chairman of the advisory council. “As Hong Kong progresses, it is crucial to prioritize digital ID opportunities and ensure that our digital infrastructure and regulatory frameworks are robust to support this transformative journey.

“Digital ID solutions are at the core of this expansion, facilitating secure and efficient online engagements. It is essential for Hong Kong to thrive in the evolving global landscape.”