FinTech innovation and knowledge flows in Hong Kong’s financial sector: a social network analysis approach

Abstract

Purpose This paper aims to examine how financial technology (FinTech) knowledge from foreign firms flows into and among elite commercial banks in Hong Kong’s financial sector to drive innovation. Design/methodology/approach Using social network analysis and regression analysis on a novel database of patents held by Hong Kong’s elite commercial banks, this paper examines the relationships between network position and FinTech knowledge flow. Findings This paper finds four untold patterns of innovation and inequality in Hong Kong’s financial sector: only three banks are responsible for all the FinTech knowledge entering Hong Kong; most foreign FinTech comes from the USA through Hong Kong and Shanghai Banking Corporation, whereas most FinTech from China enters through Fubon Bank and Development Bank of Singapore; older banks and banks with more connections to firms inside Asia are more likely to import FinTech; the most beneficial sources of FinTech for a bank’s network position are firms from outside Asia. Originality/value Despite the well-documented volumes of cross-border and cross-continental movement of financial institutions in Hong Kong, there is little work on the knowledge flows that underwrite this mobility. This paper addresses this gap by using FinTech knowledge flows to map the distribution of innovation, network position and competitive advantage in Hong Kong’s financial sector.