Report on “Cross-boundary Payment and Settlement Systems in the Greater Bay Area: Current Practices and Recent Developments”

The Hong Kong Monetary Authority has issued a press statement to inform that the Hong Kong Institute for Monetary and Financial Research (HKIMR), „the research arm of the Hong Kong Academy of Finance (AoF)“, published a new report entitled “Cross-boundary Payment and Settlement Systems in the Greater Bay Area: Current Practices and Recent Developments”.
The report provides an overview of the current status of cross-boundary payment and settlement systems within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and describes recent developments in this context. It is particularly worth noting here that new cross-boundary wealth management and investment schemes such as Stock Connect or Bond Connect have spurred investors‘ interest. This interest is likely to increase even further in the upcoming years, so the report, making efficient and effective cross-border payment and settlement systems even more important than in the past.
The report further examines the key challenges identified by market participants as regards cross-border payment and settlement. Such challenges include the high costs for operating and maintaining systems, the low speed when transferring funds across borders, plus the limited transparency over the current status of fund transfers. Drivers of these challenges, so the report, are primarily „fragmented data and technology standards, legacy infrastructures, and long transaction chains.
The report concludes by noting some issues, financial regulators may take into consideration to remedy at least some of the challenges noted above. These considerations are based on a recent market survey among financial market participants, including asset managers, banks, and insurance companies, and are briefly illustrated in below graphic.
Graphic 1 – Considerations for Improving the Current Cross-Border Payment and Settlement Infrastructure

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For more detailed, comprehensive information, please refer to the original report.