Fintech investment declined 3.7% in 2019 to US$53.3 billion as deals in China dropped off dramatically, according to a report published by Accenture in February. The slow in China deal flow can be attributed in part to the protracted U.S.-China trade war. Investor enthusiasm for the China market has cooled amidst an uncertain business environment. China's economy grew 6.1% in 2019, the slowest pace in three decades. At the same time, it would have been hard for China to equal its 2018 deal tally, buoyed by Ant Financial's mammoth US$14 billion funding round.

It is important to note that some of the most high-profile fintechs which raised millions of dollars last year have yet to break even, never mind post a profit: Revolut, N26, the fintech units of Grab and Gojek, to name a few. Yet, that did not stop investors from continuing to support their costly expansion. Accenture's data show that the 92% drop in China's fintech investment was the main reason for the modest decline in global fintech investment last year.

While virtual banks and mobile wallets may be some things that may come to mind when one thinks about the possibilities of fintech expansion in Asia Pacific, the region is also home to one of the largest untapped markets in the world that few seem to be paying attention to- Islamic finance.

To name a few, Indonesia, Malaysia, Brunei, and Pakistan are all Muslim-majority countries that are located in the Asia Pacific region, where some 986 million believers make up the majority of the fastest-growing religious group in the world. An estimated $3.2 trillion in halal lifestyle spending will be expensed by 2024, according to the 2019 State of the Global Islamic Economy report from DinarStandard.

Back in 2016, when the European Union (EU) released its General Data Protection Regulation (GDPR), lawmakers from the rest of the world welcomed it as a pioneering model to study and cite. So, when European Commission President Ursula von der Leyen announced in 2019 that her organisation had ambitions to take GDPR-like leadership in regulating Artificial Intelligence (AI), technologists and governance professionals across the globe took note. Ms. von der Leyen stated in a speech before the European Parliament last November, "With the General Data Protection Regulation we set the pattern for the world. We have to do the same with artificial intelligence."

Roughly 100 days later, in February 2020, the EU published the strategy paper, "White Paper on Artificial Intelligence - A European approach to excellence and trust." Disappointingly, an initial reading of the document suggests that regulators in Asia and the rest of the world should not expect GDPR-like leadership from Europe on the responsible use of AI. The authors of the EU white paper were certainly limited by the tight, 100-day deadline that was imposed upon them. Nevertheless, from an AI governance perspective, their report and its proposals seem timid, rather than bold. There is little that compares it to the ambitions that the GDPR showed for protecting data privacy. Consequently, the direction of AI governance may continue to be driven by countries like China, whose 2017 Artificial Intelligence Development Plan (新一代人工智能发展规划) highlighted their focus on quietly influencing international standards.

Hong Kong entered 2020 in recession and wracked by political unrest. It remains Asia's paramount financial center for now, but its future looks uncertain. Holding onto incumbents is less of a problem than persuading tomorrow's rising stars to base themselves in the city.