Even though 2019 was a rough year for many Chinese technology companies as a result of the trade war Washington launched at China, their prospects seem to be growing brighter as we approach the end of 2020, notwithstanding the COVID-19 pandemic.

Instead of "notwithstanding the pandemic", perhaps I should have said "because of the pandemic", since the coronavirus is undoubtedly turbocharging a financial technology revolution all over the world, and more notably in China. Consumer behavior is changing to accommodate COVID-19, perhaps forever, and the banking and financial industry needs to adapt to these changes, otherwise it risks being left behind.

One of the elements helping China's Fintech revolution is precisely the fact that China's economic recovery is taking place much faster than expected: The Chinese mainland's economy expanded by 4.9 percent in the July-September quarter over the same period a year earlier, as consumers returned to shops and restaurants, accelerating its rebound from COVID-19 lockdowns at the start of the year. China is now leading the charge for a global recovery based on its latest gross domestic product data.

On top of that, China's new development plan may push its economy past that of the US within a decade: President Xi Jinping opened a meeting in Beijing on the Oct 26 week to map out the next phase of economic development. China's 14th Five-Year Plan (2021-25) is expected to center on technological innovation (hence the importance of Fintech), a cleaner environment and economic self-reliance. We must bear in mind that the Five-Year Plan is one of the most important policy blueprints that sets medium-term goals for the country's economic and social development.

The South China Morning Post last month released its China Fintech Report 2020, which provides an in-depth analysis of how the sector is rapidly developing in the mainland. According to the report, nearly 90 percent of Chinese consumers use Fintech to pay for almost everything in their daily lives while most small and medium-sized enterprises use Fintech to run their businesses in a cost-effective manner.

The report also analyzed the mainland's emergence as the world's biggest market for mobile payments. The total payment volume was well in excess of 200 trillion yuan ($30.6 trillion) in 2019, compared to just $100 billion in the US. As of March 2020, 776 million people in China were using mobile payment services, making purchases and sending cash digitally, with the vast majority using either Alipay or WeChat Pay payment platforms.

A few examples of this revolution are China's new Central Bank Digital Currency, the digital yuan, as well as the rise of virtual banks in China, and particularly in Hong Kong. As to China's new CBDC, China's Ministry of Commerce announced on Aug 14 that a pilot run of the country's CBDC will begin in several new areas very soon, including the Guangdong-Hong Kong-Macao Greater Bay Area. Virtual banks have been approved by the Hong Kong Monetary Authority, even though not all of them are operational. These virtual banks will become a key feature in the coming smart banking era, signaling the digital transformation of the banking sector.

Virtual banks, also called neobanks, primarily deliver retail banking services through the internet or other electronic channels instead of physical branches. The HKMA believes that the development of virtual banks will promote Fintech and innovation in the region.

Can Hong Kong play a vital role in China's Fintech scene growth? It's just a matter of time since Hong Kong has been developing itself into a leading Fintech hub. Ernst & Young reported that Hong Kong enjoyed a 67 percent consumer Fintech adoption rate as of 2019, a sharp increase from 32 percent just two years prior.

If Hong Kong is to maintain its status as an international banking and financial hub, it would need to embrace new industry technologies. It is on track developing itself into a leading Fintech hub and it has the potential to develop much faster now if it can leverage its involvement in the Greater Bay Area blueprint. It also helps that COVID-19 is changing consumer behavior.

Indeed, we can expect a positive symbiotic Fintech development in both the mainland and Hong Kong simultaneously. This can only bring the two sides closer together in their parallel development.

The author holds a doctorate in real estate law and economics, and has worked as a business analyst in Hong Kong. He is currently a member of the Blockchain, Digital Banking and Greater Bay Area Committees at the Fintech Association of Hong Kong.

The views do not necessarily reflect those of China Daily.