The future of virtual banking in Hong Kong
13 Dec, 2018 12:12
source: 香港奇点财经Singularity Financial
Mobile payment and online financial transactions have become quite common these days.As retail banks are grappling with high labor and rental costs, virtual banks should have a bigger role to play.
Earlier today ,the Hong Kong Monetary Authority (HKMA) has provided an update on the processing of virtual banking applications.
As the first round of licence approvals – due by the end of the year – will enable new competition in a city that ranks as one of the most heavily saturated for banking services globally.
The HKMA had earlier indicated that around 30 applications had been received as at the end of August 2018. Today, the regulator said that about one-third of these applicants did not submit sufficient information on certain critical aspects of authorization criteria. Subsequently, the HKMA informed these applicants that their applications would not be processed.
Of the 29 virtual bank licence applications before the HKMA, submissions have been made by WeLab, HKT, Standard Chartered Bank, as well as an alliance between Australia’s Airwallex, Bank of East Asia (BEA), and mainland firm Sequoia Capital China.
Tencent-backed Airwallex shifted its headquarters to Hong Kong from Melbourne in August.
If approved the banks will compete in a crowded market as Hong Kong has 187 traditional banks, including some of the biggest players globally such as HSBC Holdings.
“Hong Kong is already a heavily-banked market, with a large number of players relative to the size of the population,” said James Lloyd, partner and Asia-Pacific fintech leader at EY.
One of the applicants, online lender WeLab, is focused on the bay area, according to co-founder and chief executive Simon Loong.
“Virtual banks have the benefit of being built with a digital strategy and implementation for the digital consumer and we see great potential in Hong Kong and the Greater Bay Area,” he said.
And for applicants, in order to run a virtual banking business successfully, operators have to do their know-your-customer procedures thoroughly. Double customer verification is a must.
Customers should be immediately notified if their bank accounts are stolen.
If they operate properly, virtual banks should have plenty of room for growth in Hong Kong. 如果运作得当，虚拟银行应该有足够的增长空间。