The newly licenced digital banks in Hong Kong include joint ventures involving Standard Chartered and Bank of China Hong Kong. The Hong Kong virtual banking licences will enable financial institutions to carry on branchless savings and loans functions.
Hong Kong’s protest has continued into the fourth month. Due to the protests that, the new digital banks will now launch their online operations in early 2020, the media reports said.
Senior executive of one of the licenced banks told the media that, “This form of banking service is mainly aimed at the youth, millennials, and many of them are out on the street these days joining the protests. It will be difficult to launch a brand campaign around them and attract their interest when their priority is clearly not having another bank account.”
In March, Hong Kong awarded the virtual banking licences to three groups — joint ventures led by StanChart and Bank of China (Hong Kong), and a subsidiary of ZhongAn Online.
The licences were granted to increase competition between traditional banks and digital banks in Hong Kong’s banking industry. Banking authorities expect innovation, customer experiences, and financial inclusion to improve after the banks introduce their digital offerings.
Several non-banking companies are expected to join the industry using new models and methods. The media reports said that 33 financial providers had applied for the licences.
Virtual banking is not a new concept in Asia or in Europe. For example, Japan Net Bank launched its first virtual bank in 2000.