The Hong Kong Monetary Authority has reportedly signed off on four new virtual banking licenses to the highest valued fintech company in the world and three other companies. They came into effect immediately.
According to their business plans, the newly licensed virtual banks plan to launch services in around 6-9 months.
The fresh allocation takes the number of licensed virtual banks in Hong Kong to eight.
To date, licenses have also been allocated to three FinTech firms; the number of licensed banks in Hong Kong has now increased to 160.
HKMA’s Chief Executive noted that the agency is now working closely with the eight virtual bank licensees to prepare for the launch of their business operations in accordance with their plans.
The launch of virtual banks in Hong Kong, which is a key component of the Smart Banking Initiatives, will certainly facilitate financial innovation, enhanced customer experience and financial inclusion.
The HKMA pledged to closely monitor the operations of the virtual banks after they launch, including customers’ reactions to the new banking services and any impact of their entry to Hong Kong’s banking sector in general.
The authority plans to conduct a comprehensive assessment around one year after the launch of the first virtual banking service.
According to a survey, 68&% Hong Kong consumers are already using their smartphones or tablets to check their bank accounts at least once a week, and 43% use their devices to connect with banks and insurers to learn more about products or services.
Meanwhile, only 59% of Hong Kong customers said they liked their current bank, and only 24% believe their banks do a good job in offering an attractive digital bank proposition.
Smart Banking Initiatives
In September 2017, Hong Kong Monetary Authority (HKMA) unveiled a number of initiatives that prepare Hong Kong to move into a New Era of Smart Banking.
The Chief Executive of the HKMA outlined how the HKMA will take lead and help the banking sector to rise to a higher level and embrace the enormous opportunities brought about by the convergence of banking and technology.
One of the initiatives is the promotion of Virtual Banking. The HKMA welcomes the introduction of virtual banks in Hong Kong and will consult the industry to review and amend the Guide to Authorization of Virtual Banks issued in 2000.
It was noted that upgrading of Hong Kong’s banking system to a new and higher level of Smart Banking will be both convenient and will help meet the rising aspirations and demands of customers, banking and technology must converge sooner rather than later.
In the new era of Smart Banking, the industry, the fintech community and the HKMA must work together to transform the financial ecosystem of Hong Kong.
Smart Banking will offer full interconnectivity amongst retail and corporate customers and allow financial services and transactions to be undertaken with great mobility, speed, ease and safety. Concurrently, the right balance between promoting financial innovations and according to appropriate customer and investor protection needs to achieve.
Virtual banking – a major milestone for HK
OpenGov Asia reported that Hong Kong’s position at the forefront of the banking industry and as a FinTech leader is reinforced by the recent issuance of three new virtual banking licenses by the Hong Kong Monetary Authority (HKMA), according to the InvestHK’s Associate Director-General.
While Hong Kong is considered Asia’s leading financial centre and has always been at the cutting edge of technological advances in FinTech, the virtual banking licenses is a massively important milestone for Hong Kong, a turning point in the development of its banking sector.
Hong Kong is a city that’s seeing rapid change thanks to the growth of its FinTech sector, which now numbers more than 550 FinTech companies.
In conjunction with its central role in the development of the Greater Bay Area, Hong Kong is truly Asia’s leading FinTech hub.