Date
17 November 2019
The Hong Kong Monetary Authority hopes the virtual banks will facilitate financial innovation, enhanced customer experience and financial inclusion. Photo: Photo: HKEJ
The Hong Kong Monetary Authority hopes the virtual banks will facilitate financial innovation, enhanced customer experience and financial inclusion. Photo: Photo: HKEJ

HKMA grants four more virtual banking licenses

The Hong Kong Monetary Authority (HKMA) granted banking licenses to four more virtual banks that will only offer services online, bringing the total to eight so far and the number of licensed banks in Hong Kong to 160.

The four, which followed three others that acquired the license on March 27 and one on April 10, are Ant SME Services (Hong Kong) Limited, Infinium Limited, Insight Fintech HK Limited and Ping An OneConnect Company Limited.

All of them are connected with major mainland corporations, including Ant Financial, the financial services affiliate of Alibaba Group, Tencent Holdings (00700.HK), Xiaomi Corp (01810.HK), and Ping An Insurance (02318.HK, 601318.CN) respectively.

They are expected open for business in about six to nine months.

“We are pleased to grant four more virtual banking licenses. The HKMA is now working closely with the eight virtual bank licensees to prepare for the launch of their business operations in accordance with their plans,” HKMA chief executive Norman Chan Tak-lam said in a statement.

He said 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 Hong Kong Economic Journal reported.

Infinium Ltd. is a joint venture of Tencent, Hong Kong Exchanges and Clearing Limited (HKEx, 00388.HK), Industrial and Commercial Bank of China (Asia) Limited, Hillhouse Capital Group and Perfect Ridge, owned by Adrian Cheng Chi-kong, who is executive vice-chairman of New World Development (00017.HK).

The company said it will focus on providing services to retail customers, small and medium-scale enterprises, and those who are currently still unable to benefit from the traditional financial system.

Insight Fintech HK, which is set up by smartphone maker Xiaomi (90 percent) and AMTD Group (10 percent), pledged to provide Hong Kong residents and SMEs with personalized, intelligent and convenient smart banking services.

It is expected that the ultimate goal of four, with their mainland background, is to serve both Hong Kong and mainland customers once they are allowed to conduct cross-border businesses, industry insiders said.

The HKMA said it will closely monitor the operations of the virtual banks, including customers’ reactions to the new modes of delivery of financial services as well as the impact of the virtual banks on the banking sector in general.

A comprehensive assessment of the situation will likely be conducted about one year after the first virtual bank has launched its service, according to the authority.

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