China’s 9F Group aims for Hong Kong virtual bank license
Mainland Chinese fintech expert 9F Group has partnered with local and international firms to apply for a virtual banking licence in Hong Kong.
Hong Kong’s push to introduce and regulate the new business model of “virtual banks” has attracted the traditional banks, as well as fintech firms. According to a report by the South China Morning Post, Chinese financial technology company 9F Group has partnered with local and international firms to apply for a virtual banking licence in Hong Kong.
The company, established in Beijing in 2006, has declined to name its international partner but explained the fintech company was operating a virtual bank overseas. Other partners include Hong Kong-listed fintech company VST ECS. 9F is reported to hold a controlling stake in the joint venture.
“We would like to use Hong Kong as a platform for 9F Group to expand internationally. This is why we have taken over Primasia Securities Asia, a Hong Kong securities firm, and Yue Tung Wealth Management, an insurance broker, in the past two years. And now we want to get a virtual banking licence,” Samuel Lin Yanjun, chief executive of 9F’s international business and CFO of the group, was quoted as saying.
In June this year, Standard Chartered Bank (Hong Kong) Limited unveiled its plans to apply for a virtual banking license in Hong Kong. This happened about a month after the Hong Kong Monetary Authority published its guidelines on the authorization of virtual banks. During the public consultation on the matter, there was broad support for virtual banks to operate in the form of a locally-incorporated entity with no physical branches.
The concept of “virtual banks” is gradually gaining ground in Hong Kong, according to a recent survey, which was conducted during the second half of June 2018 and covered 811 local SMEs. The study shows that whereas 46% of surveyed SMEs have heard about “Virtual Bank”, 23% are reluctant to adopt virtual banking service. For those interested in using the service, “Cybersecurity” (77%) and “System stability” (61%) are the key factors in service selection.