HK authorities try to play down concerns about virtual banks aggravating manpower shortage

Maria Nikolova

Under the plans of the eight licensed virtual banks, the manpower required for the first three years of their operation represents a tiny fraction of that of Hong Kong’s banking sector.

The granting of the first eight virtual bank licenses in Hong Kong has been seen as a positive development for the financial services sector and the fintech industry. However, it turns out that the establishment of virtual banks has also sparked certain concerns – this becomes clear from a publication by the Hong Kong Legislative Council today.

Hon Chan Chun-ying has explained that some members of the banking industry have relayed that the granting of eight virtual banking licences by the Hong Kong Monetary Authority (HKMA) so far may aggravate the shortage of manpower of the various professional grades in the industry, which will affect the operation and development of the banking industry in the long run.

In this connection, he asked whether the Government has estimated the numbers of members of the various professional grades to be employed by virtual banks in each of the coming three years; (i) of the respective percentages of such numbers in the relevant total numbers in the banking industry, and (ii) out of such numbers, the respective numbers of those who will come from conventional banks and from places outside Hong Kong.

Mr James Lau, Secretary for Financial Services and the Treasury, replied that the HKMA does not collect statistics on the number of practitioners of professional grades in the banking sector.

According to the business plans of the eight licensed virtual banks, the manpower required for the first three years of their operation only represents a tiny fraction of that of the banking sector in Hong Kong. The HKMA expects that the impact of virtual banks on the manpower of the banking system should be manageable.

The HKMA does not collect information on the background of employees of virtual banks and is not in a position to provide any estimate to this end.

In March 2019, HKMA granted the first batch of virtual banking licences under the Banking Ordinance – the first three such licenses were issued to Livi VB Limited, SC Digital Solutions Limited and ZhongAn Virtual Finance Limited.

Let’s recall that, in the end of May 2018, the HKMA 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. A key objective of introducing virtual banks in Hong Kong is to promote financial inclusion by harnessing the banks’ IT platforms that would lower the incremental cost of taking in additional customers.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<