Hong Kong Monetary Authority grants first batch of virtual banking licences
Livi VB Limited, SC Digital Solutions Limited and ZhongAn Virtual Finance Limited are the first entities to secure the coveted virtual banking licenses.
In line with previously announced schedule, the Hong Kong Monetary Authority (HKMA) has just made it clear who gets the first virtual banking licenses. The regulator has granted virtual banking licences under the Banking Ordinance to Livi VB Limited, SC Digital Solutions Limited and ZhongAn Virtual Finance Limited.
Mr Norman T.L. Chan, Chief Executive of the HKMA, said, “We are pleased to grant the three virtual banking licences today. The introduction of virtual banks in Hong Kong is a key pillar supporting Hong Kong’s entry into the Smart Banking Era. It is a major milestone in reinforcing Hong Kong’s position as a premier international financial centre. I believe that virtual banks will not only help drive FinTech and innovation, but also bring about brand new customer experiences and further promote financial inclusion in Hong Kong.
“As virtual banks will have no physical branches, they will rely on the internet for customer acquisition and for the delivery of banking services. I believe that virtual banks will have to offer innovative and customer-centric services in order to attract customers. Moreover, in targeting the retail public and SMEs as their main client base, virtual banks should help promote financial inclusion in Hong Kong.
According to their business plans, these three newly licenced virtual banks aim to launch their services within 6 to 9 months.
The HKMA added it is making good progress in the processing of the remaining five virtual bank applications.
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.
