Standard Chartered unveils plans for Hong Kong virtual bank license

Maria Nikolova

The bank has established a task force to study the details of the revised guidelines on the authorization of virtual banks as stipulated by the Hong Kong Monetary Authority.

Standard Chartered Bank (Hong Kong) Limited is planning a push into fintech innovation, as the bank has earlier today announced its plans to apply for a virtual banking license in Hong Kong. The move is a part of the bank’s strategy of advancing financial inclusion, fintech innovation and bringing enhanced client experience in Hong Kong.

The bank says it has formed a task force to study the details of the revised guidelines on the authorization of virtual banks as set out by the Hong Kong Monetary Authority (HKMA).

Samir Subberwal, Regional Head, Retail Banking, Greater China and North Asia, Standard Chartered, said, “We have talked to clients and we started with the realities of Hong Kongers’ lives. People do not want another account with a different brand, they want their financial lives simplified. That is why we believe that the launch of a virtual bank will give clients the choice of going completely digital for their everyday banking needs.”

In the end of May 2018, 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 HKMA has pointed out that a key objective of introducing virtual banks in Hong Kong is to help promote financial inclusion by leveraging on the banks’ IT platforms that would lower the incremental cost of taking in additional customers. The HKMA therefore remains of the view that virtual banks should not impose any minimum balance requirements or low-balance fees on customers.

Furthermore, given that virtual banking is a new business model in Hong Kong, the HKMA considers it wise to require virtual bank applicants to develop an exit plan. The purpose of an exit plan is to ensure that, should it become necessary, a virtual bank can unwind its business operations in an orderly manner without causing disruption to the customers and the financial system.

The regulator has also noted that the minimum paid-up capital requirement of HK$300 million is stipulated in the Banking Ordinance and is applicable to all licensed banks. It is neither possible nor appropriate to lower the minimum capital requirement for virtual bank licensees.

HKMA warned back then that those companies that have not been able to submit a substantially complete application to the HKMA by August 31, 2018, are most unlikely to be included in the first batch of virtual bank applications to be processed by the regulator. In processing these applications, priority will be given by the HKMA to those applicants which can demonstrate that (i) they have sufficient financial, technology and other relevant resources to operate a virtual bank; (ii) they have a credible and viable business plan that would provide new customer experience and promote financial inclusion and fintech development; (iii) they have developed or can develop an appropriate IT platform to support their business plan; and (iv) they are ready to commence operation soon after a licence is granted.

Read this next

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)

Opinion

Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

Institutional FX

Finalto launches Prime of Prime offering on LSEG’s FX Matching venue

“By combining our expertise in Prime of Prime services with LSEG’s robust trading platform, we aim to empower clients with the tools and resources needed to navigate the FX market with confidence.”

Digital Assets

Tether’s USDT stablecoin nears 100 billion in circulating supply

USDT, the world’s largest stablecoin, has reached close to 100 billion in circulating supply, currently sitting at around 99.5 billion. Its market capitalization, which reached over $100 billion at one point, is calculated by multiplying the supply by the price.

<