Hong Kong virtual banks target billion-dollar wealth management fees as HSBC, Chinese banks slip up
- Four of the city’s online banking platforms intend to compete for a slice of advisory and investment fees in next business leap
- HSBC, other traditional lenders held HK$2.7 trillion worth of online investment products for clients as of June 30: HKMA data
ZA Bank, Mox Bank, WeLab and Livi intend to offer wealth management services on their platforms later this year to improve or shorten their path to profitability, according to senior executives.
The focus on wealth management is seen as the next business leap since virtual banks started signing up customers in March 2020, just before the Covid-19 pandemic shifted more consumers and transactions onto mobile and internet sites.
“We believe the launch of the wealth management services will provide a stable fee income to our company, and hence a path for us to deliver a profit,” said Tat Lee, chief executive of WeLab Bank, whose backers include Li Ka-shing’s CK Hutchison and Sequoia Capital. “We can now offer fund products and wealth advisory services for investors.”
Hong Kong’s traditional lenders had conducted HK$2.7 trillion worth of transactions in online investment products for their clients by the end of June 2021, according to data published by the Hong Kong Monetary Authority (HKMA). That is double the volume at the end of 2019, underscoring the potential in the business through digital platforms.