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Hong Kong Monetary Authority (HKMA)

Ex-Hong Kong Secretary for Financial Services and the Treasury Chan Ka-keung joins WeLab virtual bank

Online lender among first batch of 29 applicants for virtual banking licences

PUBLISHED : Wednesday, 19 September, 2018, 6:01am
UPDATED : Thursday, 20 September, 2018, 7:59am

Former Hong Kong Secretary for Financial Services and the Treasury Chan Ka-keung has joined WeLab Virtual Bank, which has applied for a licence in the city, as chairman, he said on Tuesday.

Chan joined WeLab, the virtual bank’s parent company, as a senior adviser in July, his first appointment since leaving the government in July 2017. WeLab, an online lender, serves more than 30 million customers in Hong Kong and mainland China.

Hong Kong draws 29 applications for virtual bank licences

The financial technology company, a home-grown Hong Kong unicorn, is also among the first batch of 29 applicants for virtual banking licences, which will be issued by the Hong Kong Monetary Authority, the city’s de facto central bank.

“WeLab is a home-grown fintech company, which has a sound risk-management system. It has invested in technology and security measures to provide innovative banking services to customers. As I am confident about the future of the company, I have agreed to take up the chairman’s role,” Chan told the media on Tuesday. He will, however, “only act as non-executive chairman”.

“It is a very positive move for the HKMA to introduce virtual banking this year, as well as its Faster Payment System this week. These are very important measures for Hong Kong,” he added.

WeLab co-founder Simon Loong was present for the announcement. A former banker with Standard Chartered, Loong help set up WeLab five years ago with a money lender’s licence in Hong Kong, and has since teamed up with mainland Chinese partners to allow customers to apply for loans through the internet or smartphones.

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“We are targeting younger customers who are between 20 and 35 years old, who are not the traditional banks’ target clients. Many traditional banks focus on clients who are over 40 or 50 years old, as they borrow larger sums of money. We believe by adopting technology, we can offer small loans but can still make a profit. We want to target tech-savvy customers,” said Loong.

About 70 per cent of the fintech company’s customers are between 20 to 40 years old, while customers in this age group account for only 30 per cent of the clientele at traditional banks, Loong added.

WeLab joins fintech race to become Hong Kong’s first licensed virtual bank

Thanks to the use of technology such as chatbots and facial recognition, WeLab only needs 700 employees in Hong Kong and mainland China to served its 30 million customers. “Our customers have increased by eight times over the past two years, but our staff has only increased by 1.8 times,” said Loong.

In July, the company applied to list on the main board of the Hong Kong stock exchange. There was some speculation in the market that it would raise US$500 million, but Loong declined to comment on the matter.