Hong Kong’s appeal as a virtual banking hub is about to be put to the test as first online lenders arrive
- With 187 traditional banks, entrants seen going beyond HK for customers
Hong Kong’s appeal as a virtual banking hub will soon be put to the test, as the first round of licence approvals – due by the end of the year – will enable new competition in a city that ranks as one of the most heavily saturated for banking services globally.
Analysts say virtual banks are likely to look beyond Hong Kong’s borders for customers, a move that could see expanded banking services regionally, and overseas.
The Hong Kong Monetary Authority will issue the first batch of virtual bank licences by the end of this year. This is one of the seven measures announced by the HKMA in September last year to boost smart banking in the city.
Virtual banks operate purely online and do not require a physical branch network.
Of the 29 virtual bank licence applications before the HKMA, submissions have been made by WeLab, HKT, Standard Chartered Bank, as well as an alliance between Australia’s Airwallex, Bank of East Asia (BEA), and mainland firm Sequoia Capital China.
Tencent-backed Airwallex shifted its headquarters to Hong Kong from Melbourne in August.