What to expect as launch of Hong Kong virtual banks nears
- No fees for basic services, higher interest rates and better cash rebates have helped virtual lenders attract customers in other markets
- Virtual banks account for about 5 per cent of retail customers in western Europe, US
Virtual banking in countries such as the United Kingdom, Japan and mainland China could help draw a picture of the sector in Hong Kong, where these lenders are expected to launch operations in the fourth quarter.
A quick account opening process, no fees for basic services, higher interest rates and better cash rebates have helped virtual lenders draw customers away from traditional banks.
“Hong Kong’s digital banking landscape could follow a similar path to jurisdictions such as the UK, where virtual banks have been steadily building their customer base over time,” said Tom Jenkins, partner at KPMG China.
According to consulting giant McKinsey, virtual banks can account for about 5 per cent of all retail customers in western Europe and the United States.
In the UK, virtual – or “challenger” – banks such as Starling Bank, N26, Revolut and Monzo offer all banking services on mobile phones, and tailor their services for freelancers and self-employed people who need to travel a lot.
