Hong Kong virtual banks could soft-launch some services in fourth quarter, monetary authority says

The city’s new virtual banks could potentially have a soft launch of some services as soon as the fourth quarter of this year, according to Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority.

Speaking at the Hong Kong Institute of Bankers conference on Thursday, Yuen said the de facto central bank had not imposed a “six to nine month” timeline on the banks to begin business after the first licences were granted in March. So far, eight licences have been granted by the HKMA.

Reuters, citing sources, reported last week that the debut of Hong Kong’s virtual banks was likely to be delayed until early next year, in part because of protests and civil unrest over a controversial extradition bill that has sent the city into one of its worst political crises. The disruption caused by the unrest since June has hit tourism, restaurants and retailers the hardest, and led some economists to predict the city’s economy will contract this year.

“We are still working hard with those [virtual bank] licensees before they can launch the business formally. I’m not making predictions,” Yuen said.

“The latest indications from some of those licensees is you will begin to see some services launched, perhaps in a soft-launch way, in the fourth quarter of this year. I do expect this process to be gradual.

“In the case of a lot of technology initiatives, in terms of apps or new gadgets, they tend to, sort of, launch in a moderated and gradual manner. I think the same can be expected of virtual banks in Hong Kong. They will launch their services in a staged manner.”