Top Hong Kong virtual banks seek new frontier in second year of operations, eye marriage with wealth management services

Wealth management is our next priority, say CEOs of ZA Bank, WeLab Bank, while Mox Bank wants to expand its credit card services
Virtual lenders have revolutionised banking over the past year, says Chan Ka-keung, WeLab Bank chairman and former Secretary for Financial Services and the Treasury

Banking & finance

Enoch Yiu

Published: 12:00pm, 8 Aug, 2021

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Three of Hong Kong’s top virtual banks are eyeing wealth management and credit products as they step into their second year of operations.

The banks, of which there are eight in total, cannot have physical branches and must offer their services only through mobile phones or the internet. These lenders started operating last year as part of a major fintech push by the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank.

“The next product offering [that we are aiming for] is wealth management. We are applying to the Securities and Futures Commission [SFC] for the relevant licences,” said Rockson Hsu, the CEO of ZA Bank, the city’s first and largest virtual bank.

The rapid growth enjoyed by Hong Kong’s virtual lenders suggests that fintech-driven banking can compete with 155 traditional banks and their 1,200 branches in a city of 7.2 million people. The city has emerged as a leader in digital banking as a result, Eddie Yue Wai-man, the monetary authority’s CEO, said in March.

At the same time, wealth management presents the other new frontier for Hong Kong’s banking sector. The marriage of such services with virtual banking is viewed as expanding both beyond what is currently available in the market.

Rockson Hsu, the CEO of ZA Bank, says the virtual lender aims to continue being the No. 1 such bank in Hong Kong. Photo: Twitter

ZA Bank, Mox Bank and WeLab Bank form the top three in terms of the number of customers. ZA Bank had 300,000 customers as of March and HK$6 billion (US$771 million) in deposits as of the end of last year. Mox Bank, the virtual lender backed by Standard Chartered, is the city’s second-largest such lender, with more than 150,000 customers and deposits totalling HK$5.6 billion as of last week.

WeLab Bank, the third-largest, had as of last month a customer base of about 130,000, as well as HK$2 billion in deposits and HK$700 million in personal loans. As of June this year, all eight banks had 840,000 customers and HK$21 billion in deposits, according to HKMA data.

“As a new bank, the speed of our growth is encouraging and this strong result is driven by our user-centric approach and fintech DNA. And our aim is to continue being the No. 1 virtual bank in Hong Kong,” said ZA Bank’s Hsu. The lender currently offers loans, deposits, insurance, remittance and debit card services.

Deniz Guven, Mox Bank’s CEO, wants to expand the virtual lender’s credit card services. Photo: Enoch Yiu

Mox Bank wants to see its customer numbers reach 200,000 by the end of this year, CEO Deniz Guven told the Post. Guven also wants to expand the virtual lender’s credit card services, which were launched in May and have already seen more than 5 million transactions. The bank plans to introduce a new borrowing service in the third quarter.

“Given that credit card services are loved by Hong Kong people, we’re proud to be the first virtual bank in Hong Kong to launch Mox Credit,” Guven said. “Our mission from the very start was to win the hearts and trust of Hong Kong people. We have managed to garner one of the highest app ratings on Apple Store and Google Play, compared with other financial institutions,” he added.

WeLab Bank wants to increase its customer base as well, to 200,000 by the end of the year, according to its CEO, Tat Lee. The lender is also eyeing wealth management services.

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“Wealth management will be our next focus. We will collaborate with Allianz Global Investors on developing digital wealth management solutions for customers,” Lee said last week. He added that the lender had already applied for the appropriate licences.

“The virtual banks project has revolutionised the banking industry over the past one year, by introducing many digital banking services,” said Chan Ka-keung, WeLab Bank chairman and former Secretary for Financial Services and the Treasury.

The next revolution will centre on investment, he said. “There are many people who do not know how to invest. WeLab will offer a wealth management solution to make it easy for them to invest their money.”

This article appeared in the South China Morning Post print edition as: Virtual banks eye credit, wealth management services

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