Hong Kong Challenger Banks Set to Contend Status Quo
(Hong Kong - 2 August 2019) Hong Kong challenger banks are expected to launch operations in Q4 2019 with customer experiences in the United Kingdom (UK), mainland China and Japan set to provide a guide of how quickly uptake will progress. UK ‘neo’ or ‘virtual’ banks such as Starling Bank, N26, Revolut and Monzo offer mobile based banking services and tailor their services for freelancers and self-employed customers who travel frequently.
Rapid client onboarding, low fees for basic services, higher interest rates and better cash rebates have aided virtual lenders win customers away from incumbent banks.
According to McKinsey, virtual banks can account for about five percent of all retail customers in western Europe and the United States. MYbank, the virtual banking arm of Ant Financial, lent a total of 1.2 trillion yuan as of Q3 2018 to nine million small companies in mainland China.
Starling has no physical branch presence however customers can deposit funds through 11,500 Post Office branches across the UK. Its Mastercard debit cards can be used overseas without a fee. In Japan virtual banks are highly popular, especially among younger customers. Volt Bank, the first virtual bank in Australia to receive a full banking licence, will start operations by Q4 2019 and offer free savings accounts with higher interest rates. The Volt app will also let customers compare energy bills and phone plans, so that they can shop for better deals at other providers.
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