Banking News

Traditional banks come under pressure in Hong Kong

Traditional banks come under pressure in Hong Kong

(9 May 2019 – Hong Kong) Hong Kong’s monetary authority has issued four virtual banking licences to applicants affiliated with a trio of China’s largest technology companies as well as the city’s stock exchange, in a move to speed up disruption and innovation in one of the world’s best served financial centres.

The four new licences have gone to Ping An Insurance’s subsidiary Ping An OneConnect, Ant Financial Services’ unit Ant SME Services, a Xiaomi-AMTD Group venture called Insight Fintech HK, and the Infinium consortium that includes Tencent Holdings, the Industrial and Commercial Bank of China (ICBC), and Hong Kong Exchanges and Clearing (HKEX).

The latest permits add to the four that the HKMA has already issued since March to spur competition and innovation, where the city of 7 million residents is already being served by 160 licensed banks.

“The launch of virtual banks in Hong Kong, a key component of the smart banking initiatives, will certainly facilitate financial innovation, enhance customer experience and financial inclusion,” said the HKMA’s chief executive Norman Chan Tak-lam.

The latest crop of virtual bank licences, which can expect to begin offering banking services in six to nine months, will help the city catch up with mainland China and Japan in disrupting bricks-and-mortar financial services.

In China, five of the country’s largest tech companies have already been operating virtual banks since 2014. Hong Kong’s first virtual banking licences were issued in March and in April to online lender WeLab, and three separate ventures led by Standard Chartered Bank, Bank of China (Hong Kong) and ZhongAn Online.

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