Published by Asia Asset Management – 29th Mar 2019
Hong Kong’s de facto central bank has granted the first batch of three virtual banking licences to joint ventures between Hong Kong, China and UK companies from the financial services, technology and communication sectors.
The three virtual lenders – Livi VB Limited, SC Digital Solutions Limited, and ZhongAn Virtual Finance Limited – are expected to launch services within six to nine months, the Hong Kong Monetary Authority (HKMA) says in a statement on March 27.
HKMA unveiled guidelines for the licences in February 2018 and plans to issue eight in total. There were 33 applicants and the central bank says it’s “making good progress” on processing applications for the five remaining licences.
“The introduction of virtual banks in Hong Kong is a key pillar supporting Hong Kong’s entry into the Smart Banking Era. It’s a major milestone in reinforcing Hong Kong’s position as a premier international financial centre,” HKMA Chief Executive Norman Chan says in the statement.
Livi VB is a three-way tie-up between Bank of China (Hong Kong), Beijing Jingdong Financial Technology Holdings, and UK conglomerate Jardine Matheson Holdings.
SC Digital Solutions is a joint venture between Standard Chartered Bank, Hong Kong communication technology company PCCW, Hong Kong Telecommunications, and Ctrip Finance, the financial technology unit of Chinese travel service provider Ctrip.com International.
ZhongAn Virtual Finance is a partnership between ZhongAn Online P&C Insurance Co. and property developer Sinolink Group, both based in China.
“I believe that virtual banks will have to offer innovative and customer-centric services in order to attract customers,” Mr. Chan says. “Moreover, in targeting the retail and small- and mid-sized enterprises as their main client base, virtual banks should help promote financial inclusion in Hong Kong.”
Including the three virtual banks, there are now 155 licensed lenders in Hong Kong.
