Published by Asia Asset Management – 14th May 2019
Hong Kong’s de facto central bank has issued the last four of eight virtual banking licences to a group of domestic and Chinese companies as it looks to facilitate financial innovation in the city.
The new licensees are Ant SME Services (Hong Kong), Infinium, Insight Fintech HK, and Ping An OneConnect Company, which are expected launch services in six to nine months, the Hong Kong Monetary Authority (HKMA) says in a statement on May 9.
The first four licences were issued over the last two months.
“The HKMA is now working closely with the eight virtual bank licensees to prepare for the launch of their business operations in accordance with their plans,” Norman Chan, the central bank’s chief executive, says in the statement.
Infinium is a joint venture between Chinese technology giant Tencent Holdings, Industrial and Commercial Bank of China (Asia), Hong Kong Exchanges and Clearing, private equity manager Hillhouse Capital, and Hong Kong entrepreneur Adrian Cheng.
Insight Fintech HK is a joint venture between Chinese smartphone maker Xiaomi and Hong Kong financial conglomerate ATMD.
Ping An OneConnect is a financial technology unit of Chinese insurer Ping An Group. Ant SME Services (Hong Kong) is a unit of Ant Financial Services Group, an affiliate of Chinese e-commerce giant Alibaba Group.
The HKMA unveiled guidelines for virtual banking licences in February 2018 and said it would award eight.
The first three were issued this March to joint ventures led by Standard Chartered Bank (Hong Kong), BOC Hong Kong (Holdings), and ZhongAn Online P&C Insurance. Hong Kong-based risk management technology firm Welab Digital became the fourth licensee in April. All are expected to launch in six to nine months.
Virtual banks are a key component of the HKMA’s smart banking initiatives introduced in 2017 and “will certainly facilitate financial innovation, enhance customer experience and financial inclusion”, Mr. Chan says.
Apart from virtual banking, the initiatives include a faster payment system, and closer cross-border collaboration.
The addition of the eight virtual banks increases the number of licensed lenders in Hong Kong to 160.
