February 28, 2024

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New digital banking platform launched in Hong Kong

A virtual bank based in Hong Kong has confirmed the public launch of its digital banking services. It is notably the only stand-alone firm to acquire a virtual bank license from the Hong Kong Monetary Authority (HKMA), the city-state’s de facto central bank that’s also responsible for promoting the efficiency, integrity and development of its financial system.

The new virtual bank reportedly began pilot services back in April 2020 (under the HKMA Fintech Supervisory Sandbox).

The bank is a homegrown digital bank that acquired an operational license in April 2019. It’s one of only eight virtual bank licenses in Hong Kong.

It claims to be completely digital, and has been developed for customers to take advantage of “a range of next-generation digital services 24/7 from their mobile phones.”

The digital bank allows account opening to be completed within minutes. There are zero monthly fees for maintaining accounts, the bank’s management confirmed.

The services being offered include time deposits, along with a virtual debit card and real-time payments via the Faster Payment System (FPS). The WeLab debit card is a numberless card that has been issued with the help of Mastercard.

The bank’s public launch has come after the introduction of ZA Bank by ZhongAn/Sinolink, and Airstar Bank by Xiaomi/AMTD.

The bank is the third digital bank to launch in Hong Kong at a time when the Coronavirus crisis has accelerated the shift towards digital platforms and services.

The bank appears to have entered a saturated market with around 155 traditional lenders and eight digital banks that are offering services to Hong Kong’s over 7 million residents.

The Bank is offering a 4.5% annual rate on deposits, starting from HK$10 (appr. $1.30). The company is also offering a time-limited 8% rebate on customer spending.

The CEO of the bank stated that the Covid-19 pandemic offers opportunities and challenges. It has forced many people to work and shop from home. Many people are more comfortable using their mobile phones to open an account and conduct banking transactions.

The Chairman of the bank stated that the bank aims to offer a high deposit rate and cash rebate to help customers better cope with the Covid-19 outbreak. Hong Kong residents can earn more by saving their cash handouts with the bank or by spending with our debit card.

Last year, the HKMA awarded eight digital bank licences. Some of the other licensees include Mox, Ant Bank, Livi, Ping An OneConnect, and Fusion Bank. These banks are still in the process of completing their pilots.

A partner at stated that all the virtual banks which have launched to date have, understandably, focused on customer acquisition in the form of promotional discounts, time-limited interest rates, referral bonuses, and so on.

The real challenge will be engaging customers beyond these initial launch offers. Right now, we believe that only a handful of new players will truly be able to differentiate.

OpenGov Asia previously reported that since the Hong Kong Monetary Authority has started issuing banking licenses to several local virtual banks in the first half of 2019, the Hong Kong Institute of Bankers (HKIB) has swiftly strengthened its training offering in the fields of Fintech, cybersecurity and digital banking.

The institute has launched more than 30 related courses and seminars, ranging in subjects from risk management, business development, blockchain, data security to global regulatory and compliance that has been attended by over 2,000 participants.

Over the next year, the HKIB will continue efforts to promote Fintech development in Hong Kong. As the Fintech ecosystem in Guangdong-Hong Kong-Macao Greater Bay Area continues to grow in prominence, the institute remains committed to improving the cross-border and cross-sector financial and market knowledge of banking practitioners through its professional training programmes to help local professionals sustain their competitiveness.

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