FinTechs eye Hong Kong digital banking market
Written by Hannah McGrath
Banks, FinTechs and telecom firms are reportedly considering bids to join the first generation of virtual banks in Hong Kong, as the territory’s regulator prepares to issue its first online-only banking licences.
Companies considering a potential bid to the Hong Kong Monetary Authority (HKMA) are said to include Ant Financial, the FinTech affiliate of Chinese retail giant Alibaba, Chinese investment group Tencent, and Ping An Insurance, a Chinese holding conglomerate, according to sources who spoke to Reuters.
Potential licensees will go up against Standard Chartered, one of Hong Kong’s three incumbent banking giants, which announced its intention to apply in June, along with Hong Kong telecoms operator HKT Trust and Hong Kong-based FinTech firms WeLab Holding and TNG Wallet.
The deadline for the first round of applications is this Friday, with HKMA expected to issue licenses by the end of the year. If granted a license, holders would be able to offer a full range of digital banking services including deposits, lending and investments.
Others expected to apply for include Bank of China (Hong Kong), Xiaomi, a Chinese smartphone maker, and ZhongAn, an online insurance firm.
Hong Kong could provide fertile ground for firms looking for fast growth in the virtual banking space. A recent report by Accenture found that only 53 per cent of consumers in Hong Kong are satisfied with their banks, suggesting a large market of customers willing to embrace new services offered by digital challengers.
Standard Chartered has announced that Deniz Güven had been appointed chief executive of its Hong Kong digital banking operations. He is tasked with building a new banking model to deliver digital solutions with a “human touch.”