Top News
HKMA grants first licenses for virtual banking
Last Updated: 2019-03-30 16:50 | China Daily
 Save  Print   E-mail

Chinese mainland internet companies are at the cutting edge of virtual banking in Hong Kong, as they strive to ratchet up their presence and strengthen their position in the financial technology race.

The Hong Kong Monetary Authority (HKMA) on Wednesday granted the first batch of licences to firms that have partnered with Standard Chartered, Bank of China (BOC) Hong Kong Holdings and ZhongAn Online P&C Insurance.

The much-awaited license, which attracted more than 30 city-wide applications last year, allows institutions to offer services online instead of operating brick and mortar branches.

The three newly-licensed virtual banks, going by the name of Livi VB, SC Digital Solutions and ZhongAn Virtual Finance, not only are a sign of Hong Kong's determination to "reinforce its position as a premier international financial center," but underscore the active involvement of Chinese mainland fintech companies in the city's efforts to shake up its traditional banking industry.

JD Digits, formerly known as JD Finance - an arm of Chinese mainland e-commerce firm JD, together with BOC Hong Kong Holdings and Jardines, founded the joint venture Livi VB with a combined initial investment of HK$2.5 billion ($318 million). JD Digits took a 36 percent stake in the venture.

Ctrip Finance, an arm of China's largest online travel agency Ctrip, teamed with Standard Chartered, PCCW and HKT to set up the joint venture SC Digital Solutions. Ctrip Finance took a stake of 9.9 percent.

ZhongAn Online P&C Insurance joined forces with Sinolink Group to establish ZhongAn Virtual Finance and took a controlling stake of 51 percent.

"For Chinese mainland internet companies that stand at the frontier of the digital revolution the world over, the introduction of virtual banks in Hong Kong offers potential development space and broad market prospects," said Zeng Gang, deputy director-general of the National Institution for Finance& Development.

"It may also become a new starting point for the overseas development of financial business and a new springboard for international expansion."

The first licensed virtual banks intend to begin operations within six to nine months, said HKMA Deputy Chief Executive Arthur Yuen on Wednesday. The process of applications from five more institutions is in the pipeline, including rumored ones such as Tencent's Tenpay, Alibaba affiliate Ant Financial, smartphone maker Xiaomi and Ping An Insurance that the market placed high hopes on.

The granting of virtual bank licences comes after BOC Hong Kong, one of the city's three currency printers, allowed existing customers to open bank accounts with its Beijing-based parent without having to visit the Chinese mainland in person, said Chan Yan Chong, adjunct professor of the department of management sciences at City University of Hong Kong.

The new service, coupled with the new licences, consolidates the leading edge of the world's second-largest economy in the payment space that would be the first battleground between banks and technology firms in the city, Chan said.

For deep-pocketed players like Tencent's WeChat Pay and Alibaba's Alipay, which have already conquered a growing number of local brick and mortar stores long dominated by cash and the ubiquitous Octopus card, it may not be a big issue for them to be granted the licences or not, Chan noted.

Share to 
0
Related Articles:
BACK TO TOP
  • Sports
  • Soccer
  • Basketball
  • Tennis
  • Formula One
  • Athletics
  • Others
  • Entertainment
  • Celebrity
  • Movie & TV
  • Music
  • Theater & Arts
  • Fashion
  • Beauty Pageant
Edition:
Link:    
About CE.cn | About the Economic Daily | Contact us
Copyright 2003-2015 China Economic Net. All right reserved
HKMA grants first licenses for virtual banking
Source:China Daily | 2019-03-30 16:50
Share to 
0