8 virtual banks of Hong Kong peaking citizens’ interest

By Edil Corneille

To facilitate the introduction of virtual banks, the Hong Kong Monetary Authority (HKMA) published a revised Guideline on Authorisation of Virtual Banks on May 30, 2018. These challenger banks, also called as neobanks in parts of the globe, have no physical branches and focus on the customer’s requirements of digital banking.

A virtual bank is defined as a bank which primarily delivers retail banking services through the internet or other forms of electronic channels instead of physical branches.​

The introduction of these banks in Hong Kong has been a key pillar supporting Hong Kong’s entry into the smart banking era. The HKMA believes that the development of such banks will promote FinTech and innovation in the region and offer a new kind of customer experience. These challenger banks can help promote financial inclusion as they normally target the retail segment, including the small and medium-sized enterprises (SMEs).

Airstar Bank

Airstar Bank is a jointly established entity by Xiaomi and AMTD Group. The bank was granted a banking licence by the HKMA in May 2019.

Formerly known as Insight FinTech, the virtual bank, at the end of March this year, announced the launch of a pilot trial conducted within the FinTech Supervisory Sandbox (FSS) of the HKMA.

Virtual banking services were officially launched in June to the public. Banking services encompass savings account, time deposit and personal loan products.

Ant Bank

Ant Bank, by Ant Group, was incorporated in Hong Kong in August 2018 and was previously known as Ant SME Services. The bank has also officially opened in Macau. Based on advanced internet technology, it will gradually provide efficient, convenient and safe diversified internet financial services to small and medium enterprises, entrepreneurs, and individual consumers in Macau.

The bank was granted its licence under the Banking Ordinance by HKMA in May 2019 to operate in the form of a virtual bank.

Fusion Bank

Fusion Bank is a joint venture between Tencent, Industrial and Commercial Bank of China (Asia), Hong Kong Exchanges and Clearing, Hillhouse Capital and Hong Kong entrepreneur Adrian Cheng. This neobank was granted its licence in May 2019 to facilitate financial innovation, enhanced customer experience and financial inclusion as part of HKMA’s smart banking initiatives.

livi bank

In August, livi bank opened up its virtual doors to the citizens of Hong Kong. livi bank has partnered with UnionPay International which entails the integration of the UnionPay QR Payment into the bank’s livi’s virtual banking app, which is available beginning today.

This month, Wolters Kluwer was selected by the virtual bank for the OneSumX for Regulatory Reporting solution which will manage livi’s regulatory reporting obligations.

livi bank is backed by Bank of China Hong Kong, Jingdong Digits Technology and the Jardine Matheson Group.

Mox Bank

Mox is backed by Standard Chartered (SC), in partnership with HKT, PCCW and Trip.com. In April, the bank announced its availability on an invitation basis to selected external customers, following its brand launch in March. The aim of the external pilot was to gather feedback from customers and prepare Mox for a launch to the broader public later this year.

This month, the bank officially launched in Hong Kong where the company has first invited pre-registrants who had signed up on its waitlist for services. These pre-registrants will be invited in phases to open their Mox accounts.

The virtual bank will start with its first 3,000 pre-registrants, who will receive the limited-edition metal Mox Card upon the successful opening of an account. Later, other pre-registrants will be gradually eligible for a metal Mox Card. Over 20,000 have pre-registered.

Ping An OneConnect Bank

PAOB is a wholly-owned subsidiary of OneConnect Financial Technology (OneConnect) and a member of Ping An Insurance. The bank has mentioned that it is committed to establishing a virtual banking ecosystem by optimising customer-centric services through its technology. PAOB was granted a virtual banking licence by the HKMA in May 2019. PAOB is developing diverse business segments including retail banking and SME banking.

In June, Ping An OneConnect Bank announced its pilot trial under the FinTech Supervisory Sandbox (FSS) of HKMA. The bank had invited about 200 selected small and medium enterprises (SMEs) and approximately 2,000 individual customers in Hong Kong to experience PAOB SME and retail banking services.

WeLab Bank

This bank launched in the region at the end of July this year and reported over 10k account opening applications within 10 days of its launch.

The completely digital neobank enables customers to open an account within 5 minutes with no monthly fees. Services such as time deposits, an interest-bearing deposit account with an instant virtual debit card, and real-time payments powered by Faster Payment System (FPS), among others are offered by the bank.

WeLab Bank announced this month that it selected Solace as a core component of its technology architecture to establish multi-cloud vendor communication. Using Solace PubSub+, the neobank will run its entire infrastructure on multiple clouds to ensure customer information is well protected and secured.

ZA Bank

Formerly known as ZhongAn Virtual Finance, ZA Bank obtained its virtual banking license in March 2019. It obtained the first batch of virtual banking licenses issued by the HKMA.

Its most recent partnership is with Evanston-based Accuity, a global provider of financial crime screening, payments and counterparty know your customer (KYC) solutions. The bank has implemented Accuity’s screening solution to improve customer experiences, and at the same time, meet domestic and international regulatory requirements.

This challenger bank was officially opened by the HKMA in March 2020 and is said to have become the first virtual bank in the region.