The Hong Kong Monetary Authority (HKMA) has granted four virtual banking licences under its Banking Ordinance.
Ant SME Services (Hong Kong), Infinium, Insight Fintech HK and Ping An OneConnect Company now have approvals to operate a virtual bank system. These banks will look to launch their virtual bank services within the next six to nine months.
Having supplied the licences, the HKMA will now closely monitor the operations of the virtual banks, particularly customer reactions to a digital financial services environment. Furthermore, it hopes to determine whether these virtual banks will impact the general banking sector.
The regulator is expecting to be capable of conducting this comprehensive assessment around a year after the first virtual bank has released its services.
HKMA chief executive Norman Chan said, “We are pleased to grant four more virtual banking licences today. The HKMA is now working closely with the 8 virtual bank licensees to prepare for the launch of their business operations in accordance with their plans.
“The launch of virtual banks in Hong Kong, which is a key component of the Smart Banking Initiatives, will certainly facilitate financial innovation, enhanced customer experience and financial inclusion.â€
Following these new approvals, there are 160 licenced banks operating within Hong Kong.
The HKMA has been working towards fostering improved banking environments for consumers. Last year, the body released its OPEN API framework, a similar protocol to the open banking initiative in Europe.
Through this Open API, the regulator hopes to improve competitiveness by encouraging innovation and integrated services.
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