Wed, Sep 18, 2019 - Page 10 News List

HK online banks launch delayed

NOT A PRIORITY:Aimed at the young, it would be difficult to launch the banks while prospective customers are more interested in protesting, an executive said

Reuters, HONG KONG

The launch of new online-only banks in Hong Kong is expected to be delayed in part due to protests in the territory, people with direct knowledge of the matter said.

Most of the eight newly licensed digital banks in Hong Kong, including joint ventures involving Standard Chartered PLC and Bank of China (Hong Kong) Ltd (中國銀行香港), had aimed to begin operating before the end of this year, but as the protests stretch into a fourth month, the new banks, seen triggering the biggest shake-up in Hong Kong’s retail banking sector for years, are now to launch early next year, the people said.

A delay would be the latest sign of the damage being wrought on the Asian financial hub’s economy due to the political turmoil that erupted in June.

Some of the so-called virtual banks had aimed to launch brand promotion campaigns as early as this month, but the plans have now been put off, the people said on condition of anonymity given the sensitivity of the matter.

“This form of banking service is mainly aimed at the youth, millennials, and many of them are out on the street these days joining the protests,” a senior executive at a license winner said.

“It will be difficult to launch a brand campaign around them and attract their interest when their priority is clearly not having another bank account,” said the executive, who declined to be named as he was not authorized to talk to the media.

Hong Kong awarded virtual banking licenses to three groups in March — joint ventures led by Standard Chartered and Bank of China (Hong Kong), as well as a subsidiary of the international arm of Chinese online insurer ZhongAn Online P&C Insurance Co Ltd (眾安保險).

The banks intended to launch services in six to nine months, the Hong Kong Monetary Authority said at the time.

Five more licenses were issued later to joint ventures led by smartphone maker Xiaomi Corp (小米) and Tencent Holdings Ltd (騰訊), and a unit of Ant Financial Services Group (螞蟻金服), among others.

The regulator said starting six to nine months after authorization was “not a rigid requirement,” but that services were expected to be rolled out to the public in the fourth quarter at the earliest.

Standard Chartered said that its virtual bank joint venture was working toward a launch early next year. Livi VB Ltd, the virtual banking joint venture led by Bank of China (Hong Kong), said it was working toward a launch in the near future. ZhongAn declined to comment.

A spokeswoman for the Xiaomi-led joint venture said the virtual banking business was in the preparation stage, while Ant Financial said that work for its bank was progressing smoothly. Tencent led-Fusion bank did not respond to a request for comment.

A couple of the license winners could still “soft launch” this year, restricting services to staff and their families ahead of a full launch, the people said.

The virtual banks plan to offer savings accounts, credit cards, personal loans and travel insurance, and will try to take market share from HSBC Holdings PLC, Standard Chartered and some Chinese lenders who currently dominate retail banking in Hong Kong.

The launch delay is also partly due to the time required to build technology infrastructure, compliance and customer acquisition processes, and to hire staff, the people said.

“This is about building a new bank from ground zero, with regulatory standards that are similar to traditional banks,” one person said.

This story has been viewed 1735 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top