New Chinese lender Ping An OneConnect, along with HSBC, are both working to help ease small- to medium-sized businesses (SMBs) into new virtual, more efficient bank accounts, a report from Yahoo Finance says.
The idea is a response to the surge in new virtual lenders with no physical locations, now a source of conflict for the city’s banking sector. The Hong Kong Monetary Authority (HKMA) issued eight virtual banking licenses last year as a way to jump-start competition.
Now, Ping An OneConnect wants to simplify the process to open an account for SMBs and shorten the loan process, which Yahoo Finance says suggests that HKMA succeeded in bringing more competition to the banking sector. Peter Shiu Ka-fai, a lawmaker for the wholesale and retail sector, said efforts like this could help SMEs save time and money.
The economy in Hong Kong has suffered after several recent problems in addition to the pandemic — the trade war between the U.S. and China and anti-government protests have not helped either, all of it ending up with the gross domestic product shrinking 8.9 percent in the first quarter.
Ping An OneConnect has partnered with government-backed eCommerce services provider Tradelink Electronic Commerce to provide credit assessments. Ping An OneConnect is able to access its database and see if an SMB has better sales than its peers, and also access all information about a company easily via electronic records.
Ping An OneConnect said it would approve loans in five business days for up to HK$2 million (US$258,050), promising to pay HK$1,000 if it misses that deadline.
Meanwhile, HSBC says its own remote account opening service can give “quick and easy” access to banking services. HSBC did not open a virtual banking license, according to Yahoo Finance. The bank, which has operated in Hong Kong for 155 years, has begun allowing businesses to open accounts without any face-to-face meetings or submissions of physical documents.