Digital Banking

First Three Digital Banking Licenses Awarded In Hong Kong

Digital banking Hong Kong

Hong Kong has issued its first digital banking licenses, in a move toward strengthening the city’s financial sector, according to reports.

The Hong Kong Monetary Authority (HKMA) gave the licenses to three outfits: the first went to Livi VB, a joint venture between the Bank of China (Hong Kong), JD Digits and Jardines. The second license went to SC Digital Solutions, a company that includes Standard Chartered, HKT, PCCW and Ctrip Financial, and the third was given to ZhongAn Virtual Finance, which includes ZhongAn Online and Sinolink.  

“The introduction of virtual banks in Hong Kong is a key pillar supporting Hong Kong’s entry into the Smart Banking Era. It is a major milestone in reinforcing Hong Kong’s position as a premier international financial [center],” said Norman Chan, chief executive of the HKMA. “I believe that virtual banks will not only help drive FinTech and innovation, but also bring about brand new customer experiences and further promote financial inclusion in Hong Kong."

Some analysts were surprised to see Chinese FinTech company Tencent and Alibaba financial company Ant Financial left out of the mix.

Hoi Tak Leung, a counsel at Ashurst in Hong Kong, said the exclusion of Tencent and Ant was unusual.

“But those are two players that, if and when they get a virtual banking licence, I am very excited about seeing what services they will provide — given their highly developed ecosystems in China.”

The HKMA said five other applicants were being considered and that more announcements would happen “sooner rather than later.”

“This is the best thing to happen to Hong Kong FinTech in many years,” said James Lloyd, the head of FinTech at EY in Hong Kong. “The combination of banks and non-banks allows for the creation for genuinely new types of products.”

The newly-licensed digital banking institutions are expected to start operating within the next nine months.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.