Hong Kong Issues More Online Banking Licenses

Hong Kong Issues More Online Banking Licenses

The banking regulator in Hong Kong has issued an additional four online-only banking licenses to Ping An, Alibaba, mobile phone maker Xiaomi and a joint venture (JV) consisting of Tencent, ICBC and Hillhouse Capital.

Reuters is reporting that this totals eight total licenses handed out by the government.

The Hong Kong Monetary Authority, which handed out the licenses, expects the banks to launch in about six to nine months. The new ventures would be closely regulated, with special attention given to customer reactions and the response of the banking industry.

Online-only banking has a lot of potential to alter the banking landscape in Hong Kong, which has traditionally been the domain of legacy banks like HSBC, Standard Chartered and a number of Chinese banks.

“Eight new ambitious and well-capitalized ‘challenger’ banks coming to market in or around the same time have the potential to inflict considerable damage on incumbent players, as well as on each other,” said James Lloyd, EY’s Asia Pacific FinTech leader. “Expect fireworks.”

The four companies with licenses are Ping An OneConnect Company Limited, Insight Fintech HK Limited, Ant SME Services (Hong Kong) Limited and Infinium Limited. Insight Fintech is a JV with Xiaomi and investment bank AMTD Group. Xiaomi has a 90 percent stake. Infinium Limited is a JV between Tencent and Chinese banking giant ICBC, among others.

“Our virtual bank will enable every user to enjoy the pleasure of using FinTech,” said Hong Feng, Xiaomi’s co-founder and senior vice president.

“Opening up critical banking services to retail consumers and SMEs will fundamentally change the way that businesses in Hong Kong operate,” said Jie Liu, a partner at Hillhouse Capital.

Ant SME Services is an outfit under Alibaba affiliate Ant Financial, and Ping An OneConnect falls under the umbrella of Chinese insurance company Ping An.



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.