Hong Kong embraces the emergence of virtual banks

Hong Kong embraces the emergence of virtual banks

How the successful growth of virtual banks can be important to the long-term success of Hong Kong’s banking sector

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The HKMA has announced that as part of the package of initiatives it introduced in September 2017 to bring Hong Kong into a new era of smart banking, it will facilitate the establishment of virtual banks in Hong Kong. In February, it launched a consultation on proposed revisions to the Guideline on Authorization of Virtual Banks issued in 2000.

The HKMA views the development of virtual banks as an important initiative to promote fintech and innovation in Hong Kong, and to offer a new kind of customer experience. In addition, the HKMA sees virtual banks as helping promote financial inclusion, and expects them to target the retail segment, including small and medium-sized enterprises (SMEs). To that end, the HKMA has stated in its consultation paper that it expects virtual banks not to impose any minimum account balance requirement or low-balance fees on their customers.

The document looks at how the successful growth of virtual banks can be a big factor in the long-term success of Hong Kong’s banking sector, and explains KPMG China’s ability to help by developing a viable strategy and business model, supporting throughout the virtual bank authorisation process, providing independent assessments of the key areas required by the HKMA, and designing and implementing an effective IT target operating model.

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