bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

quizIds

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

paywallTypes

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Enoch Yiu

The Hong Kong Monetary Authority (HKMA) plans to replace the term “virtual bank” with “licensed digital bank” in reference to the eight branchless lenders operating in the city to remove negative connotations associated with the term in Chinese.
The de facto central bank started a one-month consultation to collect views on the name change proposal on April 30.
The term “virtual bank” will soon be consigned to history, according to Arthur Yuen Kwok-hang, deputy CEO of HKMA.
“The Chinese name of the virtual bank could be interpreted as ‘fictional’. The name has a negative impact on virtual banks,” he said, adding that the change in English will match the Chinese name.

“This is also in line with the international trend, as Europe, Malaysia and Singapore have also adopted the term digital bank.”
Livi Bank, a virtual bank backed by Bank of China (Hong Kong), supported the proposed name change plan.
“Some members of the public thought virtual banks only offer services related to virtual assets,” said David Sun, CEO of Livi Bank.
“The proposed renaming to ‘licensed digital banks’ will make it easier for the community to understand the business nature and regulation of the banks. It will also help the industry to build business partnerships in Hong Kong and the Greater Bay Area.”
Other virtual lenders, including WeLab Bank, Mox Bank, and ZA Bank, said they supported the HKMA’s proposal.


Robert Lee Wai-wang, a lawmaker representing the financial services sector, believes the name change will help the growth of the digital economy in Hong Kong.
“I support the HKMA’s proposal because the Chinese name of virtual banks has some sort of negative meaning,” Lee said. “The change will help the public to have a better understanding of the nature of these banks. Perhaps the regulators should also discuss whether they should change virtual assets to digital assets.”
The HKMA issued eight virtual bank licences in 2019 to inject innovation and competition into the industry. ZA Bank, WeLab Bank, Mox Bank, Ant Bank, Livi Bank, Ping An OneConnect Bank, Airstar Bank and Fusion Bank started operations in 2020. They are not allowed to have any physical branches and can only offer banking services online.
As these lenders were launched in the midst of the Covid-19 pandemic, they have thrived as people were forced to work from home while hundreds of traditional bank branches were forced to suspend operations. This boosted the public’s acceptance of virtual banks as they could handle their banking affairs on their smartphones or computers.
The virtual banks have garnered a combined 2.2 million customers by the end of last year, an increase of 20 per cent from a year earlier, according to HKMA data.
Deposits jumped 23 per cent year on year to HK$37 billion (US$4.7 billion), while their loans rose 19 per cent to HK$19 billion in the same period.
Revenue in the first half of last year stood at HK$530 million, almost double from a year earlier.
“These figures show the virtual banks have been growing well and the new generation of banks can compete with the traditional lenders,” Yuen said. “The emergence of these virtual banks has forced many traditional banks to improve their digital banking services.”
From a financial inclusion point of view, the virtual banks have offered more banking choices for customers, he said, adding that traditional banks have not provided comprehensive services to retail banking customers and SMEs [small and medium-sized enterprises], which the virtual banks have helped to fill.


Hong Kong to offer ‘tailored guidance’ for specialist tech firms seeking IPOs

Hong Kong’s Exchange Fund posts US$8.7 billion gain amid stock market rally

Chery gears up for US$1.5 billion Hong Kong IPO without Wall Street banks

Hong Kong stocks rise on optimism about foreign investors buying local assets

Banking & finance

Hong Kong’s monetary authority to replace ‘virtual bank’ with ‘licensed digital bank’ to boost public confidence

Online banking has grown in popularity since the Covid-19 pandemic. Photo: Shutterstock

HKMA Deputy CEO Arthur Yuen. Photo: Jonathan Wong

Hong Kong virtual lender ZA Bank eyes retail services for digital assets as new regulations come into effect in June

ZA Bank is Hong Kong’s biggest virtual bank. It is now eyeing retail related digital asset services. Photo: Bloomberg

(From left) ZA Bank’s alternate CEO Calvin Ng, CEO Ronald Iu, and alternate CEO Devon Sin at the virtual bank’s office in Hong Kong. Photo: Jonathan Wong

Only digital exchanges licensed by the SFC can serve retail investors from June 1. Photo: Shutterstock

Perfect match: Hong Kong virtual banks WeLab, Mox, ZA Bank partner with digital insurers amid government fintech push

WeLab Bank CEO Tat Lee Ka-tat, pictured at his offices in Quarry Bay on October 12, 2023. Photo: Jonathan Wong

The ZA Bank logo is seen at the bank’s offices in Hong Kong on April 11, 2023. Photo: Bloomberg

Bowtie Insurance co-founder and co- CEO Fred Ngan Yiu-fai, pictured at Bow Coffee in Wan Chai on September 25, 2023. Photo: Jonathan Wong

Hong Kong virtual lenders ZA and Mox rank in top 10 in Sia Partners’ global study of mobile banking apps

ZA Bank, Hong Kong’s largest virtual bank, ranked sixth in the 2023 Global Mobile Benchmark by French consultancy Sia Partners. Photo: Bloomberg

Stephen Walsh (left), associate manager of Sia Partners, and associate partner Jeremy Fetiveau. Photo: Enoch Yiu

HSBC’s Hong Kong retail banking app has 2 million users, and almost 98 per cent of its retail transactions are conducted through digital channels. Photo: Jelly Tse

Year of the Dragon: ZA Bank, Citigroup, HSBC, BOCHK lavish Hong Kong staff with fat lai see packets, other goodies

Lai see packets are displayed at the Eco Art Limited office in Kwun Tong, Hong Kong. Photo: Yik Yeung-man

A performing group rehearses on February 6, 2024 for the ‘Cathay International Chinese New Year Night Parade’, to be held in Tsim Sha Tsui on the first day of the Year of the Dragon. Photo: May Tse

BOCHK-backed virtual lender Livi eyes further SME business growth after strong 2023

There were 340,000 SMEs in Hong Kong at the end of last year, employing 45 per cent of the city’s private workforce. Photo: Elson Li

From left, David Sun, CEO, Jammy Chen, consultant, Gary Lam, chief technology officer, and Weiwei Wang, head of the Greater Bay Area and digital platform, of Livi Bank. Photo: Handout

Business

Banking & Finance

News

Hong Kong

Hong Kong Economy

The term ‘virtual bank’, which can mean ‘fictional’ when rendered in Chinese, will soon be consigned to history, HKMA deputy CEO Arthur Yuen says
The eight virtual banks had a combined 2.2 million customers in 2023, 20 per cent more than a year earlier, according to HKMA


The HKMA plans to replace the term ‘virtual bank’ with ‘licensed digital bank’ in reference to the city’s eight branchless lenders to remove negative connotations associated with the term in Chinese.


Fintech

Hong Kong Monetary Authority (HKMA)

Greater Bay Area

Hong Kong’s monetary authority to replace ‘virtual bank’ with ‘licensed digital bank’ to boost public confidence

The term ‘virtual bank’, which can mean ‘fictional’ when rendered in Chinese, will soon be consigned to history, HKMA deputy CEO Arthur Yuen says The eight virtual banks had a combined 2.2 million customers in 2023, 20 per cent more than a year earlier, according to HKMA

The term ‘virtual bank’, which can mean ‘fictional’ when rendered in Chinese, will soon be consigned to history, HKMA deputy CEO Arthur Yuen says

The eight virtual banks had a combined 2.2 million customers in 2023, 20 per cent more than a year earlier, according to HKMA