Only one new group clinched Hong Kong's virtual banking licenses last month, signalling the authorities' conservative approach.
Last month, the Hong Kong Monetary Authority (HKMA) awarded three virtual bank licenses, allowing licensees to offer a full range of banking services online without the need to set up any physical branches. However, there was just one new face among the licensees – a joint venture between online insurer Zhong An Online and SinoLink Group. The other two were awarded to joint ventures led by Standard Chartered and Bank of China (Hong Kong).
As a result, financial companies are urging the HKMA to be more flexible when dishing out virtual banking licenses or they would divert resources elsewhere.
More Flexibility Please
There are still five candidates in the final shortlist, but many others, such as Tencent-backed Airwallex and Interactive Brokers have been told that they did not make the list.
«Since the HKMA said they won’t consider new offerings of virtual bank licence for a year after the current ones are operating, we may consider opportunities in other markets before we will look again at Hong Kong,» said David Friedland, managing director for Asia-Pacific at Interactive Brokers, who was quoted in «South China Morning Post».
Deemed Too Restrictive
Airwallex, an Australian fintech, had moved its headquarters from Melbourne to Hong Kong last year after the HKMA announced plans to issue virtual banking licences to promote fintech.
«We are disappointed with the HKMA’s decision. The HKMA’s licence requirements are too restrictive which could affect our ability to offer new banking products and services,» said Jack Zhang, co-founder and chief executive of Airwallex. If HKMA’s licensing regime remains inflexible, they might move core operations to other markets which are more friendly to new start-ups, he added.
