In another example of the growing appeal of virtual banking in Hong Kong, six licensed virtual banks in the city have joined the Hong Kong Institute of Bankers (HKIB).
Virtual Banks Join HKIB
In a press statement issued by HKIB on Thursday (January 2, 2020), Hong Kong’s banking training and certification institute announced the addition of six new members to its ranks. The six newly included members are among the city’s freshly minted virtual banks.
With the latest addition, the HKIB now boasts more than 100 corporate members as well as over 6,000 individual members. The six virtual banks include WeLab Bank Limited, Fusion Bank Limited, and Bank of China-backed Livi VB.
Commenting on the decision to add these virtual banks, HKIB CEO Carrie Leung remarked:
The HKIB is thrilled to welcome six of the city’s virtual banks as Corporate Members. Launching virtual banks has marked a new era in the development of Hong Kong’s banking sector and underlines that professional training must advance to keep pace.
The addition of virtual banks to the HKIB might also signal the Institute’s intent to include virtual banking in its fintech drive for 2020. According to the press statement, the HKIB says it has been providing detailed refresher courses and seminars in cybersecurity, digital banking, and several other fintech-related areas.
In 2019, the Hong Kong Monetary Authority began to award licenses to virtual banks. The move was part of a larger pivot towards encouraging more participation in non-mainstream finance.
This trend also saw authorities looking towards the crypto market. As previously reported by Bitcoinist, regulators in Hong Kong are working towards creating clear cut laws for cryptocurrency exchanges.
Tensions in Hong Kong May Affect Virtual Banking Take Off
Several protests disrupted Hong Kong’s political scene in 2019 with anti-Chinese sentiments seemingly popular among the city’s population. With several of the already licensed virtual banks boasting strong ties to actors in mainland China, it remains to be seen whether these projects will achieve success within the city.
Virtual banking is seen by some commentators as a way of solving problems for both the underbanked and the overbanked. Customers in emerging markets can rely on mobile banking services to gain greater financial inclusion. For people in more developed markets, virtual banking also offers a way to reduce the cost of banking.
As detailed by Financial Times back in late 2019, an average customer account can cost between $3 to $15 to operate whereas WeBank — a Tencent-backed virtual bank, offers customer accounts for as low as $0.50.
Will Hong Kong’s virtual banking industry take off in 2020? Let us know in the comments below.
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