Hong Kong’s First Virtual Bank Launches
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Hong Kong’s banking history enters a new chapter with the launch of its first virtual lender, ZA Bank.
ZA Bank, co-owned by ZhongAn Online P&C Insurance and Sinolink Group, launched yesterday to become the first virtual bank to kickstart services in Hong Kong. According to its chief executive Rockson Hsu, the name «ZA» represents a reversal of alphabetical order which is a reminder to «think out of the box and view things from a different perspective».
It’s good to be bold, contrarian and creative, Hsu added in a statement.
‘Z’ and ‘A’ also means ‘end-to-end’, it symbolizes our mission to redefine customer journey through technology, from the front-end (mobile app/branch), mid-office (customer service/operation department) to the back-end (operating system), from product development to service process.
ZA Bank said it would offer interest rates of 1.4 percent for one-month Hong Kong dollar deposits and up to 2 percent for three, six and 12-month deposits.
Whilst this lags behind traditional lenders in Hong Kong which offer up to 2.2 percent on 12-month deposits, ZA Bank’s minimum size of $1 falls very much well below traditional minimum deposit sizes of HK$10,000. ZA also provides time deposits for U.S. dollars and yuan.
ZA Bank will initially only roll-out services such as remote account opening, multi-currency savings account, time deposits, local transfers and e-statement services only to a select handful of 2,000 users which include friends and relatives of its staff.
The launch falls under the HKMA’s sandbox mechanism and once the pilot is deemed successful, services will be made accessible by the general public.
We are delighted to note that the first virtual bank has started its trial run today in the HKMA’s Fintech Supervisory Sandbox, thanks to the diligent efforts of various parties, said Arthur Yuen, Hong Kong Monetary Authority’s deputy chief executive, in a separate statement.
We believe that as virtual banks gain a better understanding of their customers’ preferences and habits over time, they will leverage financial technologies to offer more personalized products and services, and new user experience to customers.
Seven other virtual banks in Hong Kong are expected to launch in the first half of next year.
Questions & Answers
Q.What is ZA Bank's unique selling proposition compared to traditional Hong Kong lenders?
What is ZA Bank's unique selling proposition compared to traditional Hong Kong lenders?
ZA Bank offers a significantly lower minimum deposit size of $1, in contrast to traditional banks which require HK$10,000. This makes it accessible to a broader range of potential customers despite slightly lower interest rates on longer-term deposits.
Q.When will the general public be able to use ZA Bank's services?
When will the general public be able to use ZA Bank's services?
The general public will gain access to ZA Bank's services after the current pilot program is deemed successful. The bank is currently operating under the HKMA's sandbox mechanism with a select 2,000 users.
Q.What specific services does ZA Bank offer to its initial users?
What specific services does ZA Bank offer to its initial users?
Initially, ZA Bank provides remote account opening, multi-currency savings accounts, time deposits, local transfers, and e-statement services. These are currently available to a select group of 2,000 users.
Q.How many other virtual banks are expected to launch in Hong Kong soon?
How many other virtual banks are expected to launch in Hong Kong soon?
Seven other virtual banks are anticipated to commence operations in Hong Kong during the first half of next year. This indicates a growing trend in the region's financial sector.
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