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Hong Kong’s newly licensed virtual banks will look to delay their launches due to an ongoing coronavirus pandemic.
Since the Hong Kong Monetary Authority issued eight virtual bank licenses last year and earmarked February this year for the final launches, the city has been victim to over 1,000 cases of coronavirus infections and four deaths.
With the exception of ZA Bank – jointly owned by mainland online insurer ZhongAn Online P&C Insurance and property developer Sinolink Group – no licensed digital lenders have fully kicked off for business.
Of the seven remaining virtual banks, three have made soft launches for trials – Ant Bank, Airstar Bank – jointly owned by mobile maker Xiaomi and Hong Kong-headquartered financial services group AMTD – and Mox.
The remaining four – WeLab Virtual Bank, Ping An OneConnect Bank, Tencent-backed Fusion Bank and Bank of China (Hong Kong)-backed Livi Bank – have yet to announce any launch dates, according to a report citing the pandemic as the cause for delay.
The outbreak of Covid-19 has inevitably affected the virtual banks’ preparation for the launch of the business, according to a statement from the HKMA.
Hong Kong is not alone in delaying digital banking launches in a region where various financial hubs have been vying to enhance their capabilities in the space including, most notably, rival Singapore. The city-state had originally planned to unveil up to five license winners from the reported 21 applicants in June 2020.
The delayed license issuance will allow applicants to] focus resources on ensuring monetary and financial stability and ensuring that financial institutions remain resilient, and able to perform their role in supporting businesses and individuals through this challenging time, the MAS said, adding it could resume the process in the second half of the year.
