Hong Kong issues digital banking licenses

Reported by: |Updated: April 1, 2019

Hong Kong issued its first batch of digital banking licenses. The licensees include traditional financial institutions and Chinese companies. The Hong Kong Monetary Authority issued licenses to 3 companies – Livi VB, a joint venture between Bank of China (Hong Kong), JD Digits and Jardines; SC Digital Solutions, which includes Standard Chartered, HKT, PCCW and Ctrip Financial; and ZhongAn Virtual Finance, which includes ZhongAn Online and Sinolink. These companies intend to begin operating within 9 months. Notably, Chinese technology companies Tencent and Alibaba’s Ant Financial were left out of the first round of approvals.  HKMA, which called the licenses a ‘milestone’ for the city, said 5 more applications are still under consideration and further announcements would come sooner rather than later. There are high hopes for digital banks in Hong Kong, where traditional incumbents dominate the market, but customer satisfaction is among the lowest for a developed economy.