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07/05/2018

AUTHORISATION OF VIRTUAL BANKS IN HONG KONG

The Hong Kong Monetary Authority (“HKMA”) published a revised Guideline on Virtual Banks (“Revised Guideline”) on 30 May 2018 following the public consultation in early 2018. This is one of the 7 initiatives introduced by the HKMA to promote fintech and innovation development in Hong Kong. The first batch of virtual banking licences are expected to be granted by end of 2018 or in the first quarter of 2019.

Bringing Hong Kong into a New Era of Smart Banking

Embracing fintech deveopment and financial inclusion in Hong Kong

A virtual bank refers to ‘a bank which delivers retail banking services through the internet or other forms of eletronic channels instead of physical branches’. The HKMA issued the first Guideline on Virtual Banks in 2000, however, this initiative was not widely recognised until the relaunch in 2017. As of May 2018, 50 companies have expressed interest in applying for the licence.

Main principles

New principles introduced in the Revised Guideline

The main principles defined in the Guideline is similar to obtaining a conventional banking licence. Applicants are required to maintain sufficient capital of HK$3 billion.

Key Challenges

The virtual banking licence application is a tremendous exercise. We have identified the following challenges during the application process:

How can Sia Partners help?

Sia Partners delivers customised solutions to our clients, with the mixture of regulatory compliance, operational Excellence and project management capabilities. We provide the following services:

For more information, please contact Ms. Helina Lo at helina.lo@sia-partners.com or Mr. Raymond Tsui at raymond.tsui@sia-partners.com for a detailed discussion.

Copyright © 2018 Sia Partners

Any use of this material without specific permission of Sia Partners is strictly prohibited.

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