Hong Kong Kicks Off Virtual Banking as ZA Launches Pilot Program
Hong Kong Kicks Off Virtual Banking as ZA Launches Pilot Program
(Bloomberg) -- ZA Bank Ltd. began a pilot for Hong Kong’s first virtual bank, kicking off a shake-up that may collar as much as 30% of banking revenue in the city.
The wholly owned unit of ZhongAn Technologies International Group Ltd. is targeting about 2,000 retail users initially to gather feedback before an official start, according to an emailed statement Wednesday.
ZA was part of the first group of companies granted a license to operate a virtual bank in March this year by the Hong Kong Monetary Authority. The city is seeking to catch up with economic rivals in mainland China and India by allowing fintech to take on retail banking.
Virtual banks mimic traditional ones in that they will accept deposits and give out loans, but aren’t expected to set up physical branches. ZA said on Wednesday it will provide users with a “full suite of services 24/7,” allowing customers to open an account in five minutes by using a Hong Kong identity card.
HSBC Holdings Plc, Standard Chartered Plc, Hang Seng Bank Ltd. and BOC Hong Kong Holdings Ltd. account for about two-thirds of the retail loan market and around 77% of mortgages, Goldman Sachs Group Inc. has estimated.
About $15 billion, or 30% of the city’s total banking revenue, is up for grabs, analysts led by Gurpreet Singh Sahi said in September last year.
To contact the reporter on this story: Jonas Bergman in Hong Kong at jbergman@bloomberg.net
To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Katrina Nicholas
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