On 27 March 2019, the Hong Kong Monetary Authority (HKMA) granted its first virtual banking licences. Announced by HKMA as one of seven measures to launch Hong Kong into a "new era of smart banking", as the city catches up with mainland China and Japan as the Asia leaders in this area, a total of eight licences have been granted (with more unlikely until 2020). The licensees are predominantly major institutions, or backed by them (Bank of China, Standard Chartered, Ping An, Ant Financial, Ten Cent and Xiaomi being examples). The exception is WeLab, which is Hong Kong's first home-grown FinTech licensee.
The HKMA requirement is that these will operate purely digital banks, offering all bank transactions and services digitally only. Many applicants found the licence conditions too restrictive and it remains to be seen if this group of virtual banks can actually increase competition and efficiency. They have the coming year to test systems, with launches expected in six to nine months.
Licensees are restricted from tapping into their backers' existing user bases without positive customer consent , so will have to find new users. Equally, they cannot use their existing physical outlets as branches – such as supermarkets Wellcome or 7Eleven.