Working with young generations is the key to virtual banking success, says Ken Lo of ZhongAn International
Before his appearance at Cloud Expo Asia Hong Kong, a founding member of ZhongAn subsidiary, said in May that the new virtual bank will sit down and listen to users to start a bank for them.
The digital insurer ZhongAn Online could launch its first virtual banking services in Hong Kong in just six months, said Ken Lo, founding member of ZhongAn International.
ZhongAn, which applied through its international subsidiary, received a virtual banking license from the city’s financial regulator in March. It was one of eight major regional players to receive one of the new licenses, out of a total of 29 rumors that are said to have applied. The bank will operate under the name ZhongAn Virtual Finance.
Virtual banks such as Monzo and Starling in the UK offer the same services as traditional banks with no physical branches and are estimated to account for up to 30 percent of the revenues of traditional lenders in Hong Kong.
Compared to other countries, the city has been slow to incorporate virtual banks into its traditional banking sector. For comparison: Monzo received a banking license in April 2017, while Hong Kong only started granting equivalent licenses to online banks in March of this year.
Many of the city’s financial veterans, including Standard Chartered Bank, wasted no time starting virtual banking companies when HKMA signaled it would ease regulations while other regional companies and fintechs like China-based ZhongAn took the opportunity to to diversify and diversify and expand beyond home markets.
Speaking to Techerati, Lo said the new licenses usher in a new era of financial innovation in the city:
“Virtual banking will bring something different to the Hong Kong market, not just a more digital way for users to connect to banks, but better service and demand for banks,” he said.
“It is never easy to start a financial revolution project, especially in a mature market like Hong Kong. Although virtual banks, challenger banks, and the like sprang up in other countries many years ago, each market is different from one another. “
Collaboration is key
ZhongAn Online, an idea by Ping An, Tencent and Alibaba, describes itself as China’s “first truly digital insurer” and has taken the country by storm since it was launched in 2013. In its first year of operation, 630 million insurance policies were taken out and 150 million customers were serviced.