Hong Kong’s internet banking pioneer says it will stay above the fray in city’s rush to embrace virtual banking
- The eight new licences are the largest number of new comers in a single year, and increase the local incorporate banks by one-third
- Citi decided not to apply virtual bank licence but have developed many popular digital bank services
Citigroup, which pioneered internet banking in 1998 in Hong Kong, said its Citibank retail banking unit will remain above the fray in the financial services industry’s rush to get virtual banking licenses in the city.
“We can offer all types of online banking services that a virtual bank can offer,” said Angel Ng Yin-yee, Citi’s Hong Kong and Macau chief executive, in an interview with South China Morning Post. “Plus, Citi can offer services at our branches that virtual banks cannot.”
The contrarian stance by the largest foreign lender in Hong Kong, employing 4,500 staff in the city, follows the announcement this week by the Hong Kong Monetary Authority (HKMA), which issued its second batch of four virtual banking licenses to ventures backed by a trio of China’s largest technology companies, and a unit of one of the biggest Chinese insurers.
The new licenses were awarded to Ping An Insurance’s subsidiary Ping An OneConnect, Ant Financial Services’ unit Ant SME Services, a Xiaomi-AMTD Group venture called Insight Fintech, and the Infinium consortium that includes Tencent Holdings, ICBC (Asia), and Hong Kong Exchanges and Clearing Limited (HKEX).
The first batch of licenses were issued in March and April to WeLab, and three ventures by Standard Chartered Bank, Bank of China (Hong Kong) and China’s first online insurer ZhongAn Online P&C Insurance. These permits restrict the licensees to operate their businesses purely online without physical branches.