ZA Bank, a company backed by Chinese insurer ZhongAn Online P&C Insurance and Sinolink Group, became Hong Kong's first virtual bank to offer its services to customers on Wednesday. The rollout is still in its prototype stage and the company is only allowing around 2,000 selected users to try out its virtual banking services.
The offering of its virtual banking services comes just weeks after the company received regulatory approval from the Hong Kong Monetary Authority. The 2,000 users it has started to service are mostly friends and relatives of the company's staff. However, the company does intend to offer its sthe ervices to the general public in the coming weeks.
Some of the services it is offering to its select users including remote account openings, time deposits, local transfers, e-statements, and multicurrency savings accounts. According to ZA Bank, users can open their account on the company's platform in just five minutes using only their government-issued identity cards.
The bank is also offering services aimed at harnessing payroll accounts and enticing Hong Kong residents in transferring their money from traditional banks to its platform. The company's one-month Hong Kong time deposit service is offering an interest rate of 1.4 percent. The interest rate increases incrementally to 2 percent and higher for its three, six, and 12-month tenors.
The rates are slightly lower than what major transitional banks in Hong Kong are offering. HSBC currently offers interest rates of up to 2.55 percent for its time deposit accounts. However, the main advantage that ZA Bank offers is flexibility as it does allow its customers to open time deposit accounts for as little as HK$1. In contrast, HSBC's time deposit accounts require a minimum of HK$10,000.
ZA Bank is also giving customers the ability to open time deposit accounts in different currencies, including US dollar and yuan. These accounts have interest rates ranging from 1.6 percent to 2.2 percent.
ZA Bank chief executive, Rockson Hsu, mentioned in a prepared statement that the company is offering a type of service that was built around thinking outside of the box. Hsu stated that its move was indeed bold and creative, but it is meant to redefine the customer's financial experience through technology.
The launch of the company's services in Hong Kong, albeit at a limited capacity, for now, marks the beginning of a transition to a new era for the city's banking industry. Other countries such as Europe, Japan, and the United States have already begun adopting the technology, and Hong Kong remained to be an outlier until now.
