Five virtual banks, which had already been granted operating licenses in Hong Kong, have missed their respective launch dates this year. The banks have cited the ongoing coronavirus pandemic as the main reason for the delays.
The health and economic crisis that is currently wreaking havoc across the world has delayed the banks' launch preparations and increased their reluctance to immediately begin operations. Out of the eight virtual banks that had been granted banking licenses by the Hong Kong Monetary Authority (HKMA), only one was able to hit its target launch date.
ZA Bank, a joint venture of online insurance company ZhongAn Online P&C Insurance and Sinolink Group, has already begun operating in Hong Kong. The company rolled out its services after completing a three-month trial, which had ended last month.
HKMA, which issued the licenses to further innovate Hong Kong's financial system to catch up with other global financial hubs, mentioned in a statement that the pandemic had negatively affected the banks' plans. The city's de facto central bank had initially expected the eight banks to start offering their online banking services within the year.
So far, two of the license holders, Ant Bank and Airstar Bank, have pushed ahead with their pilot programs. Ant Bank is operated by Ant Financial Services, while Airstar is a joint venture between Chinese smartphone maker Xiaomi and Hong Kong-based financial services firm AMTD. Mox Bank, a joint venture operated by Standard Chartered Bank, announced that it will be starting trails this week.
The other license holders, namely Ping An OneConnect Bank, WeLab Virtual Bank, Livi Bank, and Fusion Bank, have not yet announced any details regarding their planned launches. All of the virtual banks were granted licenses by the HKMA between March and May of last year.
Ping An Insurance, the operator of Ping An OneConnect Bank, did state that it wanted to wait until the pandemic is placed under control before it launched its virtual banking services. Ping An co-CEO, Jessica Tan Sin-yin, told reporters that their virtual banking services are already ready and have undergone all the necessary tests. However, they are still waiting for the appropriate time to launch the new business.
Executives from the various virtual banks had stated that pandemic has caused most of their employees to work from home. This apparently slowed down the testing of their systems, leading to delays. However, WeLab Bank chairman, Chan Ka-keung, claimed that the pandemic has not affected its preparations. Chan added that they are just biding their time and the company will launch its services when it is ready.
