June 11, 2018 / 10:48 AM / 2 months ago

StanChart to apply for virtual banking license in Hong Kong

HONG KONG (Reuters) - Standard Chartered plans to apply for “virtual banking” license in Hong Kong, the emerging market-focussed lender said on Monday, amid a rush by global banks to boost their digital presence to attract more young customers.

FILE PHOTO: A woman walks down the stairs of the Standard Chartered headquarters in Hong Kong. REUTERS/Bobby Yip/File Photo

The Hong Kong Monetary Authority (HKMA), the central bank in the Asian financial hub, is expected to start granting licenses to virtual banking platforms toward the end of this year or in the first quarter of next year, it said last month.

The virtual banking platforms will have no physical branches and are expected to mainly offer retail banking services.

StanChart, which makes a bulk of its income in Asia, said the bank had set up a task-force to study details of HKMA’s revised guidelines on the authorization of virtual banks in the former British colony.

Like peers around the world, banks in Asia, mainly in major hubs including Hong Kong and Singapore, have been boosting investments on internet and mobile banking services in the battle to lure tech-savvy students and young professionals.

HSBC will invest $15 billion-$17 billion in the next three years in areas including technology and its core Asian markets of Hong Kong and China, its CEO John Flint said on Monday.

Ever since the HKMA announced its intention to encourage virtual banking in Hong Kong last September, it has received enquiries and indications of interests from over 50 companies, the central bank said last month.

“People do not want another account with a different brand, they want their financial lives simplified,” said Samir Subberwal, head - Retail Banking for Greater China and North Asia, Standard Chartered.

“That is why we believe that the launch of a virtual bank will give clients the choice of going completely digital for their everyday-banking needs.”

Reporting by Sumeet Chatterjee, Editing by Sherry Jacob-Phillips

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