Virtual Banks? A key to banking disruption in Hong Kong

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Regulatory Initiatives鈥

Hong Kong refers to neobanks as Virtual banks. The regulatory rules for virtual banks in Hong Kong are the same as the traditional banks. The Hong Kong Monetary Authority (HKMA) did so to ensure a level playing field between the traditional and the virtual banks. Some of these important regulatory procedures are:

  1. A minimum paid-up capital requirement of HK$300 million for virtual bank applicants
  2. The priority of being granted a virtual banking license would be given banks which can demonstrate:
    1. Have sufficient financial, technology, and other relevant resources to operate a virtual bank
    2. A credible and viable business plan that would provide a new customer experience
    3. Developed or can develop an appropriate IT platform to support their business plan
    4. Ready to commence operation soon after a license is granted
  3. Deposits are protected up to a limit of HK$500,000 per depositor
  4. The HKMA considers it prudent to require virtual bank applicants to develop an exit plan. The purpose of an exit plan is to ensure that, a virtual bank can unwind its business operations in an orderly manner without disrupting the customers and the financial system

Snapshot of Hong Kong鈥檚 virtual banks

Table 1: Profile for Hong Kong鈥檚 virtual banks鈥
Name Founding Year CEO Annual Revenue
ZA 2015Shim Sung-Hoon Undisclosed amount
Airstar2016Alex Ryu Undisclosed amount
WeLab2013Adrian TseUndisclosed amount
Livi2019Michael WangUndisclosed amount
Ant* N/AWang LanUndisclosed amount
Fusion N/AEric SumUndisclosed amount
Mox2019Deniz G眉venUndisclosed amount
Ping An OneConnect (PAOB) 2018Ryan FungUndisclosed amount
Source: Twimbit analysis
*Due to insufficient information, we would not be commenting on the 5 building blocks for Ant bank
Note: The annual revenue is an undisclosed amount as the banks are privately held
Table 2: Learning list of Hong Kong鈥檚 virtual banks funding capital
Total funds raisedUS $581 Million
Seed Round(Jan 2013)
Series AUS $20 Million (Jan 2015)
Funding Round(Dec 2015)
Series BUS $160 Million (Jan 2016)
Debt FinancingUS $25 Million (Sept 2016)
Venture Round(Oct 2017)
Series BUS $220 Million (Nov 2017)
Series CUS $156 Million (Dec 2019)

In-depth virtual bank analysis鈥痮n the 5-building block framework鈥

Customer Centricity

  • 100% of the virtual banks in Hong Kong showcase a mobile-first approach
  • 63% of the virtual banks offer multi-currency transactions to its customers
  • Only Mox offers hyper-personalization, budget analytics, and save and spend goal setting
Figure 1: Hong Kong鈥檚 virtual banks showcase limited customer centricity

Note: The de-highlighted customer-centricity parameters indicate these are not prevalent in any of the neobanks

Customer Reach

  • 14% of the virtual banks in Hong Kong cater to small businesses
  • 86% of the virtual banks in Hong Kong cater to the Gen Z and Millenial population
Figure 2: Representation of each virtual banks鈥 customer reach

Product Stack

  • Mox is the only virtual bank in Hong Kong to offer Google Pay services
  • WeLab and Mox are the only virtual banks in Hong Kong that offer credit and debit cards
  • ZA is the only virtual bank that extends mortgage loans to its customers
  • 43% of the virtual banks offer the in-app virtual card feature


Each virtual bank product stack is a representation of 4 key parameters across 9 product types:

  1. Unavailable: Does not have a product type in their stack
  2. Testing: The product is currently in the pilot-testing phase, not live to all customers
  3. Established: The product is a part of their stack and fully available for customers
  4. Unique: A unique offering within a product type which is exclusively provided by the virtual banks
Figure 3: Representation of each virtual bank鈥檚 product stack

Partnership Ecosystem

  • Mox became the first bank in Hong Kong to partner with Apple Pay and Google Pay
  • All the virtual banks in Hong Kong offer real-time payments through the payment financial infrastructure created by HKMA called FPS
Figure 4: Representation of each virtual banks鈥 partnership ecosystem

Open Banking

The Hong Kong Monetary Authority (HKMA) in July 2018 published a four-phase approach to implement Open Banking:

  1. Phase 1: 鈥渞ead-only鈥 product
  2. Phase 2: new applications and customer acquisition
  3. Phase 3: account information
  4. Phase 4: transaction processing
Table 3: API Developers for Hong Kong鈥檚 virtual banks
Name of the bank Developer
ZA Fiserv, Inc.

Fiserv, Inc. is the API developer for ZA bank:

  • It is a global leader in Fintech and payments enabling innovative financial services experiences that are in step with the way people live and work today
  • Finserv serves clients in more than 100 countries

Hong Kong鈥檚鈥痸irtual banks鈥欌痮utlook鈥

  • The Hong Kong Monetary Authority received around 29 applications for granting virtual banking licenses out of which just 8 got approved. Due to HKMA鈥檚 strictness, Hong Kong is losing out on an ultra-competitive marketplace of virtual banks. However, they are willing to trade it off for a more robust and secure system.
  • A recent survey by the Hong Kong Institute of Chartered Secretaries found that 76% of members said bank account-opening procedures were getting more difficult, Virtual banks came in and reduced that time drastically.
  • The list of requirements to fill for virtual banks are too long. For a virtual bank to start, having at least HK$300 million is a lot.


Table 4: List of investors in Hong Kongs鈥 virtual banks
Name of the bank Investor
ZA ZhongAn Online P&C Insurance, Sinolink Group
Airstar Xiaomi, AMTD Group
WeLab WeLab
Livi, Bank of China, Hong Kong
Ant Ant Financial
Fusion Tencent, the Industrial and Commercial Bank of China
Mox Standard Chartered, HKT, PCCW and
PAOB Ping An Insurance
Note: The list is not exhaustive and is based on the publicly available data

We have sourced information pertaining to the funding value, round, customer base, revenue, and product information from Crunchbase, Owler, respective company鈥檚 annual reports, and their websites.

Aman Jindal, Business Research Analyst Intern, contributed to this research by assisting in writing, conducting preliminary analysis, and conceptualising the topic.


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