Standard Chartered applies to operate a virtual bank in Hong Kong

Standard Chartered announced it will apply to set up a virtual bank in Hong Kong, making it the first traditional bank seeking a licence locally to operate purely online without physical branches.In response to the challenges of fintech innovation, the bank is seeking to take advantage of the Hong Kong Monetary Authority (HKMA)’s latest rules on granting virtual bank licences for both traditional and non-banks in the territory. The move is an attempt to boost their digital presence in order to attract more young customers.“Technology is at the heart of our bank’s strategy and we have embarked on a journey to take a step beyond and go truly digital,” said Samir Subberwal, regional head of retail banking in Greater China and North Asia at Standard Chartered.Standard Chartered has set up a task force to study the details of the revised guidelines on the authorization of virtual banks as set out by HKMA.Mary Huen, chief executive of Standard Chartered Hong Kong office said “We are supporting a new era in smart banking that will help clients better understand their financial position and how to achieve their financial goals. We are developing our virtual bank with innovation and client needs in mind, so that their banking experiences cater to their digital lives.”The bank invested US$400 million in its digital banking operations globally in 2017. It is expected to pour more money into developing fintech services this year. HKMA deputy chief executive Arthur Yuen said about 50 companies had expressed interest in applying for the virtual bank licence. HKMA set August 31 as the deadline for the first batch of applicants. It is expected to start granting licences at the end of this year or in the first quarter of next year.