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ZA Bank thinks it's taking Hong Kong’s virtual banking to the next level

ZA Bank thinks it's taking Hong Kong’s virtual banking to the next level

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The Hong Kong Monetary Authority (HKMA) has granted eight virtual banking licences since March 2019 to strengthen Hong Kong’s offerings of smart banking. As Hong Kong’s first virtual bank that went fully operational in March 2020, ZA Bank has launched a series of marketing initiatives and products to take Hong Kong’s virtual banking finance to the next level. 

Virtual banks primarily deliver retail banking services through the internet or other forms of electronic channels instead of physical branches.​ 

According to the HKMA, the development of virtual banks will promote fintech and innovation in Hong Kong. Also, virtual banks can help promote financial inclusion as they normally target the retail segment, including small and medium-sized enterprises.

ZA Bank, a unit of ZhongAn Technologies International Group (the group) in China, is the first virtual bank offering banking services in Hong Kong after starting in March 2020. 

“ZA represents a reverse of the alphabetical order – going from Z to A – reminding us to always think out of the box and view things from a different perspective. It’s good to be bold, contrarian, and creative,” says Rockson Hsu, CEO of ZA Bank.

“Z and A also means ‘end-to-end’, symbolising our dedication to excellence from the front end (mobile app); mid-office (customer service and operation department); to the back end (operating system); and from product development to the service process. We are committed to the community-driven approach of making banking accessible to everyone through technology.” 

Although virtual banking is new to the city, the bank is confident in Hong Kong’s infrastructure and its people’s financial literacy. After Hong Kong and Macau, the bank has plans to expand its business to international markets. 

“Every new product has an innovation curve. Although education about virtual banking is needed, we are still satisfied with the pace of recruiting new customers,” says Calvin Ng, head of retail business at ZA Bank. 

“Trust in how we handle customers’ deposits and security control, along with their faith in our business, are crucial to our business.”

Virtual banks need to have some features that traditional banks fail to offer to capture potential customers’ attention and recruit them. ZA Bank offers every service through its dedicated app, along with a streamlined user experience. 

For example, customers can create an account on the app in just minutes by filling in the necessary information, scanning their ID cards, and conducting facial recognition. Also, the bank updates the app frequently to make it even more user-friendly. 

Ng says traditional banks may offer services through their websites, but their apps cannot provide equivalent services, which causes inconvenience to customers. 

“We hope to address customers’ pain points such as the inconvenient consumer journey, and offering smooth, yet round-the-clock services, including creating accounts and setting up time deposits,” Ng says.

In the very early stages of its business, ZA Bank offered up to 6.8% on three-month deposits of up to HK$100,000 to lure new customers. Currently, customers are being encouraged to invite their friends to open accounts to get cash rebates. 

The bank also relies on organic content to help them reach out to more potential customers. For example, influencers such as Mr. Miles have created content about the bank’s offers on its website. 

Marketing initiatives are also crucial to engaging customers. But the bank has done them in-house as it helps speed up the creation process and make the content more coherent to the brand’s image. 

“But customers’ endorsements are way more powerful. We hope to spend less on ads or marketing initiatives to offer more privileges to customers. The ‘ZA Savings Go’ with a 1% annual saving deposit rate is an example of how we benefit the customers through lower operating costs,” Ng said.

In early May, the bank’s sister company ZA Insure officially kicked off the business in collaboration with Fubon Life Insurance (Hong Kong), making it the first brand to operate a virtual bank and a virtual insurer.

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