A year after Hong Kong issued eight digital banking licences, Mox and ZA Bank have emerged as the early leaders. Together with WeLab, the three banks account for 86% of all virtual banking deposit in Hong Kong.
July 23, 2021 | Jeff Villapando- The COVID-19 pandemic has catalysed the surge of digital banking services in Hong Kong
- Mox and ZA Bank lead the competition in the digital banking industry
- Digital bank upstarts are years away from profits in Hong Kong
A growing number of customers are embracing digital platforms and services. This can be viewed as both an opportunity and a challenge for virtual banks. On the other hand, the growing awareness of digital platforms and services presents an opportunity for virtual banks – which have built their digital infrastructure from scratch – to offer bespoke products and an improved user experience to attract more customers.
There is a growing appetite for virtual banking in Hong Kong. Ninety-two percent of Hong Kong adults are aware of virtual banks, while 43% of non-virtual bank customers would consider using them. Sixty-five percent agreed that virtual banking is the future of banking.
Adoption of technological innovations was hastened across the banking sector
The pandemic has accelerated the adoption of technological innovations across the banking sector as a growing number of customers are embracing digital platforms and services. It has been observed that the global health crisis has catalysed the integration of technology with people’s way of living. A survey commissioned by Livi bank in Hong Kong late last year found that the pandemic had prompted a rise in digital adoption in consumers’ daily lives. Half of the consumers surveyed said that they shopped more online during the pandemic, with the majority (85%) saying that they were likely to continue their shopping habit post-COVID.
Traditional banks in Hong Kong have been preparing for the launch of digital banks for a few years. The pandemic has also acted as a catalyst for these banks to accelerate their digital transformation initiatives, narrowing the digital gap between traditional and digital ban...
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Keywords:Virtual Banks, Mobile Banking, Deposits, Bank Loans, Insurance, Retail Banking, Cashless, Credit Card, Digital Banking