HONG KONG (Reuters) – At least a dozen banks, fintechs and telecom firms are lining up to get a piece of Hong Kong’s retail and small business banking market as the regulator prepares to award the former British colony’s first online-only banking licences.
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Bidders hoping to challenge the dominance of HSBC and its local rivals, Bank of China (Hong Kong) and Standard Chartered, include China’s Ant Financial, Tencent, and Ping An Insurance, several people familiar with the process said.
StanChart has announced it will be applying, as have the Hong Kong telecoms operator HKT Trust and HKT, and fintech companies like WeLab Holdings and TNG Wallet.
The deadline for the first batch of applications is Friday, and others expected to apply include Bank of China (Hong Kong), Chinese smartphone maker Xiaomi and online insurer ZhongAn, said the people and local media reports.
On offer is access to a rich banking market where many consumers are unhappy with their current options, according to research last year from Accenture. The research showed that only 53 percent of consumers in Hong Kong are satisfied with their banks, compared to 88 percent in the United States, and 72 percent in Australia.
Small firms, who have long complained about the difficulties of opening bank accounts in Hong Kong, will be one target of the new online lenders, with small loans, foreign exchange and payment services among those on offer, the people said.
The potential prize is enormous. HSBC alone made profits of $1.4 billion from its Hong Kong retail banking and wealth management operations in the second quarter, accounting for 80 percent of its global retail banking revenue.
HSBC is not expected to apply for a separate digital banking license in Hong Kong, as the bank is focussing on bolstering its core services using digital technology, two of the people said.