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The Hong Kong Monetary Authority (HKMA) is reviewing renaming the term“ Licensed Virtual Banks” to “Licensed Digital Banks” to increase public confidence in virtual banks.  The HKMA has issued a 1-month consultation on the proposed name change.  The current 8 virtual banks are ZA Bank, Airstar Bank, WeLab Bank, Livi Bank, Mox Bank, Ant Bank, PingAn OneConnect Bank & Fusion Bank. Read - https://lnkd.in/ghqmghkC follow Caproasia | Driving the future of Asia The Hong Kong Monetary Authority (HKMA) is reviewing renaming the term“Licensed Virtual Banks” to “Licensed Digital Banks” to increase public confidence in virtual banks.  The HKMA has issued a 1-month consultation on the proposed name change.  The current 8 virtual banks are ZA Bank, Airstar Bank, WeLab Bank, Livi Bank, Mox Bank, Ant Bank, PingAn OneConnect Bank & Fusion Bank.  HKMA – Virtual bank is defined as a bank which primarily delivers retail banking services through the internet or other forms of electronic channels instead of physical branches.  The introduction of virtual banks in Hong Kong is a key pillar supporting Hong Kong’s entry into the Smart Banking Era. The HKMA believes that the development of virtual banks will promote fintech and innovation in Hong Kong and offer a new kind of customer experience. In addition, virtual banks can help promote financial inclusion as they normally target the retail segment, including the small and medium-sized enterprises (SMEs). WeLab Bank Airstar Bank livi bank Mox Bank Ant Bank (Hong Kong) PingAn OneConnect Credit Reference Services Agency (HK) Limited Fusion Bank Hong Kong Monetary Authority (HKMA)

Save the Bank: Centralized Digital Bank — Centralization and Digitalization as Strategic Imperatives This thesis explores the transformation of traditional banks into centralized digital banking systems as a strategic response to the burgeoning challenges posed by decentralized finance (DeFi) technologies such as blockchain and cryptocurrencies. As these technologies disrupt traditional financial paradigms, offering more direct, efficient, and transparent financial services, traditional banks face increasing pressure to adapt and evolve. This work argues for the necessity and feasibility of centralized digital banking as a comprehensive countermeasure to DeFi. Through a detailed examination of current banking challenges, including inefficiencies in customer service, transaction processing, and compliance, the thesis proposes a model of banking that leverages centralization and digitalization to address these issues. The proposed model not only enhances operational efficiency and customer engagement but also fortifies the banks’ competitive edge in a digital economy. Furthermore, the thesis discusses the long-term implications of such transformations, predicting that centralized digital banks will not only coexist with DeFi platforms but may also lead the financial services industry by adopting innovative technologies that drive customer satisfaction and operational excellence. Recommendations are provided for both banks and policymakers to foster an environment conducive to the development of robust, secure, and customer-focused digital banking services. In summary, this thesis affirms that centralized digital banking is not merely a defensive strategy against the rise of DeFi but a forward-looking approach that will define the future of banking. https://lnkd.in/et6diHN3

Malaysia Fintech Report 2024: Will Digital Banks Usher in a New Era of Banking?: Malaysia Fintech Report 2024: Key trends, developments and everything you need to know about Malaysia's fintech scene in one report. #finpeform #fintech

Hong Kong Monetary Authority (HKMA) has released a report on review of Virtual Banks in Hong Kong, with a total of 8 licensed virtual banks with launches since 2020 and 2.2 million depositors at the end of 2023.   The HKMA will not issue new Virtual Bank licenses, and is proposing to rename Virtual Bank to Digital Bank.  Read - https://lnkd.in/gq7PBUxs follow Caproasia | Driving the future of Asia The Hong Kong Monetary Authority (HKMA) has released a report on review of Virtual Banks in Hong Kong, with a total of 8 licensed virtual banks with launches since 2020 and 2.2 million depositors at the end of 2023.   The HKMA will not issue new Virtual Bank licenses, and is proposing to rename Virtual Bank to Digital Bank. Eddie Yue, Chief Executive of the HKMA: “Looking ahead, with the diversity of VBs and incumbent banks, the HKMA considers that the current number of virtual banking licenses is optimal and does not see any strong justification to introduce more new VB players to the market at this juncture.” HKMA (6/8/24): “The Hong Kong Monetary Authority (HKMA) issued today (6 August) a report on its review of virtual banks (VBs) (the Report).  The review was conducted in 2024, several years after the eight VBs commenced their business in 2020, to look into their operations and impact on the Hong Kong banking system. The review aims to: (i) assess how well the three policy objectives of introducing VBs to Hong Kong have been delivered so far; (ii) review the level of market acceptance, business and financial performance, and user response of VBs since their inception; (iii) discuss the challenges facing VBs and the HKMA’s policy initiatives to support their development; and (iv) recommend the next steps for further development of the VB industry … … Based on the results of the review, the development of VBs in Hong Kong has so far achieved the three policy objectives of introducing virtual banking. Furthermore, virtual banking, the innovative banking model driven by the adoption of technology, is gaining wide market acceptance in Hong Kong, with a total number of 2.2 million depositors as at the end of 2023. The products and services offered by the eight VBs have also received positive response.  In terms of business and financial performance, VBs faced challenges in launching their business at the beginning mainly due to the outbreak of the COVID-19 pandemic and none of them had achieved profitability as at the end of 2023.  Nevertheless, they recorded moderate business growth over the past three years, and their operating performance continued to improve, with aggregate operating income increasing seven-fold and net losses narrowing by 15% from FY2021 to FY2023 .... ... Hong Kong Monetary Authority (HKMA)

HKMA Releases Review Report on Virtual Banks On August 6, the Hong Kong Monetary Authority (HKMA) issued a report on its review of virtual banks (VBs) to look into their operations and impact on the Hong Kong banking system.  Based on the results of the review, the development of VBs in Hong Kong has so far achieved the three policy objectives of introducing virtual banking. Furthermore, virtual banking, the innovative banking model driven by the adoption of technology, is gaining wide market acceptance in Hong Kong, with a total number of 2.2 million depositors as at the end of 2023. The products and services offered by the eight VBs have also received positive response. In terms of business and financial performance, VBs faced challenges in launching their business at the beginning mainly due to the outbreak of the COVID-19 pandemic and none of them had achieved profitability as at the end of 2023. Nevertheless, they recorded moderate business growth over the past three years, and their operating performance continued to improve, with aggregate operating income increasing seven-fold and net losses narrowing by 15% from FY2021 to FY2023. Mr Eddie Yue, Chief Executive of the HKMA, said, “Looking ahead, with the diversity of VBs and incumbent banks, the HKMA considers that the current number of virtual banking licenses is optimal and does not see any strong justification to introduce more new VB players to the market at this juncture.” The Report and the public consultation paper of the renaming can be viewed on and downloaded from the HKMA website： https://lnkd.in/g576prY9 https://lnkd.in/g_ksD4az

Hong Kong Monetary Authority (HKMA) has released a report on review of Virtual Banks in Hong Kong, with a total of 8 licensed virtual banks with launches since 2020 and 2.2 million depositors at the end of 2023.   The HKMA will not issue new Virtual Bank licenses, and is proposing to rename Virtual Bank to Digital Bank.  Read - https://lnkd.in/gkPQJpK9 follow Caproasia | Driving the future of Asia The Hong Kong Monetary Authority (HKMA) has released a report on review of Virtual Banks in Hong Kong, with a total of 8 licensed virtual banks with launches since 2020 and 2.2 million depositors at the end of 2023.   The HKMA will not issue new Virtual Bank licenses, and is proposing to rename Virtual Bank to Digital Bank. Eddie Yue, Chief Executive of the HKMA: “Looking ahead, with the diversity of VBs and incumbent banks, the HKMA considers that the current number of virtual banking licenses is optimal and does not see any strong justification to introduce more new VB players to the market at this juncture.” HKMA (6/8/24): “The Hong Kong Monetary Authority (HKMA) issued today (6 August) a report on its review of virtual banks (VBs) (the Report).  The review was conducted in 2024, several years after the eight VBs commenced their business in 2020, to look into their operations and impact on the Hong Kong banking system. The review aims to: (i) assess how well the three policy objectives of introducing VBs to Hong Kong have been delivered so far; (ii) review the level of market acceptance, business and financial performance, and user response of VBs since their inception; (iii) discuss the challenges facing VBs and the HKMA’s policy initiatives to support their development; and (iv) recommend the next steps for further development of the VB industry … … Based on the results of the review, the development of VBs in Hong Kong has so far achieved the three policy objectives of introducing virtual banking. Furthermore, virtual banking, the innovative banking model driven by the adoption of technology, is gaining wide market acceptance in Hong Kong, with a total number of 2.2 million depositors as at the end of 2023. The products and services offered by the eight VBs have also received positive response.  In terms of business and financial performance, VBs faced challenges in launching their business at the beginning mainly due to the outbreak of the COVID-19 pandemic and none of them had achieved profitability as at the end of 2023.  Nevertheless, they recorded moderate business growth over the past three years, and their operating performance continued to improve, with aggregate operating income increasing seven-fold and net losses narrowing by 15% from FY2021 to FY2023 .... ... Hong Kong Monetary Authority (HKMA)

Title: The Future of Banking: Virtual Banks and Digital Currencies, Insights from Hong Kong Body: As the financial world stands on the brink of a digital revolution, Hong Kong's vibrant ecosystem of virtual banks and the exploration into Central Bank Digital Currencies (CBDCs) offer a glimpse into what the future might hold for global banking practices. Hong Kong’s Virtual Banks: Pioneering the Digital Frontier Hong Kong has been at the forefront of the virtual banking revolution, with the Hong Kong Monetary Authority (HKMA) granting licenses to eight virtual banks as part of a strategic move to promote financial innovation, inclusion, and competition. These banks include: ZA Bank Airstar Bank Fusion Bank Livi Bank Mox Bank Ping An OneConnect Bank WeLab Bank Ant Bank These virtual banks, leveraging cutting-edge technology, offer a range of financial services entirely online, without traditional physical branches. They embody a shift towards more accessible, efficient, and user-friendly banking experiences. The Role of CBDCs in the Virtual Banking Ecosystem The exploration and potential adoption of CBDCs, like Hong Kong's ongoing CBDC research, could further accelerate the transition to virtual banking. CBDCs represent a digital form of a country's fiat currency, combining the convenience and security of digital currencies with the regulated, reserve-backed money circulation of traditional banking. Implications for the Future of Banking Worldwide The integration of CBDCs with virtual banking models, as exemplified by Hong Kong, suggests a future where banking is more: Inclusive: CBDCs can be designed to reach unbanked populations, reducing barriers to entry for basic financial services. Efficient: Transactions can become faster and cheaper, with CBDCs streamlining settlements and reducing the need for intermediaries. Secure: With advanced cryptographic techniques, CBDCs could offer enhanced security features, mitigating fraud and theft risks. Innovative: The combination of virtual banks and CBDCs could foster a hotbed of financial innovation, leading to new services and products that cater to the digital-first consumer. A Global Reflection? As countries around the world consider the adoption of CBDCs, Hong Kong’s journey offers valuable lessons. The synergy between virtual banks and digital currencies could redefine banking norms, pushing the industry towards a branchless, digital-centric future. Yet, this transition also necessitates thoughtful regulatory frameworks, robust cybersecurity measures, and strategies to ensure digital inclusion. Is the rise of virtual banks and the potential adoption of CBDCs a global preview of the future of banking? The evolution underway in Hong Kong certainly makes a compelling case for what’s possible when technology meets traditional finance.

Axiata banking unit launches app: Axiata subsidiary Boost Bank officially launched its mobile app, five months after securing approval from Malaysia’s central bank and the Finance Ministry to launch digital banking services. In a statement, Axiata noted existing e-wallet users can open a Boost Bank account via a “seamless onboarding process”, adding the digital bank is working with a number of local partners to “meet the financial needs of the underbanked and unbanked” by providing rewards and savings on daily necessities. Boost Holdings, the group’s fintech arm, had more than 10 million e-wallet customers in Malaysia in early January. Boost and RHB Bank hold 60 per cent and 40 per cent stakes in the bank, respectively. Axiata Digital Services owns 78 per cent of Boost, with Singapore-based Great Eastern holding the remaining interest. In 2022, Bank Negara Malaysia issued digital banking licences to Boost, Grab-led GX Bank, AEON Bank, a consortium of SEA and YTL Digital Capital, and KAF Investment Bank. GX Bank started operations in Q4 2023, while AEON Bank opened for business in early 2024. The other two have yet to launch services. The post Axiata banking unit launches app appeared first on Mobile World Live. http://dlvr.it/T7y3zs

Are digital first banks in Asia poised to lead a disruptive charge against well-entrenched, established commercial banks? In the traditional banking sphere globally, but especially true in Asia, there is a considerable proportion of unbanked and underbanked populations who lack complete or any access to banking services. This is particularly prevalent in developing markets, while in more mature markets, commercial banks often fall short in delivering a personalised and streamlined digital experience to their customers, leading to customer dissatisfaction.

#banking | #fintech | #innovation | #payments | #virtualbanks | #HongKong : Hong Kong Monetary Authority (HKMA)'s Report on the Review of Virtual Banks. The introduction of virtual banks (VBs) in the Hong Kong banking sector was one of the key initiatives announced by the Hong Kong Monetary Authority (HKMA) in September 2017 in transforming Hong Kong into the smart banking era. The VB initiative aims to achieve three policy objectives in Hong Kong, namely: (a) promoting fintech and innovation; (b) offering new customer experience; and (c) promoting financial inclusion The HKMA Review notes that the launch of VBs in Hong Kong has contributed positively to the banking sector’s fintech adoption and innovation. VBs introduced innovative business and operating approaches through adoption of emerging technologies in product and service offerings, such as remote on-boarding, flexible time deposits, tailored loan products and expedited loan approvals, and special payment card features. The ecosystem becomes more active with incumbent retail banks also accelerating their own digital transformation. Furthermore, the innovative products and services by VBs have brought about new customer experience and helped further promote a customer-centric culture across the banking sector. Indeed, according to a survey commissioned by the Virtual Banking Education Taskforce set up by The Hong Kong Association of Banks (the “HKAB Survey”) in February 2023, there was positive feedback with the majority of individual and SME customers having considered the VBs as innovative and convenient. In addition, VBs have had a positive impact on financial inclusion by removing minimum balance requirements and offering more accessible financing options, especially for small businesses and individual borrowers. In terms of market acceptance, since the official launch of the eight VBs in 2020, they have seen growing acceptance, evidenced by a robust growth in the number of depositors, amount of customer deposits, as well as loans and advances. As at the end of 2023, the VBs had a total number of 2.2 million depositors. The collective market shares of VBs among all retail banks in Hong Kong in terms of total number of depositors increased notably to 8.8% in 2023, indicating strong customer acquisition. However, the VBs have yet to translate this momentum into higher business volumes. Their collective market shares among all retail banks in Hong Kong, in terms of customer deposits, loans and advances, and total assets, was relatively small at around 0.3% at the end of 2023.