Over 60 applicants scramble for a Hong Kong virtual banking license

This includes Standard Chartered Bank and online loan platform WeLab.

A total of 60 companies have already expressed interest to apply for a virtual banking license in Hong Kong as the Asian financial hub finally open its doors to the new technology, reports South China Morning Post.

The mix includes a motley assortment of incumbents like Standard Chartered and fintechs WeLab and Yedpay! who are amongst those said to be gunning to meet the August 31 deadline for applications.

The new virtual banks are expected to add to the 154 local and overseas lenders that are already licensed in Hong Kong, where they operate 1,129 branches and 3,300 automated teller machines (ATMs) as of end-2017.

The move comes after the de-facto central bank Hong Kong Monetary Authority (HKMA) published revised guidelines on the authorisation of virtual lenders following a thorough public consultation.

“We hope to be in a position to start granting licences to virtual banks towards the end of this year or in the first quarter of next year,” HKMA chief executive Norman Chan said in an earlier statement. 

Branchless banking in space-starved Hong Kong would mean that lenders can save up on skyrocketing rental costs where a typical 2,000 sqft bank branch goes around $1m monthly, reports SCMP.

A branch of that size would also need around 40 cashiers, bankers, accountants and security personnel to maintain, which is expected to rack up another $1m in monthly staff costs.