Hong Kong to rename ‘virtual banks’ to ‘digital banks’

The bank will set-out new guidelines shortly.

The Hong Kong Monetary Authority (HKMA) will proceed with amending its guidelines on virtual banks and rename them into digital banks.

In an announcement, the central bank said that it will amend the Guideline on Authorization of Virtual Banks to adopt the new name.

In its public consultation between August and September 2024 involving 26 submissions, respondents reportedly expressed “broad support” for the renaming, with the majority of the respondents supporting the new nomenclature of “Digital Bank” (數字銀行). 

Respondents said that the term “Virtual Bank” (虛擬銀行) is no longer a good representation of banks adopting new technologies and their business models.

They also believe that the proposed renaming would align with global and industry trends.

Some of them also commented that the word “virtual” might give an impression that Virtual Banks (“VBs”) did not engage in actual financial activities, or were engaging in or associated with high risk business activities, the HKMA said.

Amongst participants include Airstar Bank, Ant Bank (Hong Kong), the Fintech Association of Hong Kong, the Institute of Financial Planners of Hong Kong, and PAO Bank.

In a separate statement, ZA Bank, one of the eight digital banks in Hong Kong, welcomed the results of the consultation.

“We welcome the completion of the HKMA’s consultation on the renaming of  ‘Virtual Bank’, and are pleased to see broad support from both the industry and the public that the name ‘Digital Bank’ more accurately reflects the nature of our service,” Ronald Iu, CEO of ZA Bank, said in a statement. 

“We believe that this new name will help address misconceptions and enhance public awareness of how digital banking works,” Iu added.