HKMA reviewing digital banks’ evolution over next decade, examining AI’s impact on talent
- Operational risks and scams are major concerns for HKMA deputy CEO Arthur Yuen, one of the longest serving banking regulators in the city
The Hong Kong Monetary Authority (HKMA) is assessing the way forward for the development of digital banking in the city and working with banks on the impact of artificial intelligence (AI) on jobs in the industry.
The city’s de facto central bank is evaluating whether virtual banks have achieved the goals of financial inclusion, improved customer experience and competition with traditional banks, and reduced fees.
“The HKMA will complete the review within this year on the way forward for digital banking development in Hong Kong in the next five to 10 years,” deputy CEO Arthur Yuen Kwok-hang said in an interview.
“Overall, we believe the virtual banks have successfully achieved their goal of cutting down fees and adding in competition. We are reviewing whether the current number of digital banks already provide enough choice to customers, as well as on other issues to improve the sector.”
The HKMA issued eight virtual bank licences in 2019 to inject innovation and competition into the industry. ZA Bank, WeLab Bank, Mox Bank, Ant Bank, Livi Bank, Ping An OneConnect Bank, Airstar Bank and Fusion Bank started operations in 2020. They are not allowed to have any physical branches and can only offer banking services online.
These virtual banks, which the HKMA will soon rename as digital banks, had garnered a combined 2.2 million customers by the end of last year, an increase of 20 per cent from a year earlier, according to HKMA data.
