Hong Kong’s digital banks consider physical branches after HKMA rule change

WeLab Bank, ZA Bank and Mox Bank believe face-to-face interactions would be a good addition, while Livi Bank does not see a need

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Published: 7:30am, 13 Jan 2025

Some of the city’s eight digital banks are exploring setting up physical branches after the Hong Kong Monetary Authority (HKMA) cleared the way for them to do so in its continuing effort to aid such lenders’ development.

WeLab Bank, ZA Bank, and Mox Bank are among those considering opening bricks-and-mortar branches, while Livi Bank has no plans to do so, the banks told the Post separately in response to inquiries.

The HKMA issued eight virtual bank licences in 2019 to inject innovation and competition into the industry. The following year ZA Bank, WeLab Bank, Mox Bank, Ant Bank, Livi Bank, PAO Bank (formerly named Ping An OneConnect Bank), Airstar Bank and Fusion Bank started operations.

As the biggest reform for these lenders since their launch, the HKMA in October issued a new rule allowing them to have limited physical branches. It also replaced the term virtual bank with licensed digital bank in a bid to boost public confidence in the firms.

“Taking into consideration feedback from the industry, the HKMA considers that giving flexibility to digital banks to conduct business through non-electronic channels in a limited manner will help improve their transaction processes and enhance customer experience,” a spokesman of the HKMA said.

“The HKMA will carefully evaluate the rationale and justifications when processing applications from digital banks to set up a physical branch.”