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Hong Kong digital banks launch faces delay due to protests: sources
[HONG KONG] The launch of new online-only banks in Hong Kong is expected to be delayed in part due to ongoing anti-government protests in the former British colony, people with direct knowledge of the matter told Reuters.
Most of the eight newly licensed digital banks in Hong Kong, including joint ventures involving Standard Chartered and Bank of China Hong Kong, had aimed to begin operating before the end of 2019.
But as protests continue into their fourth month, the new banks, which are expected to trigger the biggest shake-up to Hong Kong’s lucrative retail banking sector in years, will now launch early in 2020, the people said.
A delay would be the latest sign of the damage being wrought on the Asian financial hub’s economy due to the political turmoil that erupted in June.
Some virtual banks, as the new entrants are called, had aimed to launch brand promotion campaigns as early as this month ahead of a formal launch, but these plans have now been put off, the people said.
“This form of banking service is mainly aimed at the youth, millennials, and many of them are out on the street these days joining the protests,” said a senior executive at one of the licence winners.
“It will be difficult to launch a brand campaign around them and attract their interest when their priority is clearly not having another bank account,” said the executive, who declined to be named as he was not authorised to talk to the media.
More than 100 days of sometimes violent protests in Hong Kong were sparked by a bill that would have drawn the semi- autonomous Chinese territory closer to the mainland Chinese legal system. The bill was withdrawn earlier this month, but the protests have continued.
Hong Kong awarded virtual banking licences to three groups in March - joint ventures led by StanChart and BOC Hong Kong, and a subsidiary of the international arm of Chinese online insurer ZhongAn Online P&C Insurance.
The banks intended to launch services in six to nine months, the Hong Kong Monetary Authority (HKMA) said at that time. Five more licences were issued later.
HKMA said starting six to nine months after authorisation was “not a rigid requirement”, though it said the services were expected to be rolled out to the public in the fourth quarter at the earliest based on the virtual banks’ latest indications.
StanChart said its virtual bank joint venture was working towards a launch in early 2020. Livi VB Ltd, the virtual banking joint venture led by BOC Hong Kong, said it was working towards the launch in the near future. ZhongAn declined to comment.