Virtual banking: gamechanger for start-up banks and fintech players

HONG KONG is finally welcoming much-needed change to its shores - but not by throwing caution to the wind.

Gearing up for a paradigm shift in digital transformation and financial inclusion for its banking sector, the Hong Kong Monetary Authority (HKMA) announced that it will accept applications for, and selectively issue, licences for virtual banks this year.

Instead of enabling a free-for-all play for virtual banks to enter the highly guarded banking sector of Asia's predominant global financial centre, the HKMA has set a minimum paid-up capital requirement of HK$300 million (S$52.7 million), similar to the requirement for all licensed banks under the Banking Ordinance.