What happened: The Hong Kong Monetary Authority (HKMA) has issued three virtual bank licenses to companies backed by Chinese tech giants. Companies that obtained the long-awaited permits include a joint venture (JV) between Bank of China and JD.com’s finance arm, JD Digits; a company jointly established by Chinese insurance company ZhongAn and realtor Sinolink; and a JV between the finance unit of online travel agency Ctrip, Standard Chartered, Hong Kong Telecom (HKT), and its parent PCCW. The companies intend to launch operations in six to nine months, according to HKMA.
Why it’s important: Virtual banking was part of the wider fintech push announced by the HKMA in 2017. Similar to traditional retail banking services, virtual banks will be able to accept deposits and offer loans. The licenses will give companies access to the retail banking market in Hong Kong, Asia’s financial hub. The HKMA is said to have five more licenses in the pipeline from rumored applicants including Tencent’s Tenpay, Alibaba’s Ant Financial, Xiaomi, and Ping An Insurance.