Virtual banks in Hong Kong thrive with 2.2 million depositors in 2023

Hong Kong's eight licensed virtual banks experienced modest growth over the past three years.

Virtual Banks (VBs) are gaining wide market acceptance in Hong Kong, with 2.2 million depositors recorded as of 2023.

Following the issuance of a revised "Guideline on Authorization of Virtual Banks" in 2018, the Hong Kong Monetary Authority (HKMA) granted banking licenses to eight VBs in 2019, all of which began operations in 2020.

Despite the challenges of launching during the COVID-19 pandemic, the products and services offered by the eight VBs have received positive responses.

These VBs recorded moderate growth over the past three years, with operating income increasing seven-fold and net losses narrowing by 15% from FY2021 to FY2023.

In addition, the HKMA said that VBs in Hong Kong have fulfilled the three policy objectives set for their development.

The objectives include promoting fintech and innovation, offering a new customer experience, and promoting financial inclusion.