The joint venture between Standard Chartered Bank Hong Kong, PCCW, HKT, and Ctrip Finance aims to launch virtual bank services in Hong Kong in six to nine months. Basic banking facilities including lending and deposit will be available in its first batch of virtual banking services.
The Hong Kong Monetary Authority granted three virtual banking licenses last week. SC Digital Solutions—the joint venture between Standard Chartered, PCCW, HKT, and Ctrip Finance—is one of the three license holders. Standard Chartered is the biggest shareholder of the joint venture. The other two licenses are handed out to Livi VB and ZhongAn Virtual Finance.
“This is a full banking license. We strive to start the business running with some basic banking services including lending and deposit,” said Mary Huen, CEO at Standard Chartered Hong Kong. “I don’t eliminate any possibility that we will launch other services but we will look at how the market and our customers respond to it.”
She added that the joint venture is working on many post-licensing tasks including the confirmation of risk management framework such as anti-money laundering, Know Your Customer, and opening accounts on-the-go processes, as well as system testing and talent hiring.
The joint venture's virtual banking team consists of 100 people, including local talent, staff from Standard Chartered, and virtual banking experts from overseas. The team will continue to hire experts with a broad range of skill sets and experiences.
The partnership with PCCW, HKT, and Ctrip Finance will create a greater integration of lifestyle services such as travel, entertainment, and telecom into the banking space, according to Huen. For example, when a user is buying air ticket and booking a hotel via the Ctrip app, he could get travel insurance and foreign currency exchange services in one go on his mobile phone.
Both HKT and Ctrip Finance see the cross-sector partnership to draw upon each other’s expertise to offer greater value to customers.
“The new virtual bank will deepen customer relationship, create customer stickiness and an additional revenue,” said Susanna Hui, executive director and group managing director at HKT.
“We’ll provide our expertise in the travel industry to the virtual bank and bring more value to customers through financial technologies,” said Janet Feng, CEO of Ctrip Finance and senior VP of Ctrip Group.
Despite the establishment of a virtual bank, Standard Chartered will continue to invest in its traditional bank business. “Traditional bank and virtual bank will work in parallel. They will be both our important business streams,” Huen said.