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The pandemic crisis has accelerated the growth of fintech market, we can also witness the blossoming of a new form of banking system in Asia– Virtual Bank. Back in 2019, Hong Kong Monetary Authority have issued licenses to eight virtual banks and all of them have launched their service to the general public after years of preparation.
May 7, 2021 – Hong Kong
It’s been around a year since eight virtual banks started to operate in Hong Kong. Recent news has reported on the industry facing challenges in making profits in their first year of business despite throwing in money and resources. Leveraging proprietary Data Management Platform (DMP) and sophisticated data analytics capability, Vpon Big Data Group (“Vpon”), an Asia’s leading big data company, has recently released the inaugural report on Hong Kong’s virtual banking industry, exploring the potential and unveiling user profile and significant trends on these digital-first challenger banks
The report suggested 24/7 operations attributed to higher accessibility of banking services in residential district and higher user’s activeness at midnight, generally from 1 a.m. to 4 a.m. Virtual banks are not only popular among the younger generation, but also digital learners and further extend to entertainment lovers. Unlike traditional banking users who are devoted in finance-related ads, virtual banking users are deemed as technologically adept populations, being more active in engaging in toys & games and electronic gadgets.
Despite the challenging business environment, the report projected an impressive growth of the virtual banking sector over the past year by launching various initiatives for brand building to lure potential customers. Some of them have acted in concert with different market pre-conditions and government benefits to formulate specific offerings, such as account opening rewards, high deposit interest rate and maximum cashback to attract new customers.
The report revealed that virtual bank users are highly enthusiastic about the mentioned offers. For instance, ZA Bank was the first to offer promotional package upon Government’s Cash Payout Scheme to attract users, which resulted in a 500% growth rate of new install. Fusion Bank, on the other hand, collaborated with a TV channel by sponsoring digital red packets and cash coupons worth over HKD 20 million. Meanwhile, Mox Bank leveraged strategic cooperation and became the first virtual bank in Hong Kong to launch credit on card service, aiming to turn loss into profit as a mid-to-long-term market strategy.
According to Vpon’s owned data analytics platform – AppVois, the emergence of virtual bank also attributes to an increasing penetration of banking and finance-related Apps to 89%. Without doubt, virtual bank is gradually becoming a catalyst that drives Hong Kong banking system revolution and fully unleashed the potential and opportunities in this market.
The ongoing pandemic situation presents a mix of opportunities and challenges for the new incumbents, not merely in Hong Kong but also countries intending to or developing cutting-edge banking system. Riding on the experience of Hong Kong, new entrants in other regions can also learn and refer to Hong Kong as an example for the boosting virtual banking development.
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