HSBC says not needs a virtual bank licence in HK

HSBC is strengthening its digital banking capabilities to win over tech-savvy customers as it faces increasing competition from payment services providers and that are set to launch operations over the next few months.

Hong Kong's largest bank has spent US$2.2 billion globally on growth and digital enhancements in the first half of this year, 17 per cent more than a year earlier, according to Andrew Connell, global head of partnership development and innovation, retail banking and wealth management at HSBC.

"HSBC is very keen on investment in our digital platform and talent. We have launched our PayMe app in Hong Kong, which has been very popular. At present, 90 per cent of our transactions in Hong Kong are conducted through a digital platform," Connell told the South China Morning Post in a telephone interview. HSBC is the only note-issuing bank in the city which has not applied for a virtual bank licence. The other two - Standard Chartered Bank and Bank of China (Hong

Kong) - have both set up joint ventures to launch virtual banks.

"HSBC has invested significantly in its digital banking platforms. There is nothing a virtual bank can do which we cannot offer. We do not believe we must have a virtual bank licence to operate digital banking services," said Andrew Eldon, head of digital banking for Hong Kong office at HSBC.

While the bank is cutting headcount globally, it has hired 1,000 staff for its Asia-Pacific and Hong Kong digital teams since Connell joined the bank five years ago.

Last week HSBC released a report titled "Banking of the Future: Finance in the Digital Age", outlining its vision on technology development, which shows the bank not only needs physical branches to serve customers but also robotics and artificial intelligence.

Globally, HSBC has 1,600 robotic devices which processed 11.5 million transactions last year, a tenfold increase from 2017. This has helped the bank to speed up account opening and loan approvals process to better serve its customers.