Ping An OneConnect, a member of China's Ping An Insurance Group, has received a banking licence effective yesterday from the Hong Kong Monetary Authority (HKMA) under the 'Banking Ordinance', allowing it operate in the form of a virtual bank. The regulator also granted licenses to Ant SME Services (Hong Kong), Infinium and Insight Fintech HK. According to their business plans, these four newly licenced virtual banks intend to launch their services in around 6 to 9 months.

HKMA has granted a total of eight virtual banking licenses since March this year. The regulator said that it will closely monitor the operations of virtual banks after they have commenced business. This includes assessing the reactions of customers towards the virtual banks as well as their impact, if any, on the banking sector in general.

Newly-licensed virtual bank, OneConnect is a part of the Ping An 3.0 open platform strategy and has relied on the FinTech growth of the Ping An Group. Regarded as one of Ping An’s fastest growing companies, the subsidiary was founded in 2015 and was formerly known as Shenzhen Ping An Financial Technology Consulting.

Currently, OneConnect offers over 101 products across four business sectors including digital insurance, banking and investment solutions.

“The launch of virtual banks in Hong Kong, which is a key component of the ‘Smart Banking Initiatives’, will certainly facilitate financial innovation, enhanced customer experience and financial inclusion,” said HKMA chief executive Norman Chan.

The HKMA expects to be able to conduct a comprehensive assessment of the situation about one year after the first virtual bank has launched its service and the opening up of the Hong Kong banking market for Chinese banks and insurers could be a barometer for the opening up of the Hong Kong insurance market to Chinese entities.