What is a virtual bank?

Virtual bank

A virtual bank is a bank that offers banking services through electronic channels. All services of virtual banks can be performed online and there are no bricks-and-mortar branches. Clients can open an account, make deposits, taking out loans and perform other banking transactions via a mobile app or through the website of the virtual bank, thus saving time due without having the need to visit a bank.

According to the requirements of the HKMA, virtual banks should engage primarily in retail businesses. They should not impose any minimum account balance requirements or low-balance fees on their customers to facilitate financial inclusion. Despite having no physical branch, a virtual bank must maintain a physical office in Hong Kong as its principal place of business in the territory to deal with client enquiries or complaints.

In Hong Kong, virtual banking is a new service. However, virtual banks have been operating in Europe, the U.S., Japan and other countries for quite some time. Overseas experience shows that virtual banks could significantly save on rent and manpower. Coupled with the innovation and improved efficiency made available by fintech, they can offer competitive, personalised and convenient banking services and an all-new experience to customers.


9 December 2019