Fintech
Virtual banks to shake up the competition in Hong Kong’s banking landscape, finds KPMG’s Hong Kong Banking Report 2019
Hong Kong is set to witness the launch of its first virtual banks following the recent issuance of eight licences by the Hong Kong Monetary Authority (HKMA). These new players are expected to broaden the selection of banking options, foster innovation and enhance customer experience in the city. Moreover, the new entrants will be vying to increase their market share and customer base, while the incumbent traditional banks will seek to maintain their standing in the market.
The unbundling and rebundling of banking services
In the longer term, the development of virtual banking in Hong Kong forms part of a larger ‘unbundling’ story in the banking sector. Many new fintech firms – and now the virtual banks – focus on discrete functions and services along the value chain that traditional banks offer, for example in payments, lending or money transfers. Focusing on an individual segment enables them to exploit the pricing and customer experience gaps left by the traditional banks.
James Harte, Director, KPMG China, said, “Our view is that this unbundling will eventually lead to a ‘rebundling’ of services in new and innovative ways as customers will ultimately prefer to use a single efficient interface for all of their banking needs. This rebundling will lead to a smaller number of winners in the market, likely comprising the few traditional banks that are able to adapt to digital technologies and open banking, new virtual banks and fintechs that are able to knit together seamless services through APIs and other technologies, or some form of hybrid.”
In the medium term, virtual banks are likely to win over a considerable number of customers, but only a minor share of banking assets. Nonetheless, it is certain that the road ahead will be fiercely competitive, and both traditional banks and the new virtual bank entrants will need to develop a strategy for success in Hong Kong, which will include a mix of offence and defence. Overall, customers stand to be the real winners.
What it will take to win: Traditional banks
Traditional banks could take either a defensive approach by looking at where they are vulnerable to disruption – as well as what their customers think about their existing processes – and focus resources on developing appropriate countermeasures; or adopt an offensive strategy involving understanding and exploiting the areas where they might have a competitive advantage over their virtual bank peers. This could involve building completely new platforms or looking to deliver consistent and seamless experience across physical and online channels.
Bank branches are still valuable to customers, especially for high-value transactions, and according to KPMG China’s Customer Experience Excellence Survey, customers do still value human interaction. Success for traditional banks will depend on better understanding customers and adopting a more customer-centric approach, which will require rapid IT and systems transformation. For example, more banks will continue to offer electronic onboarding and customise their digital banking user experience.
What it will take to win: Virtual banks
In order to be successful, virtual banks will need to effectively recruit the right people, put in place the necessary systems, processes and controls, and quickly plug into the local ecosystem all within the next six to nine months. Meeting regulatory requirements and ensuring cybersecurity will also be crucial.
Compared with traditional banks, virtual banks are likely to enjoy cost and operating efficiencies in the KYC process, particularly through digital onboarding. They are also not constrained by legacy systems and infrastructure.
Cultivating an environment for digital banking
Tom Jenkins, Partner, KPMG China, said, “Hong Kong’s digital banking landscape could follow a similar path to other jurisdictions like the UK, where virtual banks have been steadily building their customer base over time. Furthermore, the HKMA’s initiatives to usher in a new era of Smart Banking, coupled with the opportunity to enhance customer experience in the banking sector, are creating an environment for digital banking to thrive in Hong Kong.”
The Faster Payment System (FPS) – which was launched by the HKMA in September 2018 – could be a game changer. It will be interesting to see to what extent the further adoption of FPS for retail payments shifts Hong Kong towards a more cashless society over time, and the extent to which it opens opportunities for virtual banks and traditional banks alike to enhance more direct competition with e-wallets.
SOURCE KPMG
Plug and Play, a global accelerator platform and one of the most active early-stage investors globally, has announced a strategic partnership with Gujarat International Finance Tec-City (GIFT City). Through the partnership, Plug and Play will establish and run the International Fintech Innovation Hub (IFIH), GIFT City’s FinTech Incubator and Accelerator, which aims to foster research and innovation in financial technology, reinforcing GIFT City’s role as a premier global fintech hub.
GIFT City’s MD and Group CEO, Mr. Tapan Ray, said, “Our vision at GIFT City is to drive fintech innovation by creating a climate-resilient, inclusive ecosystem that empowers diverse entrepreneurs and builds workforce competitiveness in emerging technologies. With the support of prominent partners in fintech education and incubation, we are committed to nurturing a new generation of talent that will be well-equipped to meet the needs of an evolving global economy.”
Manav Narang, Head of Financial Services for Plug and Play APAC and Program Lead for the GIFT Incubator and Accelerator added, “We are thrilled to bring Plug and Play’s global expertise to GIFT City. Our vision is to create India’s largest industry-wide fintech program – a collaborative platform where banks, payments corporations, venture capital and corporate venture capital firms, accelerators, and ecosystem partners unite. Together, we aim to catalyze transformative fintech solutions and nurture fintech unicorns that will shape the future of finance in India.”
The program will support fintech startups with resources, mentorship, capital, and networking to navigate and excel globally in the dynamic fintech landscape. The first batch of startups will be unveiled in January 2025.
The post Plug and Play and GIFT City Launch “IFIH,” a Global Fintech Incubator and Accelerator appeared first on .
Doo Group’s brokerage brand, Doo Financial is thrilled to announce its expansion into Indonesia by acquiring a reputable Indonesian broker to expand the business. This move brings its global investment services to local investors. Backed by the strength of Doo Group’s extensive international presence, cutting-edge technology, and 10 years of expertise, Doo Financial is well positioned to support investors at every level.
As a brand encompassing investment services offered by various legal entities within the Doo Group, Doo Financial provides a comprehensive range of global brokerage services. This wide range of products empowers investors to pursue their financial goals.
With a diversified portfolio, Doo Financial empowers investors to navigate various market conditions effectively, manage risks, and focus on long-term growth. This entry into the Indonesian market reflects Doo Financial’s commitment to supporting investors with flexible, high-quality investment options tailored to today’s dynamic financial landscape.
Supervision by International Regulatory Institutions to Ensure Top-Tier Safety
As a global leading finance group, Doo Group has licensed entities regulated by top regulatory authorities worldwide, ensuring a secure and reliable trading environment.
Our global credentials include licenses from the U.S. Securities and Exchange Commission (US SEC), the Financial Industry Regulatory Authority (US FINRA) in the U.S., the Financial Conduct Authority (UK FCA) in the UK, the Australian Securities and Investments Commission (ASIC), the Hong Kong Securities and Futures Commission (HK SFC), Badan Pengawas Perdagangan Berjangka Komoditi (BAPPEBTI) in Indonesia. These licenses enable us to provide secure and reliable financial services globally.
Dedication to Shape the Industry with Innovative Solutions
Doo Financial’s expansion into Indonesia brings advanced technology and a global perspective to empower local investors. As an international investment firm committed to secure and seamless trading, Doo Financial offers a diverse range of products and services to help diversify portfolios and open up new opportunities.
This growth elevates opportunities for Indonesian investors by offering seamless access to global markets and advanced trading platforms within a secure and regulated environment. It broadens investment choices and enhances the trading experience, aligning it with international standards and empowering local investors with comprehensive tools and resources for success.
Driven by unwavering commitment, this growth marks a significant milestone in Indonesia’s investment landscape, equipping our clients with the tools to navigate global markets. We remain dedicated to delivering exceptional service, exploring new opportunities, and driving future breakthroughs. With continued support from the FinTech community, we are excited to innovate and shape the future of finance.
Stay updated with the latest insights from Doo Financial. Join our community of empowered investors and let us be your trusted partner!
E-mail: [email protected]
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Fintech is on an accelerated trajectory of investment, collaboration, and innovation. This pulse tracks the most significant developments in the sector, from high-profile investments to global platform expansions. Each update in this briefing serves as a key indicator of where the industry is headed.
1. European Fintechs Face Regulatory Pressures Amid New Investment Surge
The European fintech sector finds itself at a crossroads with increasing scrutiny and rising costs due to stringent regulations. While investments continue to flow into the continent’s financial technology companies, challenges in meeting new compliance requirements, especially around data privacy and cybersecurity, create a complex landscape for scaling. This tension between opportunity and operational limitations might affect European fintechs’ growth strategies.
Source: Financial Times
2. Shopify, Slack Founders Join Peter Thiel in Fintech Investment Push
Tobi Lütke of Shopify and Stewart Butterfield of Slack, along with investor Peter Thiel, have co-invested in a new fintech initiative that aims to bolster small business access to capital. By merging technology with a streamlined funding model, this new initiative targets underserved SMBs, highlighting a broader trend of high-profile tech leaders pivoting to fintech investment. The participation of Lütke and Butterfield signals increased cross-sector collaboration in fintech, bringing expertise from e-commerce and communication technology into the financial arena.
Source: Yahoo Finance
3. Lean Technologies Raises $67.5 Million to Drive Fintech Innovation in the Middle East
Riyadh-based fintech platform Lean Technologies recently secured a $67.5 million Series B investment round, aiming to expand its operations across the Middle East. This funding reflects growing investor interest in emerging markets and the potential of Middle Eastern fintech to bridge regional gaps in financial services access. As Lean Technologies broadens its service offerings, the funding will support further technological integration and scalability across financial ecosystems in the region.
Source: Fintech Global
4. Apollo Global Management Invests in Fintech for Private Offerings Support
Apollo Global Management has taken steps to enhance its services for private offerings by investing in specialized fintech solutions. This development signifies a growing trend among private equity firms to adopt fintech as a core component in their service expansion, particularly for personalized client services. Apollo’s strategy of integrating fintech solutions into private offerings marks a strategic shift toward digitalization within traditional financial sectors.
Source: Bloomberg
5. Juniper Research Names 2025’s Future Leaders in Fintech
Juniper Research has revealed its picks for the top future leaders in fintech for 2025. This list emphasizes innovation in fields such as AI, open banking, and decentralized finance, highlighting startups that exhibit potential for reshaping industry standards. As these up-and-coming firms push the boundaries of traditional finance, they exemplify the rising tide of next-generation financial technology poised to become industry mainstays.
Source: Globe Newswire
Conclusion
The convergence of seasoned tech giants with fintech, new funding rounds for region-specific platforms, and the rise of future industry leaders underscore the momentum of the fintech sector. Each of these stories reflects a broader narrative: fintech is not only diversifying in services but also rapidly integrating into traditional finance and tech, paving the way for a transformative era.
The post Fintech Pulse: Evolving Fintech Investments and Partnerships Signal Industry Transformation appeared first on HIPTHER Alerts.
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