Hong Kong Monetary Authority to rebrand ‘virtual banks’ as ‘licensed digital banks’

6th May 2024 – (Hong Kong) The Hong Kong Monetary Authority (HKMA) has announced plans to rebrand the city’s eight branchless banks from ‘virtual banks’ to ‘licensed digital banks’. This decision, driven by the need to shed the potentially misleading connotations of the term in Chinese, was revealed during a one-month consultation period initiated on 30th April.

Arthur Yuen Kwok-hang, deputy CEO of the HKMA, explained that the current Chinese term could be misinterpreted as ‘fictional’, which might undervalue the legitimacy and robustness of these financial institutions. “Aligning the English name with the Chinese is crucial, as similar nomenclature adaptations have been seen in Europe, Malaysia, and Singapore,” Yuen stated.

This rebranding initiative has received backing from several key industry players, including Livi Bank, a digital bank supported by Bank of China (Hong Kong). David Sun, CEO of Livi Bank, mentioned that the term ‘virtual bank’ had caused some confusion among the public, with many associating it with virtual assets rather than comprehensive banking services. “The new designation as ‘licensed digital banks’ clarifies the regulated nature of our operations and will aid in partnership formations both locally and in the Greater Bay Area,” Sun commented.

Further support for the change has come from other digital banking entities such as WeLab Bank, Mox Bank, and ZA Bank. They agree that this new terminology will better represent the services they offer and enhance customer understanding and trust.