March 5, 2020
The concept of virtualization came when technology-enabled companies to do away with hardware-based infrastructure growth and use virtualized systems like VMware to increase cost-efficiency. The financial services industry was one of the key beneficiaries of this technology development due to high dependence on the IT infrastructure. But little did they realize that it would soon be possible for an entire financial services company to operate in the virtual mode using virtual banking/insurance licenses and forget the brick-and-mortar style of business.
With every passing day, a financial service’s relevance of physical presence is being challenged. Countries like Hong Kong, Taiwan, Singapore, and Malaysia are making long strides in the direction of virtualization of financial services, which involves banking as well as insurance companies.
Hong Kong pioneered APAC’s Smart Banking Era in 2019. The same can be said based on the announcement by the Hong Kong Monetary Authority (HKMA) on March 27, 2019, which mentions that virtual banking licenses were granted to SC Digital Solutions Limited, ZhongAn Virtual Finance Limited, and Livi VB Limited under the banking ordinance. ZA Bank was the first to launch trials.
In 2019, HKMA approved eight virtual banking licenses. The first three license winners were planning to launch their services by the end of 2019, but some postponed it to early 2020. The planned services by these virtual banks will mainly target public retail businesses and SMEs on the basis of varied revolutio ...