Fintech Insider Podcast by 11:FS
00:10:14 · Valentina Kristensen, Ross Gallagher
[00:10:14] S3: That's why they were, like, [00:10:15] S0: great Yeah. Free to Alright. I'm gonna move us on. Our next story comes from Fintech Futures and concerns Standard Chartered naming their new Hong Kong virtual bank. So the multinational bank has partnered with two national telcos and a travel agency to launch MOX. The new challenger will offer numberless bank cards that store customer information in app, which is very on trend. Mox is currently in beta testing and is expected to launch later this year. And Standard Chartered were one of the first banks to get a virtual banking license from the Hong Kong Monetary Authority, HKMA. And since then, five other banks have been approved. So I think that for me is the headline of this one. It's the the power and the the potential impact of a sort of open and proactive regulator.
00:11:06 · Sarah Kocianski, Ross Gallagher
[00:11:06] S1: Yeah. I mean, they've got... I think they've got eight licenses that have been up for grabs in the first wave. It's really interesting to see watch the HKMA because like many regulators around the world that have their systems based on The UK regulation, so I'd hate to use the word colony, but if you look at the regulators around the world that do have a very similar operating process and system to The UK, is Hong Kong, it's Singapore, it's Australia. So they tend to have a similar way of working. And HKMA has done that, you know, fantastic thing of looking what everybody else is doing, gone that's worked, that's worked. No. Let's not do that. Yeah. And and and and brought that, you know, and and brought that to reality. I think, you know, the fact that they've they've gone quite large and they've gone with eight to start with because we look at Australia, they've got a new licensing regime, but they've only got, you know, three or four that have actually managed to go through the process in the last two years. Really interesting as well to see the way that they're they're testing this as well. So the banks go into a sandbox, you know, to test things out before they go live. So the other bank that's currently in the sandbox is China's z... ZaBank, zed a bank, XiaBank, whatever you fancy. [00:12:13] S0: It's it's one of the three, right?
00:12:13 · Ross Gallagher, Sarah Kocianski, Valentina Kristensen
[00:12:13] S0: It's it's one of the three, right? [00:12:14] S1: It's one of the three. So I I I like that process as well. I think, you know, HKMA is... Has learned from from other markets. Its use of Sandbox has worked elsewhere. Brilliant. Interesting point about whatever that bank is, day bank, and they had 2,000 people express interest before it even went into the Sandbox. So I think these banks are are are gonna do well in that market. [00:12:32] S3: Well, also what's interesting is seven of the eight pending licenses that you mentioned are backed by Alibaba, Tencent, Xiaomi, and Bank of China. So, you know, again, really, really interesting. It just shows you... I mean, there's Alibaba's kind of been in in... And Tencent as well have been in fintech for for a while, whether it's through, you know, Alipay, WeChat, etcetera. So I mean, it's, it's great to see that that, you know, they're obviously using their their their scale to now try and take advantage of this of this change with the with the new digital banking licenses. Obviously, you've had a couple of players like Revolut and Tandem express interest in going to Hong Kong. I mean, Tandem said in November last year that it would roll out an early adopter program before the end of last year. I don't know if that happened.
00:13:17 · Sarah Kocianski
[00:13:17] S1: I don't believe so because I think Tandem has other things going on at the moment if you look at its recent fundraising round and its purchase of a lender. But just to your point there, Val, I completely agree. One of the really interesting things about Hong Kong and the Hong Kong virtual bank market as well is exactly as you say, how many of them are JVs. So that's not something we've already seen somewhere else. And that says two things to me. One, that the incumbents are aware and then need to, you know, up their game. They're not just gonna let these new guys come in and and and take it away from them. And two, that that this kind of like ecosystem is becoming bigger and bigger and more and more sprawling and more and more players are getting involved. You know, why wouldn't telcos be involved in neobanks? It does kind of make sense when you look at some of the technologies involved. So I think that's kind of almost the unique thing about Hong Kong. I'm really intrigued to see how it plays out.
00:14:01 · Ross Gallagher, Valentina Kristensen, Sarah Kocianski
[00:14:01] S0: I think your point that I really wanted to pick up on was around this with that cultural alignment between particularly The UK and Hong Kong and how that's played out I think in a regulatory sense. We know that the HKMA, we've spoken to them, we've got a good relationship with guys there, that they've had our eyes on particularly the FCA and sort of see them as the gold standard. What I think is also interesting is value mentioned like Revolut. This idea of startups from The UK in particular being able to go into HKMA into Hong Kong, test the market with a view to then sort of maybe moving into like Mainland China and actually sort of potentially acquiring a much larger customer base. [00:14:44] S3: Well, it's one of the fintech bridges with Hong Kong? [00:14:46] S1: It is. Yeah. So I don't know all of them off top my head, but Hong Kong, Australia is definitely another Singapore. South Korea, [00:14:52] S3: I think. [00:14:53] S1: South Korea, that's an interesting one. And there is one with... I... It's not Canada. I think it's Ontario. It's like one of the Canadian districts. But, again, that speaks to your point about kind of the the old relationships or old alliances, if you like.
00:14:53 · Sarah Kocianski, Valentina Kristensen, Ross Gallagher
[00:14:53] S1: South Korea, that's an interesting one. And there is one with... I... It's not Canada. I think it's Ontario. It's like one of the Canadian districts. But, again, that speaks to your point about kind of the the old relationships or old alliances, if you like. [00:15:05] S3: The thing with Revolut, so I looked because I was... I... You know, when when we were sort of reading about this story, obviously, one of their big backers is DST Global who are based in Hong Kong. On the website, it says they're recruiting for over 420 positions at the moment, but none are in Hong Kong. So I don't know if that's... They haven't, you know, then maybe they're sort of deciding what kind of people they want to hire there. Maybe they're waiting until, you know, they've kind of, I guess, got got a license or gotten more sort of, perhaps, partnered with someone who has a license. [00:15:33] S1: I mean, they are operating in Australia, Revolut. Mhmm. So... And not part of, you know, the latest money they've raised is to go towards that. So I wonder if they've actually looked at it and thought that they... Why have a base in both Hong Kong and Australia? Because from Australia, maybe you can do work across Asia as well. I don't know that, but but I just think that might be another option for their strategy. [00:15:52] S0: Alright. Well, for more on this, we turn to Mox CEO, Denise Goven, who had this to say.