Factbox: Developments in online-only bank licensing in Asia

Chunghwa Telecom Co

22/01/2020 08:17

By Alun John
    HONG KONG, Jan 22 (Reuters) - Financial regulators across
Asia are creating new rules for online-only banks as they seek
to shake up often staid markets, helped by technology firms
which are able to operate at lower costs without needing
physical branches.
    Below is snapshot of developments in the region.
    
    IN OPERATION
    South Korea led the way with special rules for online-only
banks in Asia, licensing K bank, led by the country's largest
telecom operator KT Corp  030200.KS , in 2016, then Kakao Bank,
operated by chat app operator Kakao Corp  035720.KS , in 2017.
    The Financial Services Commission has also issued a third
preliminary digital licence to a consortium led by Toss, a
mobile money transfer app provider, and which includes the local
subsidiary of Britain's Standard Chartered PLC (StanChart)
 STAN.L .
    
    LICENSED
    Hong Kong issued eight online-only licences in 2018 from 33
applications. Licensees include Ant Financial  ANTFIN.UL  - an
affiliate of Chinese e-commerce leader Alibaba Group Holding Ltd
 BABA.N   9988.HK  - and consortia involving StanChart and
Chinese social media and video game firm Tencent Holdings Ltd
 0700.HK .
    ZA Bank, run by a unit of China's ZhongAn Online P&C
Insurance Co Ltd  6060.HK , has started trial operations, and up
to four others are likely to follow suit early this year, the
Hong Kong Monetary Authority said last week.
    In Taiwan, online-only licences were awarded in July 2018 to
consortia led by Chunghwa Telecom Co Ltd  2412.TW , Japanese
e-commerce firm Rakuten Inc  4755.T  and Japan-based chat app
operator LINE Corp  3938.T  - the latter of which included
Taipei Fubon Commercial Bank Co Ltd  FUBFNB.UL  and StanChart.
The banks are set to start operations later this year.
 urn:newsml:reuters.com:*:nL4N24V2ML
    
    APPLIED
    Singapore in January said it had received 21 applications
for five online-only bank licences on offer. Bidders in various
groups include Singapore Telecommunications Ltd  STEL.SI ,
ride-hailing firm Grab Holdings Inc, Ant Financial and Hong
Kong-listed gaming firm Razer Inc  1337.HK .
    The Monetary Authority of Singapore will issue up to two
retail and three wholesale bank licences, with the winners - to
be announced in June - starting operations from mid-2021.
 urn:newsml:reuters.com:*:nL4N29C057
    
    WHERE NEXT?
    The central bank in Malaysia plans to issue up to five
licences for either conventional or Islamic banking under a
framework set to be finalised later this year.  urn:newsml:reuters.com:*:nL4N29111Q
 urn:newsml:reuters.com:*:nL4N29R1RE
    China is also working to finalise its first rules covering
the online-only bank sector, Reuters reported last week, citing
people with direct knowledge of the matter.  urn:newsml:reuters.com:*:nL4N29D1HZ
    The country already has four online-only banks including
Tencent-backed WeBank and Alibaba offshoot MYbank, as well as
AiBank, whose investors include search engine operator Baidu Inc
 BIDU.O  and China Citic Bank Corp Ltd  601998.SS .

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Taiwan joins Asia digital banking push with 3 new online
licences     urn:newsml:reuters.com:*:nL4N24V2ML
Singapore digital bank race heats up with 21 licence bidders   
 urn:newsml:reuters.com:*:nL4N29C057
Malaysia to open up banking sector to up to 5 new online lenders
next year     urn:newsml:reuters.com:*:nL4N29111Q
EXCLUSIVE-Grab, Razer, AirAsia among firms exploring bids for
Malaysia digital bank licence -sources     urn:newsml:reuters.com:*:nL4N29R1RE
China to frame rules for online-only banks this year in boost to
foreigners -sources     urn:newsml:reuters.com:*:nL4N29D1HZ
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Alun John; Additional reporting by Heekyong Yang
in Seoul; Editing by Christopher Cushing)
 ((Alun.John@thomsonreuters.com; +852-28415827;))