A look at the revised ‘Guideline on Authorization of Virtual Banks’, which applicants will be given priority, and how KPMG can help
On 30 May 2018, the HKMA published a revised Guideline on Authorization of Virtual Banks (“the Guideline”) following the completion of a public consultation which was launched in February 2018. The key message is that the introduction of virtual banks (VBs) is going ahead in Hong Kong. The HKMA received more than 50 indications of interest, and hopes to start granting licences towards the end of this year or in the first quarter of 2019.
The revised Guideline does not have any major changes compared with the consultation draft. Although no new barriers have been put in the way of VBs being established, none of the requirements in the draft have been relaxed or removed (some of which are additional to the requirements for conventional banks, e.g. the exit plan).
The document looks at the final version of the Guideline and the criteria for applicants. It also explores how KPMG China can help by developing a viable strategy and business model, supporting throughout the virtual bank authorisation process, providing independent assessments of the key areas required by the HKMA, and designing and implementing an effective IT target operating model.