Standard Chartered to target young customers in Hong Kong digibank race

Standard Chartered, the 162-year-old lender, is ready to join the virtual banking race in Hong Kong with good prices and convenient services aimed at capturing the tech-savvy younger population, according to group chief executive Bill Winters.

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The bank, which is based in London but generates much of its revenue in Asia, is one of eight firms that won virtual bank licenses from the Hong Kong Monetary Authority (HKMA) last year and is expected to launch new services in 2020.

It has introduced online-only banking services in eight African countries over the last 18 months, and has enhanced its digital banking services in Singapore and India.

Standard Chartered spent US$1.7 billion globally on its digitization and IT costs last year, almost three times what it spent in 2015 when Winters first joined.

“We are very focused on developing digital services. The launch of our Hong Kong virtual bank will be a key strategy for our business,” Winters said in a group interview in Hong Kong last week.

Hong Kong’s first virtual lender, ZA Bank, which started operations in December, kicked off a price war last week by offering a 6.8% interest rate on three-month time deposits for up to 2,000 customers, much higher than traditional lenders’ 2% to 3% for large deposits.

WeLab Virtual Bank, which will start operating later this year, also plans to compete on price at launch, according to group founder Simon Loong.

HKMA deputy chief executive Arthur Yuen said on Friday that with the other seven virtual banks due to roll out their services this year, there will be strong competition in the sector from the outset.

Winters said his team is ready to join the fray.

“Our team has been testing some good, innovative products with a small group of customers. We will offer an attractive package which is not purely based on pricing but also exceptional convenient services for customers,” he said.

“We have introduced eight digital banks in Africa in the last 18 months. The number of new customers we have in Africa over the past 12 months is more than what we had in the prior 12 years.”

Standard Chartered introduced its first virtual bank in Ivory Coast in mid-2018, which attracted 18,000 new account openings in its first year. It expanded its online-only bank to seven other African countries: Uganda, Tanzania, Kenya, Ghana, Botswana, Zambia, and Zimbabwe.

Winters said quick account opening and convenient services were key to the success of its virtual banks in Africa.