REPORT OF THE JOINT-PANEL DELEGATION OF THE PANEL ON ECONOMIC DEVELOPMENT, PANEL ON FINANCIAL AFFAIRS, PANEL ON COMMERCE AND INDUSTRY, AND PANEL ON INFORMATION TECHNOLOGY AND BROADCASTING ON ITS DUTY VISIT TO THE GUANGDONG-HONG KONG-MACAO GREATER BAY AREA
MR CHAN CHUN-YING (in Cantonese):
President, a joint delegation organized by four Legislative Council panels visited the Guangdong-Hong Kong-Macao Greater Bay Area (“the Greater Bay Area”) in April this year, to learn about the latest development there and explore opportunities for Hong Kong. During the visit, what is most eye-opening to me is our first destination, the WeBank in Shenzhen.
(THE PRESIDENT’S DEPUTY, MS STARRY LEE, took the Chair)
Headquartered in Shenzhen, the WeBank is founded by renowned private enterprises which include Tencent, Baiyeyuan and the Liye Group, with a registered capital of RMB3 billion. The WeBank obtained an approval to operate from the regulatory body in December 2014, thus becoming the first privately operated bank and Internet bank on the Mainland. As at the end of last year, it had more than 60 million registered clients and an asset of RMB81.7 billion.
“Weilidai” is one of the loan products offered by the WeBank. Characterized by its inclusiveness and convenience, it is the first loan product on the Mainland whose entire operation, from application, approval to lending, is conducted online via the Internet. Weilidai’s target clients are the Mainland general public who have slimmer chances to secure bank loans. As at the end of last year, it provided loans to more than 34 million people. Among Weilidai’s primary loan clients, 78% of them have received tertiary education or below, 76% are non-white collar workers; and of the loan size involved, 92% are under RMB50,000.
Weilidai rides on two major social networking platforms provided by Tencent, with QQ and WeChat users forming the foundation of its clients. Combining the use of big data and biotechnologies such as facial recognition and voiceprint recognition, it is able to identify its clients accurately and averts the risk of fraud. Furthermore, security systems such as third party electronic authentication management, robot customer service, robot debt collection and data accessing are introduced to manage the risk associated with its all online operation. A client can obtain a loan in the range of RMB500 to RMB300,000 simply by providing his or her name, identity card number and phone number―similar to those required by a financial company in Hong Kong―without any guarantee, collateral, nor hard copy materials. The service primarily meets the needs of the general public, and particularly, the small sum consumption needs of some underprivileged people and the operational needs of small businesses.
Weilidai itself is a kind of revolving loan facility allowing flexible drawdown and repayment. Thanks to the in-depth use of the Internet and big data, it piggybacks on mobile device terminals for a 24×365 all-weather business operation. Basically, a loan can reach the account designated by a client in one minute. It is learned that the goal of the bank is to approve a loan in five seconds and have it delivered to an account rapidly within one minute. Its actual operation is even shorter and quicker: the loan approval can be done in as quickly as 0.4 second. This literally materializes the oft-quoted fantasy of completing bank loan procedures “in the blink of an eye”.
Contrary to the above, the conventional financial system in Hong Kong is better developed. There are more than 1 100 bank branches throughout the territory, spanning Hong Kong Island, Kowloon and the New Territories. As at the end of last year, five mobile branches were providing roving service to remote areas and certain public housing estates in Hong Kong, alongside 220 video teller machines installed in the territory. Meanwhile, conventional banks also offer online banking services. Therefore, Hong Kong people can use both physical and online banking services easily.
The Hong Kong Monetary Authority (“HKMA”) has just finished updating the Guideline on Authorization of Virtual Banks. It has allegedly received applications from 29 local, foreign and Mainland financial institutions, technology and mobile payment corporations. As Hong Kong is a small place with a high concentration of banks, the operational challenges facing virtual banks in the territory are completely different from those in the other countries and areas.
Deputy President, financial inclusion is now actively promoted throughout the world with an aim to allow everyone an access to basic banking services. The WeBank uses technology in an innovative approach to provide convenient all-weather services for the general public, and especially the non-conventional bank clients. We have been deeply impressed by it. Meanwhile, intended operators of virtual banks in Hong Kong, management of conventional banks, and the regulatory body of Hong Kong banks HKMA should all vigorously consider how to use new technology and new thinking to take forward financial inclusion. Otherwise, our gap with the financial services in the Greater Bay Area will widen, which is adverse to the continued development of Hong Kong as a financial hub.
Deputy President, I so submit.