The internet firms are gearing up for a new venture, and that is to provide online banking services. The shift by these internet companies into banking is due to the loosening of regulations in Asia to digital companies.
Asian Tech Firms Move To Banking
Asian consumers are open to using the banking services offered by tech firms than others in the world. A Bain research points out that 90% of the consumers who are aged less than 35 in China and India are willing to work with a tech company when compared to 75% users in the US and 51% in France. The reason seen behind this is the increased usage of smartphones in the Asian region especially in India and China where mobile apps are used in several aspects of their lives.
Alibaba and Tencent are the pioneers who set the trend of providing financial services and also created a digital revolution through their payment software In China which later spread to other large countries including India. The same cannot be said about large US companies like Google, Amazon, etc where the focus was on providing technology.
Asian regions which are set to approve online-only banking
Hong Kong who banks mostly with HSBC and Standard Chartered has approved virtual banking licenses to ZhongAn in a big shakeup for the leading traditional banks. Similarly, South Korea has given licenses to two online banks with one of them being for the largest messaging app of South Korea. The bank which became operative in 2017 already has 8.9 million users, and the messaging app has 45 million users. It is also using the latest technology for its automated customer support. The bank spokesman said,
“The 45 million monthly average users of our messaging app KakaoTalk is a huge plus for us when advertising our bank.”
Taiwan and Malaysia are also likely to approve a virtual bank license to LineCorp which is a Japanese Chat app.
The Asian tech companies have a major advantage over their traditional banking counterparts as they have a large customer base already using the other services the companies offer and now with the latest banking service offering seamlessly integrated the customers get better efficiency. ZhongAn International President said ‘If you want to open a bank account in Hong Kong you need to go to a branch, answer questions for an hour, and you still won’t get the account opened without follow up calls. However, all the information needed at the counter can already be collected on a mobile phone’.
Traditional banks now have to gear up to counter this challenge.