Alibaba, Tencent and Chinese Mainland Internet Giants Shake Fintech in Hong Kong


Alibaba, Tencent, Xiaomi and PingAn grant licenses for virtual banking. Should we expect fireworks? The Hong Kong Monetary Authority said the newly licensed banks plan to launch their services in six to nine months


Comparing with Mainland, Hong Kong fintech sector is behind. Fintech is already an established sector in China and it is now part of the daily life of Chinese citizens. This is why the giants of the technology sector in China are looking beyond the Middle Kingdom’s borders for investments opportunities. Chinese companies are aiming to shape the future of the fintech field and to expand the idea of a cashless society. South East Asia has incredible potential.

But today the target is Hong Kong. In march HK bank regulatory system already granted first licenses for virtual banking to JD, Ctrip and ZhongAn. But now PRC big names such as Alibaba or Tencent are knocking on the door.


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Two years ago experts pointed out how in Hong Kong there was a lot of initiatives around fintech in Hong Kong but no official vision for its development. Hong Kong is international finance hub and technologically advanced center for logistics and communications and actually its unique ecosystem let the city become home to some of the world’s hottest fintech startups. But Hongkongers, themselves, have cold approach to this sector.

Despite the talk, and some pockets of activity, a sense of an overarching vision for the sector remained vague at best.  That’s why thanks Beijing fintech top player, Hong Kong government has launched several new initiatives in the past year aimed at solidifying the city’s leading position as a fintech hub.



2018 set a milestone in fintech, let Hong kong definitely wake up. Among these reforms and initiatives, the city launched in September 2018 the Faster Payment System (FPS) and the Common QR Code. The Virtual Banking license in May 2018 and the Open API Framework in July 2018. Moreover, 29 entities have reportedly applied for the new Virtual Banking license. The Hong Kong Monetary Authority (HKMA) is expected to issue the first licenses in the first quarter of 2019.

In October 2018, HKMA launched its blockchain-based banking trade finance platform, eTradeConnect. It combines the services of 12 major domestic and international banks including HSBC and Standard Chartered Bank to enhance cross border trade, and links up with another blockchain platform called, to allow better trading among a network of 14 European banks including Deutsche Bank, Rabobank, and UBS. Anyway, those initiative where not enough.



This gap with People’s Republic is still huge and hard to reduce. Some Western media said that Standard Chartered together with HSBC, the main Hong Kong based bank which earns more than half its profits and a third of revenues in the former Great Britain colony, leading fintech environment, well, this is partially true.

And now something new is going to change and shake, maybe, Hong Kong’s fintech. Finally Tencent, Alibaba, Xiaomi units win Hong Kong online banking license, challenging the old-guard lenders HSBC and Standard Chartered . Should we expect fireworks? The reform will fundamentally change the way how operate businesses in Hong Kong.

The reason it’s easy to explain. Actually HSBC; Bank of China Hong Kong; Hang Seng Bank and StanChart, the four largest banks in Hong Kong account almost two-thirds of all retail banking loans, according to data.  Opening up critical banking services to retail consumers and SMEs, will let start a new phase in Hong Kong banking services.


Who is going to play where? Xiaomi and AMTD Group are ready to change digital bank in Hong Kong and going global.


Alibaba and Tencent are the big names, but Xiaomi is the real surprise. Beijing based tech company  has teamed up with AMTD Group, Hong Kong based investment bank creating Insight Fintech. As the bank stated, Xiaomi and AMTD will contribute their resources and experiences to create a unique virtual banking business.

As a distinct “Internet +” innovative enterprises in China, Xiaomi has already achieved a good degree of globalisation. In 2018, Xiaomi’s international revenue accounted for 40% of the its total revenue. In addition, Xiaomi has a leading position in the IoT field and is currently the world’s largest IoT platform with approximately 151 million IoT devices. In Hong Kong, Xiaomi has a large Hong Kong customer base with approximately 1.6 million active mobile devices.

Xiaomi has also gained good momentum in the field of fintech. Through deploying cloud services, Xiaomi has successfully developed proprietary application platforms including credit core and supply chain management systems employing big data, machine learning and IoT technologies.



Being the shareholder of Xinwang Bank, one of the three pure internet banks operating in mainland China, Xiaomi has accumulated abundant practical experiences in launching applications in the internet banking industry. Xiaomi’s leading technological knowhow in the mobile Internet and fintech capabilities will enable our Virtual Bank to deliver intelligent and supreme customers’ experience to our Hong Kong users.    

But why AMTD Group? AMTD is currently the largest independent investment bank and one of the largest non-bank asset managers in Asia. AMTD is also a leading force in the fintech industry and it has successfully assisted many Chinese leading technology companies and financial institutions to land on Hong Kong and US capital markets, ranking amongst the top players in the global equity and debt offerings league tables.


Infinium Limited: Tencent is ready to spread its QR code?  Alibaba and PingAn “solo” players.


Tencent’s joint venture partners include Industrial and Commercial Bank of China and the city’s stock market operator Hong Kong Exchanges and Clearing. Named Infinium Limited, the JV has  private equity firm Hillhouse Capital, and Adrian Cheng, executive vice chairman of New World Development and executive director of Chow Tai Fook as other partners. Today Tencent became one of the main PRC “hi-tech Great Leap” forefront and one of China’s most celebrated companies. According to data, QQ has more than 800 active users while WeChat, almost 1 billion active users. In addition, the active account of payment business has exceeded 800 million.



In the meanwhile Alibaba and PingAn are playing alone. Hangzhou based e-commerce giant and Shenzhen base insurance company are ready to enter in the arena with any joint venture. Ant SME Services – a unit of Alibaba affiliate Ant Financial – and – PingAn One Connect – financial unit of Chinese insurance giant PingAn – were both granted a licence.


What about other player? JD, Ctrip and ZhongAn are ready to share the market with competitor.


In March, the Hong Kong Monetary Authority (HKMA) already granted the first batch of licences to JD, Ctrip and ZhongAn and their virtual banks named Livi VB, SC Digital Solutions and ZhongAn Virtual Finance. JD Digits, formerly known as JD Finance – an arm of Chinese mainland e-commerce firm JD, together with BOC Hong Kong Holdings and Jardines, founded the joint venture Livi VB with a combined initial investment of HK$2.5 billion ($318 million). JD Digits took a 36 percent stake in the venture.

Ctrip Finance, an arm of China’s largest online travel agency Ctrip, teamed with Standard Chartered, PCCW and HKT to set up the joint venture SC Digital Solutions. Ctrip Finance took a stake of 9.9 percent. ZhongAn Online P&C Insurance joined forces with Sinolink Group to establish ZhongAn Virtual Finance and took a controlling stake of 51 percent, as reported by Chinadaily.



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