Hong Kong Monetary Authority Approves Virtual Bank License for WeLab Digital Limited

Welab Digital Limited (WDL) has been approved by the Hong Kong Monetary Authority (HKMA) to receive a virtual banking license. This is the 4th license for a virtual bank which is now approved to operate in Hong Kong since a consultation on digital banking took place in 2018.  The first three licenses were approved last month.

WDL now joins Livi VB Limited, SC Digital Solutions Limited, and ZhongAn Virtual Finance Limited in pursuit of the future of banking which is predicted to be largely mobile. Each banking license takes effect immediately once it is announced.

The HKMA reported that it making good progress in the processing of the remaining 4 shortlisted virtual bank applications indicating that Hong Kong will soon have eight digital bank options.

In a release, WeLab CEO and founder Long Peizhi said they are honored to be issued a virtual banking license.

“The Group will actively invest in the establishment of virtual banking and leverage WeLab’s pure online financial operations experience in Hong Kong and other markets. The development of WeLab Virtual Bank. As a financial technology and venture company established in Hong Kong, obtaining a license is an affirmation of WeLab’s innovative ideas and technical capabilities.”

WeLab was launched WeLend in 2013  as Hong Kong’s first online lending platform. Online lending was WeLab’s first product launch and was designed as an initial step to “pave the way for future geographical expansion.”

WeLab also operates in mainland China including Wolaidai (我来贷), which is one of China’s largest mobile lending platforms.

In 2015, WeLab raised US$20 million in a Series A fundraising round. Investors included CK Hutchison’s TOM Group; Silicon Valley venture capital firm Sequoia Capital; Yuri Milner, founder of DST Global; ICONIQ Capital; and Ule.com, a joint venture between China Post, China’s state-owned postal service and TOM Group.

In 2016, WeLab raised US$160 million in a Series B round. The funding was led by Khazanah Nasional Berhad and included a diverse group of international and domestic Chinese. At the time, the funding was one of the largest for a Fintech firm.

WeLab raised a further US$220 million in 2017 from Alibaba Entrepreneurs Fund and other global financial.

WeLab has expanded into Indonesia and has inked a partnership with CK Hutchison which may enable it to operate in other global jurisdictions.

The government of Hong Kong states that the introduction of virtual banks in Hong Kong is a “key pillar supporting Hong Kong’s entry into the Smart Banking Era.” Public authorities believe digital banking is vital to reinforce Hong Kong’s position as a premier international financial center.

Virtual banks are expected to “not only help drive Fintech and innovation but also bring about brand new customer experiences and further promote financial inclusion in Hong Kong.”

WeLab announced it will appoint Professor Chen Jiaqiang, Senior Consultant of the Group, to be the Chairman of the Board of WeLab Virtual Bank. He is the former Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region and former Dean of the School of Business Administration of the Hong Kong University of Science and Technology.

“The Virtual Bank is Hong Kong. The development of the banking and financial technology industry has opened a new chapter,” said Chen Jiaqiang. “In the future, I will shoulder the responsibility of the chairman of the virtual bank, leading the team to leverage WeLab’s financial technology advantages and implementing inclusive finance with technology.”

WDL intends to launch its services within 6 to 9 months.

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