In this DigFin series on virtual banks in Hong Kong, we have started with the premise that these fintechs are struggling to attract and keep customer deposits, so we are asking their CEOs how they intend to achieve profitability. The exception of the eight licensed digital banks is Mox Bank, majority owned by Standard Chartered along with PCCW, HKT and Ctrip Financial Management. Mox has attracted the largest userbase of the eight.
It’s also the only bank in this survey that shared recent numbers with DigFin , even if these are cherry picked. With more than 550,000 customers, Mox now claims a penetration rate of the bankable population of above 10 percent—and for people below the age of 40, that figure is 20 percent. This doesn’t translate into dollar amounts in deposits that match established incumbents, but Mox says it accounts for about 30 percent of all virtual bank deposits and loans.
It continues to grow both at a rapid pace. Growth versus profits It seems likely over time that consolidation will come to virtual banking. Although M&A is unlikely to take the form of ‘VB1’ swallowing ‘VB2’ (it’s more likely to be reshuffles among shareholders or an incumbent acquisition), this makes Mox look like the most attractive asset among the lot.
Even so, Mox has yet to reach escape velocity. It’s still being compared among its fintech peer set, rather than seen as a serious benchmark versus an HSBC or a Bank of China: that’s the purview of Mox’s biggest share.
