Adoption of Virtual Banks and Insurers

Adoption of Virtual Banks and Insurers 27 Survey Findings Brand awareness of virtual banks As part of the strategy to position Hong Kong as a fintech hub in the world, the HKMA issued licenses to eight virtual banks in the first half of 2019. ZA Bank has provided services to the public since March 2020. Four more virtual banks, namely Airstar, PAOB, WeLab Bank, and Livi started their operations from June to August 2020. As the launch of virtual banks represents a watershed of the fintech development in Hong Kong, it is important to understand how the public perceives these new entries. Specifically, what is the brand awareness of virtual banks at this early stage of development? To shed light on this question, the logos and names of the eight virtual banks, together with a randomized pool of traditional banks and financial institutions, were presented to the respondents in the online survey. The respondents were asked if they could identify the virtual banks in the presented list; they could select multiple entries. The results show that 76.4% of the responses are correct. The distribution of brand awareness varies across the eight virtual banks (see Exhibit 7). We observed a positive correlation between brand awareness and the duration the virtual bank had been operating. We also observed that some of the respondents classified the digital banking platforms of traditional banks as virtual banks. As perceived by the public, the difference between virtual banks and digital platforms operated by traditional banks is still not very distinct. Note: The names of the virtual banks are masked as our objective is to assess the overall brand awareness of virtual banks, not their market share. Exhibit 7 Brand awareness of virtual banks Virtual Bank 1 8.4% Virtual Bank 2 12.2% Virtual Bank 3 5.2% Virtual Bank 4 8.8% Virtual Bank 5 9.0% Virtual Bank 6 8.6% Virtual Bank 7 11.3% Virtual Bank 8 13.1% Non-Virtual Banks 23.6%