Adoption of Virtual Banks and Insurers

Adoption of Virtual Banks and Insurers 32 Survey Findings Deposit protection of virtual bank customers Customers entrust their banks in protecting their deposits and investments. Traditional banks in Hong Kong have demonstrated a long history of trustworthiness and have gained a high level of confidence from the public. In contrast, virtual banks, as new entries in this market, are yet to achieve the same level of trust from the public. The Deposit Protection Scheme was established by the HKSAR to provide protection to bank depositors so as to further strengthen the stability and long-term development of Hong Kong’s banking industry. The respondents were asked if they knew whether customers of virtual banks in Hong Kong are under the same Deposit Protection Scheme. The results in Exhibit 11 indicate that 64.7% of respondents replied “no,” as opposed to “yes” at 35.3%. This finding signals a concern as the majority of the respondents were not aware of the fact that customers of virtual banks are protected, up to a limit of HKD500,000 per depositor under the Deposit Protection Scheme of the Hong Kong Deposit Protection Board. Raising public awareness of this fact can increase the trustworthiness of virtual banks. This may explain why PAOB, Airstar, WeLab Bank and Livi have placed the Protection Scheme’s banner on the front page of their websites, highlighting that deposits of their customers are protected. However, the survey results show that the majority of respondents are still unaware of the Deposit Protection Scheme which covers customers of both traditional and virtual banks. Exhibit 11 Deposit protection of virtual bank customers