Homegrown online bank relies on Bay Area for business acceleration

Hong Kong homegrown financial technology company WeLab aspires to be a pan-Asia digital financial services platform by riding on the connectivity among Hong Kong and the 10 other cities within the Guangdong-Hong Kong-Macao Greater Bay Area.

The mega city-cluster area, with its population of 73 million people and a per capita GDP of over US$23,000, offers the potential for WeLab to scale up its business - from one serving a population of 7.5 million, up to a market with over 70 million people, and eventually across the Chinese mainland with its population of 1.4 billion.

“Hong Kong is home to us. We started here seven years ago and have been operating and building our technology capabilities and know-how, which has enabled us to scale up and expand in other markets, not only across China, but also Asia,” WeLab Senior Adviser and WeLab Bank Chairman Ceajer Chan Ka-keung said.

Tech-savvy consumers

Chan, Hong Kong’s secretary for financial services and the treasury from 2007-17, rejoined the Hong Kong University of Science and Technology in April 2019, around the same time when he became chairman of WeLab Bank.

WeLab Bank is the first homegrown company that was granted a license to operate virtual banking services in the city. It is now one of the major players in Hong Kong, with over 800 employees who serve more than 40 million registered users and over 300 enterprise customers.

Eight virtual banks and four virtual insurers, as well as a virtual asset trading company, have been authorized or been granted an in-principle agreement to operate in Hong Kong.

Home to more than 600 fintech companies and startups, including eight “unicorns” (startups worth at least US$1 billion), Hong Kong has become a mature market among those looking to reach new clients, investors and markets in Asia.

Hong Kong has one of the highest consumer fintech adoption rates in the world. According to the EY Global FinTech Adoption Index 2019, the city’s adoption rate rose to 67 percent last year from 32 percent in 2017, ranking above France, Japan and the United States.

“Asia, especially the Chinese mainland, has embraced fintech’s promise much more readily, and broadly, than the West has. And Hong Kong, a business bridge between the mainland and the rest of the world, is where you can best take advantage of it all,” Financial Secretary Paul Chan Mo-po said at the FinTech Week virtual conference in early November.

Ceajer Chan agreed. “Hong Kong is a perfect landing pad for fintech companies like WeLab that are eyeing opportunities in Asia and as a launchpad for mainland fintech companies seeking international expansion,” he said.

Venture funding

In the first seven months of this year, more than 20 Hong Kong-based startups raised nearly US$500 million in venture funding amid the COVID-19 pandemic.

Looking ahead, WeLab Bank plans to tap the potential financial connectivity within the mega Bay Area region for business upgrades.

“From a financial product perspective, regulators have endorsed cross-border products such as Stock Connect and Bond Connect, and this (endorsement) is a starting point for the development of a wider spectrum of cross-border products, for both mainland and Hong Kong residents to investment by leveraging innovative technologies,” Chan said.

The Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect and the Bond Connect were launched in 2014, 2016 and 2017 respectively to enhance market connectivity between the financial markets across the border.

The nation’s 13th Five-Year Plan (2016-20) mentioned the concept of the Bay Area as a means to transform the megalopolis into a world-class finance, trade, manufacturing and shipping center.