Fintech has transformed our daily lives in all aspects, from banking, money transfers, lending, capital management, etc. In Hong Kong, developing fintech is strongly supported by the Hong Kong Monetary Authority with programs such as Talent Development looking to create 1000 jobs in fintech, the Fintech Supervisory Sandbox, and the Cross-border Collaboration with the Greater Bay Area.
With fintech booming globally, Hong Kong is experiencing a surge of investments flowing into the sector. According to Accenture, Hong Kong attracted fintech investments of more than USD 89 million in Q2 2021, increasing 29% YoY. Given such favor by global investors, Hong Kong needs to keep up its pace in the fintech adoption by regular users such as individual consumers and businesses.
Why do some businesses prefer digital banks/neobanks to traditional banks? Companies usually consider whether the solution is cost-effective and whether the service is prompt. It is worth noting that digital banks/neobanks charge their clients by issuing monthly fees, which, in most cases, are lower than the monthly fees charged by the traditional banks.
Digital banking could be an excellent tool for SMEs operating in Asia. Here are 7 points to help you select the best digital banks/neobank option for your business:
Licensed to operate
Ensure that the digital bank/neobank solution provider has obtained the required license(s) in the region where they operate. Consult with your local advisors to ensure the protection of your assets, privacy, and data security.
Easy to use
Ask for a demo and get to know about the actual process of operating the account. Ensure direct account payment is possible and learn if payments from and to the overseas are supported, especially to mainland China.
Timing is everything in business – knowing real-time performance on international and local transactions helps you monitor your project progresses.
Operation and monthly fees are typical with digital banks/neo banks, and these monthly fees tend to be lower than a traditional bank’s charges. Other costs you need to know before adopting these new solutions are foreign exchange rates, international transaction charges, minimum deposits, etc.
Transparent and accessible
The platform should support your operation by having clear and transparent information, such as transaction procedures, payment formalities, and exchange rates. Ensure the information is available and downloadable for your accountants and auditors.
Foreign exchange enabled
If you operate in different countries, make sure the banking service works with foreign currencies in the same account.
Compliance with local AML rules and regulations
As with every other financial institution in Hong Kong, all platforms will perform their own “Know Your Client” (KYC) procedure and require applicants to provide detail about their operational structure, directors, and shareholders. This is no difference from traditional banking institutions, but digital platforms may not need a face-to-face interview in Hong Kong while applying for a business account.
What CW can do for you
We can help you realise your ambitions of international expansion by taking care of all aspects of your business, from entry into Hong Kong and beyond, HK company set up, HK incorporation, company registration, business account opening including adopting fintech solutions for your business – as well as ensuring ongoing compliance with tax, accounting, auditing and other regulatory requirements, identifying restructuring opportunities, managing your payroll to hiring and upskilling of staff.