HKMA Confirms Decision to Rename ‘Virtual Banks’ as ‘Digital Banks’

The HKMA received 26 submissions that were “broadly supportive” of the renaming proposal. It will proceed with the change “shortly”.

The Hong Kong Monetary Authority (HKMA) has concluded a public consultation on the proposal to rename “virtual banks” as “digital banks”.

The HKMA launched a consultation in August proposing to rename ‘virtual bank’ as ‘digital bank’ to address the negative connotations associated with the term “virtual bank” in Chinese, which could be interpreted as ‘fictional’. Arthur Yuen, deputy CEO of HKMA, said the name has a “negative impact on virtual banks.”

In a conclusions paper on Monday (14 October), the HKMA said it received a total of 26 submissions that were “broadly supportive” of the proposal, and the majority of them agreed with the proposed new name “digital bank”.

The HKMA said all institutional respondents and most individual respondents supported the renaming proposal.

Key comments included concerns about the term “virtual” no longer reflecting the evolving nature of financial technologies and banking practices, and the potential for the term “virtual” to imply a lack of real financial activities or high-risk behaviours.

A “few” individual respondents cautioned against renaming, saying that it might confuse members of the public.

Based on the feedback obtained from the consultation, the HKMA said it would proceed with making amendments to its ‘Guideline on Authorisation of Virtual Banks’ shortly to rename “Virtual Bank (虛擬銀行)” as “Digital Bank (數字銀行)” to emphasise the business models and financial technologies adopted by virtual banks.

In an emailed statement, ZA Bank welcomed the completion of the HKMA’s consultation on the renaming of ‘virtual bank’. “We believe that this new name will help address misconceptions and enhance public awareness of how digital banking works.”