Nearly 30% of Hong Kong’s 7.5 million population were using digital banks by the end of 2023, reflecting growing trust and familiarity with these platforms.

A recent survey by the Hong Kong Association of Banks (HKAB) shows that over 80% of individuals and 92% of small and medium enterprises (SMEs) are now familiar with digital banks and their services, signaling a notable rise in awareness.

The survey also highlights strong confidence in digital bank security, with over 97% of individuals and 99% of SMEs satisfied with the measures in place.

Contributing to this trust are steps such as the renaming of “virtual banks” to “digital banks” and the increase in deposit protection to HKD 800,000, which covers all banks, including digital ones.

Digital banks are attracting a broader audience, not just the younger, tech-savvy crowd.

While the highest adoption rate is among those aged 26-35, the platforms are also gaining traction with older customers, with 44.6% of those aged 55 and above using digital banking services.

Beyond basic transactions, digital banks are becoming integral to personal and business finances.

The number of services used by individuals has risen from 5 to 13 compared to last year, with around 20% of individuals now managing their salaries through digital banks.

There’s also been a rise in the use of these platforms for insurance, investments, and other services.

Similarly, SMEs are turning to digital banks for more complex services like invoice financing and international remittances.

The survey found that 30% to 40% of SMEs are now using digital banks for invoice financing, business installment loans, and global remittances.

In addition to expanding traditional banking services, digital banks are driving fintech innovation, particularly in the Web 3.0 space.

Many Web 3.0 enterprises surveyed believe digital banks enhance efficiency, reduce costs, and simplify account opening, making them key players in Hong Kong’s growing ecosystem.

Ronald Iu, CEO of ZA Bank, echoed this sentiment, saying,

“We are pleased to see respondents recognising the important role of digital banks in driving Web 3.0 development in Hong Kong. As a local fintech pioneer, we were among the first banks to announce our ‘Banking for Web3’ vision last year, and have since become a trusted banking partner for more than 100 Web 3.0 companies.

Meanwhile, ZA Bank will continue to actively prepare for the collaboration with Hong Kong-licensed virtual asset exchanges to empower local retail investors to trade virtual assets through the ZA Bank App.”

ZA Bank is the first digital bank among the eight in Hong Kong to achieve monthly profitability.

As awareness and confidence in digital banking continue to grow, the HKAB said that it expects even greater adoption.

Featured image credit: Edited from Freepik