WeLab has been granted a virtual banking license by the Hong Kong Monetary Authority (“HKMA”), becoming the first homegrown Hong Kong fintech company to establish a virtual bank.

This brings the total number of approved virtual banking players in Hong Kong to 4. The previous approvals were granted to what is largely considered to be incumbents, consisting of companies backed by the likes Bank of China, Standard Chartered and ZhongAn Insurance.

The current lending industry in Hong Kong is an oligopoly that is dominated by 3 banks namely, HSBC, Standard Chartered and Bank of China which takes up a total of 66% of the retail lending market — you’ll notice that 2 of 3 of these names were previously granted a virtual banking license.

Granting a homegrown disruptor like WeLab provides a counter-narrative that HKMA’s virtual banking license are intended for incumbents only. Both Airwallex and Neat have previously made public statements on how the felt that the framework to be restrictive.

Commenting on the WeLab’s approval Simon Loong, the Founder and CEO of WeLab, said:

“WeLab is honored to be granted a virtual banking license in Hong Kong. WeLab will fully dedicate its resources to provide seamless digital financial services built for the customer, leveraging on the proven track record, cumulative knowledge and experience over the last six years. As a Hong Kong homegrown innovator and fintech company, we believe that the license is validation and recognition of our innovative mindset and proven fintech capabilities.”

In a previous interview with Bloomberg on the sidelines of the Hong Kong Week 2018, Simon said that the introduction of virtual banking license will likely shake up the banking oligopoly in Hong Kong.