May 14, 2019
Latham & Watkins has advised Insight Fintech HK Limited (“IFHK”), a subsidiary of Xiaomi Corporation (“Xiaomi”), on its successful application to the Hong Kong Monetary Authority (“HKMA”) for a virtual banking licence under Hong Kong’s new virtual banking regime.
IFHK is targeting to launch its services in around six months. During the initial phase of its operations, IFHK will focus on the integration of fintech into traditional banking services, leveraging cutting-edge technologies such as artificial intelligence (“AI”), big data, cloud computing and blockchain to enhance customers’ experience. IFHK will deliver seamless financing services for the entire supply chain, including upstream and downstream suppliers and customers of the Xiaomi Group. The minority shareholder in IFHK, Hong Kong-based AMTD Group, will share its in-depth knowledge in serving the Hong Kong financial services sector and add value to this state of the art platform with its local expertise.
IFHK is one of eight companies to have been granted a banking licence from the HKMA under the new virtual banking regime, which forms part of the HKMA’s Smart Banking Initiatives that were first announced in September 2017. In addition to the promotion of virtual banking, the Smart Banking initiatives include a framework for open banking, a faster payments system, an enhanced fintech sandbox and closer cross-border regulatory collaboration on fintech development.
The Latham & Watkins team was led by Hong Kong partner Cathy Yeung and counsel Simon Hawkins, with associate Kenneth Hui.
Cathy Yeung, Global Vice Chair of Latham & Watkins’ Capital Markets Practice and Chair of the firm’s Greater China Practice, commented: “We are delighted to have advised IFHK on this exciting and innovative project. We are now looking forward to seeing the new, cutting edge services that IFHK will provide when it launches later this year.”
Simon Hawkins, counsel in the firm’s Financial Regulatory Practice in Hong Kong, added: “The new virtual banking regime is a testament to HKMA’s continued focus on fintech development, as part of its smart banking initiatives. It is encouraging to see the HKMA and other regulators in Hong Kong embracing new technology and adapting regulation to facilitate fintech innovation.”