Beijing-based fintech firm 9F Group hopes to deploy its big data credit model in the Hong Kong market by obtaining one of the first set of virtual banking licenses for the city.
9F has teamed up with Hong Kong-listed fintech company VST ECS and an unnamed international partner to apply for the virtual banking license, as well as appointed veteran Hong Kong banker Patrick Ip Koon-tung as manager of both international and virtual banking operations.
Samuel Lin Yanjun, 9F Group CFO and chief executive of international business, said that the company plans to expand its operations into overseas markets via acquisitions in Hong Kong.
“We would like to use Hong Kong as a platform for 9F Group to expand internationally,” said Lin to The South China Morning Post. “This is why we have taken over Primasia Securities Asia, a Hong Kong securities firm, and Yue Tung Wealth Management, an insurance broker in the past two years.
“Now we want to get a virtual banking license…we believe this is a good time to start a virtual bank [and] plan to invest about HKD$1 billion in this joint venture.”
The Hong Kong Monetary Authority has received 29 applications for the first group of virtual banking licenses, with no word yet however on the final number of licenses that its plans to release.
9F plans to use the virtual bank to provide loans of around HKD$50,000 on average to small and medium-sized companies as well as tech-savvy consumers making lifestyle purchases.
Established in 2006 in Beijing by pioneering fintech entrepreneur Sun Lei, 9G has over 63 million users of which more than 8 million are situated in the Greater Bay Area of southern China.
The company already uses big data and its own credit scoring model to identify mid-tier customers in mainland China that are low risk yet unable to obtain credit from traditional banks, before providing loans to them in conjunction with lifestyle shops and hospitals.