Hong Kong residents may soon be able to open mainland bank accounts remotely, following in-depth talks between financial authorities on both sides of the border.
“It would make their lives easier if they opt for living or retiring in the mainland such as in the Greater Bay Area,” said Norman Chan Tak-lam, chief executive of Hong Kong Monetary Authority on a sidelines of the Treasury Markets Summit 2018 in Hong Kong on Friday, attended by hundreds of bankers.
He said the opportunity has only become possible through advances in technology, such as facial recognition or other biometric methods to identify customers online, without the need for them to visit a mainland bank to open an account.
Talks are now focused on officials sorting out differences in the two regulatory systems involved, and the flow of funds between accounts on either side.
Initially customers are likely to be able to move small amounts of cash, using e-wallets provided by such operators as Alipay or WeChat Pay.
“We may implement these projects in the Greater Bay Area first,” he said but did not give any timelines.
The Greater Bay area refers to the joint economic cluster of 11 cities in southern China, including Macau and Hong Kong.
The US Federal Reserve is highly likely to increase interest rates by 25 basis points next Thursday, and the HKMA would need to follow suit, under the Hong Kong dollar’s peg to the US dollar, meaning a first rise in Hong Kong for 12 years.
Norman Chan said Hong Kong’s banking system could cope with any rise, and the threats posed to the city of an escalation in the trade war between the US and China.
But he conceded the impact of the trade war may be reflected in the local [Hong Kong] economy over the next two quarters.
“The US interest-rate-rise cycle is ongoing and Hong Kong has to follow,” he said.
“However, it should be noted US$130 billion in capital has flowed into Hong Kong since 2008, and the outflow has been around 10 per cent of that value, so Hong Kong’s banking system is still very liquid.”
He also told the forum he does not agree cryptocurrencies such as bitcoin will become more commonly used.
“Bitcoin and its peers are not qualified to be called ‘currencies’ as they are volatile and have high costs involved. They are traded on unregulated platforms which have been easily manipulated,” he said.
“Investors should beware of the high risks in such trading.”
Chan, who turns 64-years-old next month, is due to retire from his five-year HKMA term next September, but Financial Secretary Paul Chan Mo-po also suggested at another event in Vietnam on Friday, that appointment might be extended, adding he was “open-minded” about the HKMA boss’s future.
Norman Chan refused to comment.