 Hong Kongs small and medium enterprises SMEs have emerged as a new battleground for the citys banking sector, which has been revitalised by the launch of virtual lenders that do not have any bricks-and-mortar branches.One of these new banks, Ping An OneConnect Bank, and HSBC, Hong Kongs largest bank, last week started easing the process through which SMEs can open accounts.Ping An OneConnect, which is backed by Ping An Insurance, mainland Chinas largest insurer, allowed SME owners to open corporate bank accounts within a day through its mobile app. It also promised to approve loans worth up to HK2 million US258,050 within five business days. If it misses this deadline, it will pay the company HK1,000 as cash compensation.We aim to serve the hundreds of thousands of SMEs and micro companies in Hong Kong that have long been ignored by the big banks. By adopting advanced technology, we can offer these small trading companies trade financing and other types of loans in a speedy manner, Ryan Fung Yuk-lung, Ping An OneConnects chief executive, said in an interview with the South China Morning Post.Ryan Fung Yuk-lung, the chief executive of Ping An OneConnect Bank. Photo: Jonathan Wong altRyan Fung Yuk-lung, the chief executive of Ping An OneConnect Bank. Photo: Jonathan WongThe move by Ping An OneConnect to simplify account opening and shorten loan approval processes for SMEs suggests the Hong Kong Monetary Authority HKMA, the citys de facto central bank, has succeeded in bringing new competition to Hong Kongs banking sector and revitalising it by issuing eight virtual banking licences last year. Seven of these virtual lenders have either carried out soft launches, or are fully operational.HSBC, which has been in Hong Kong for 155 years and did not opt for a virtual banking licence, and decided to upgrade its digital banking services to compete, last week started allowing small businesses to open accounts without any face-to-face meetings at a branch, or the submission of actual documents and signatures. It will take two to five days to activate such accounts. Hong Kong virtual banks tempt rate war as ZA Bank leads with juicy 6.8 per cent on depositsThe introduction of virtual banks has added competition, and will pressure traditional banks into introducing more digital services for individuals and companies, said Gordon Tsui Luen-on, chairman of the Hong Kong Securities Association.The HKMA has introduced a number of measures recently to support the citys 340,000 SMEs during Hong Kongs worst financial crisis on record, including ordering all banks to provide a six-month repayment holiday starting in May.Hong Kongs economy has been buffeted by several events over the past two years, including the US-China trade war, the citys anti-government protests and the coronavirus pandemic. Its gross domestic product shrank 8.9 per cent year on year in the first quarter, becoming the citys worst slump since records began in 1974.These virtual banks will help SMEs, as they can save them time and money, said Peter Shiu Ka-fai, a lawmaker representing the wholesale and retail sector. If they can speed up the account opening and loan approval process, and make it more secure, that would be even better, he added.Ping An OneConnect has partnered with Tradelink Electronic Commerce, a government-backed e-commerce services provider, for credit assessments. Tradelink has a lot of data for many of Hong Kongs SMEs. By accessing its database, Ping An OneConnect can assess if a SME has better sales than its peers. It can also get all information about a company quickly via electronic records. This saves it paperwork and cuts down costs by 80 per cent, as compared with traditional applications, Fung said.HSBC said its remote account opening service gives SMEs and start-ups quick and easy access to its banking services. The move showed the banks commitment to SMEs, Daniel Chan, HSBCs head of business banking in its Hong Kong commercial banking unit, said.This article originally appeared in the South China Morning Post SCMP, the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMPs Facebook and Twitter pages. Copyright 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright c 2020. South China Morning Post Publishers Ltd. All rights reserved. 