Digital Banking: Swiss Financial Giant UBS has Applied for a Virtual Bank License in Mainland China

by swisschambei in Bank / Finance / Insurance

Switzerland-based UBS Group AG, a global investment bank and financial services firm with around USD 1 trillion in assets, recently confirmed that it is planning to launch a digital banking platform that would reduce operational costs and stimulate growth. However, UBS said its plan depends on whether or not it can secure a digital bank license in mainland China. Edmund Koh, head of UBS’ Asia-Pacific division, says China’s framework digital banking guidelines should be available by June or July of this year. As reported by the SCMP, Koh is hoping that UBS’ virtual bank application (for a countrywide, majority-owned digital bank license) will be approved or at least move forward in some way. If UBS’ application is successful, then it will be joining Chinese tech giant Tencent Holdings’ and Alibaba Group Holding’s banking units in offering cost-effective digital financial services throughout China. Koh, who is planning to incubate the initiative in China and then launch globally, remarked “We need scale, and I’m going to get that scale for UBS, working together with the Chinese authorities.” Private banking has been a highly profitable sector of the financial services industry; however, cost-to-income ratios continue to remain relatively high (around 70-80%) as well.

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