In Focus
RETAIL BANKING | Frances Gagua, Hong Kong

Hong Kong's only homegrown virtual bank wins big by leveraging data

WeLab Bank achieved 10,000 sign-ups just 10 days after launch.

WeLab Bank believes that it’s parent company’s seven-year head start in the online financial services space—and in leveraging data analytics—puts it at an advantage in meeting Hong Kong banking customers’ needs.

Just 10 days after it publicly launched in July, it has immediately amassed 10,000 customers. Two months later they already count 20,000 uses in their debit card. Though impressive, the statistics came as no surprise to WeLab: they consider themselves masters at moving quickly and efficiently, according to Adrian Tse, Chief Executive of WeLab Bank.

More than that, they immediately respond to their customers’ needs.

“We conducted multiple user research studies long before we have launched,” Tse told Asian Banking & Finance in an exclusive interview. “For example, we came up with GoSave because users have expressed their difficulties from participating in the incumbents banks' deposit offers. They are not able to withdraw their money before the maturity date, and if they choose to do so, they will be penalized for their actions.”

One of the two unique products that WeLab Bank introduced upon launch, GoSave is a time-deposit product that “harnesses the power of the community,” Tse said. “More people joining GoSave means a higher interest rate. We added the “minibus” element, which has personal connections with our users, to make the experience more memorable.”

What makes it better is that you can enter the GoSave service for as little as HK$10 (US$1.3). Customers can also pull out their money at any given period without any penalties.

The bank is also quick to embark on partnerships in order to meet customers' needs. Recently, they partnered with online food ordering service OpenRice upon noticing that 70% of the transactions in their debit card are online orders for food.

“This is exactly what makes us different from the others: that is, our ability to leverage technology. In all these, technology helps us collect the data and also allows us to build and promote other offerings to our customers,” said Tse.

What was the idea behind the name “WeLab”? How does the name of your bank represent how you want to position yourself amongst customers and the industry?
Lab basically stands for "laboratory” where scientists conduct their experiments and projects. It represents our goal to do different “experiments” to help customers take control of their financial journey, so that they can have fun while growing their money. What we are doing is leveraging technology to redesign a solution that is suitable for the customers during their financial journey.

Whilst we started our journey in consumer lending in Hong Kong, and eventually expanded to China and Indonesia, our ambitions did not stop here. WeLab wants to open up additional channels to extend a broader range of financial services. When the Hong Kong Monetary Authority (HKMA), the regulator, decided to give out eight virtual bank licenses last year, we think this would be a good time to move into the banking territory because [what virtual banking represents] is exactly our objective when we leverage technology in our financial services: that is, to bring a very different banking experience to customers in Hong Kong. In the end we were fortunate to get one of the licenses, and we continue to bring joy to our customers through innovative products.

Can you tell us more about the founders of the bank? What inspired them to launch WeLab?
The founder is Mr. Simon Loong, who is also our Group CEO. He's been in banking for over 15 years and is very experienced in the field. I worked with Simon back in Standard Chartered, where we got first-hand experience on how traditional banking is fulfilling people's banking needs. We saw that the products that’s been offered by incumbents are unable to serve everyone’s needs, where it is our believe that everyone should have simple and equal access to credit.

Simon then started WeLab Group, where we leveraged big-data powered technology and our know-how in risk management to revolutionize lending: by delivering seamless, purely online lending experiences accessible 24/7 to underserved consumers.

What are your thoughts in being one of Hong Kong's newest virtual-only banks?
The online business model is in our DNA. We are very well positioned to demonstrate a very different banking experience to Hong Kong customers and some of the specific characteristics that we have will allow us to deliver this experience.

As Hong Kong’s only homegrown virtual bank, we have a very deep understanding of what types of financial products Hong Kong customers need. We are wholly owned by the WeLab Group who has a seven years track record of delivering online financial services. As of today, we've hit 46 million individual customers.

As for how and why we grooved with 46 million customers: we have a startup mentality and we move very quickly. Launching WeLab Bank is an example. We got the license last April and then under just about 400 days, we have already launched the bank. The bank was launched in late July, and within 10 days we have already accumulated 10,000 customer applications, which is very exciting for us. That's how quickly we move things.

How has WeLab Bank been received by the public as far?
We launched in late July and in just less than 2 months, we have shown some good results. More than 60% of our customers have used two or more of our product or services. As of interview, we have over 10,000 of GoSave transactions and also over 20,000 transactions on our WeLab  Debit Card, and they continue to grow on a daily basis. We were happy that  our customers come back and use it repeatedly, showing strong interest to use our products. We hope to bring further innovation to the market in the coming years to come.

Tell us more about your other services.
We have another product, the WeLab Debit Card, which is a tap-and-go card that is the first numberless card publicly launched in the market. With the debit card, you will not overspend because you can only spend the balance that is in the account.
Also, when we did our survey and talked to customers, they told us that they want to make sure the card is  secure and private. The concept of a numberless card is that even if someone picked up the card or whilst the card is being given to someone in the restaurant to get the bill, nobody can get your personal details or card numbers.

To complement the physical card, we have a virtual card in the app as well. When our customers download the app, when they've successfully open an account, they can go online and do their online shopping immediately.

What is your outlook for Hong Kong’s virtual banks?
I think these are very exciting times. From a market perspective, Hong Kong's banking sector is huge. It has an annual income of about US$51b and we think there is room for virtual banks to take a piece of the market share.

Customers have also shown their enthusiasm in trying out virtual banks, as seen in how we achieved 10,000 customers in less than 10 days.

What we also observed during the COVID-19 pandemic period is that people are willing to do things on the phone or online. In fact, they are trying to avoid going to branches or leaving their homes. This is how the pandemic has become an enabler or a catalyst for people to try and use virtual banking services. With more innovation coming to the market, I think the outlook for virtual banks in Hong Kong will be very exciting.

What’s next for WeLab Bank?
We have a strong product roadmap and will roll out features in the coming months. All of our features will be customer centric with the goal to help them manage, grow, and save their wealth.

Interestingly, when looking at our customer demographics after launch, we found out that 30% of our customers are aged 40 and above. This was a pleasant surprise since we thought the majority of our customers will be in the younger generation. This shows that age is not a limit for being tech savvy.

As we continue to build innovative products, we will continue to leverage big data analysis to better understand our customers, so that we can provide a tailor-made and diversified portfolio of products to better help them reach their goals.

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