China Merchants Bank Co. Ltd. (CMB) and one of its Hong Kong subsidiaries have won initial approval to conduct product trials as part of a cross-border fintech pilot program in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
An artificial intelligence-backed identity verification tool developed by CMB and CMB Wing Lung Bank Ltd. will be used when the latter’s Chinese mainland customers open a Hong Kong-dollar account on its app, according to a product description released by the Shenzhen branch of the People’s Bank of China (PBOC).
The tool is expected to help lower the cost of identity verification, the description said. The banks proposed testing should involve at most 100 customers.
The GBA fintech pilot program, initiated by the PBOC and the Hong Kong Monetary Authority (HKMA) last year, aims to link the central bank’s Fintech Innovation Regulatory Facility with the HKMA’s Fintech Supervisory Sandbox, according to an HKMA press release.
The initiative will “promote financial technology innovation cooperation, enhance the quality and efficiency of financial services in the GBA, and strengthen financial support for the development of the GBA in an orderly fashion,” the press release said.
On Feb. 18, the PBOC’s Guangzhou and Shenzhen branches and the HKMA began accepting applications from licensed financial institutions and technology companies, according to official notices. According to the rules, technology firms must partner with a financial institution in order to participate.
Fintech regulation is part of the country’s two fintech development plans announced in August 2019 and early January this year.
A fintech regulatory sandbox was launched in Beijing in December 2019 and allowed fintech innovation to take place in a smaller environment separate from the wider financial system in an effort to control risks. The initiative has since been extended to Shanghai, Chongqing, Shenzhen, Hangzhou, Suzhou, and the Xiong’an New Area, a new economic zone in North China’s Hebei province.
Read more China Unveils Detailed Roadmap for Greater Bay Area
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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