Xiaomi-backed Airstar virtual bank pilots its service in Hong Kong

Airstar Bank is a joint venture between Chinese electronics company Xiaomi and AMTD Group – Asia’s most extensive independent corporate finance and advisory house. It was among the eight firms to receive a virtual bank license from HKMA in 2019 and is the second to launch trials, following ZA Bank. It is expected to begin operations in July 2020 officially.

As a part of this pilot project, the company will be onboarding around 2,000 users on the platform, which will be employees of Airstar, Xiaomi Hong Kong and AMTD Group as well as their friends and family members. This will help the company gather user feedback and gauge requirements ahead of a full roll-out.

Airstar will be offering tiered-pricing savings deposits with an interest rate of up to 1% per annum for deposits between HK$500,000 and HK$1 million. Customers also have the flexibility right to customize the time deposit maturity dates, such as an 8-day, 19-day or 27-day time deposit. They can also terminate the time deposit anytime before maturity without any penalty or surcharge.

Unsecured lending products will also be available to customers with transparent pricing, and the interest will accrue daily. The company says that customers can repay in advance without paying any handling fees.

Commenting on this development, Airstar’s spokesperson said, “Airstar strives to embrace innovation and financial inclusion, and promotes ‘Financial Innovation for Everyone.’ We genuinely believe Airstar will be a valuable contributor to the banking industry in Hong Kong and become ‘Everyone’s Bank.’”

Why this matters: As best known as the world’s fourth-largest smartphone brand, Xiaomi has made its fintech ambitions very clear. The virtual bank is a JV with AMTD Group, Asia’s most prominent independent investment banking firm, and Xiaomi still owns 90% of the shares, which is.

Xiaomi’s ambitions to leverage its foothold in IoT; its platform is connected to 151 million mobile active devices, which it says is the largest in the world and broaden its existing fintech offering in China and above.

Details: The pilot allows 2,000 workers from Airstar, Xiaomi, and AMTD Group and also their friends and relatives to try out (in the Chinese) virtual banking devices and give feedback on them.

Airstar presents itself also as a zero service fee retail business. Hong Kong residents can as well create an account within five minutes with no minimum deposit required of it.
Airstar will start with two products. One which offers an interest rate of up to 1% per annum for saving deposits between HK$500,000 and HK$1 million. It also protects deposits up to a maximum amount of HK$500,000 amount.
Customers can as well place savings in time deposits and choose their deposit maturity dates by themselves, such as eight, 19, or 27-day time deposits. They can also settle fixed-term deposits at any moment in advance without charge to it. 
Unsecured lending products will be available to customers with transparent pricing as well. Interest will accrue daily. The loan price is transparent; the interest rate charges compounded daily. Customers can repay in advance without paying for handling fees. 
Airstar Bank is set to begin operations any time in July 2020, as the case may be. 

The HKMA has issued eight virtual banking licenses to companies, which include Ant Financial, Tencent, JD.com and as well insurance giant Ping An earlier on. 
AMTD is planning an official public offering of its digital asset for later this year. It wants to serve retail banking customers and small and medium enterprises in the broader Asia region and is currently competing for licenses in other jurisdictions. 

 

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