HSBC launches e-banking in China

HONG KONG: Global banking group HSBC, Hang Seng Bank and Bank of East Asia have become the first foreign lenders to launch online banking in China. HSBC and Bank of East Asia, Hong Kong's fifth largest lender, started offering the Internet banking service on Monday, while Hang Seng Bank launched its service on December 31.

Foreign banks are keen to tap the fast-growing China market and the estimated US$1 trillion in savings held there. Developing online banking services is far cheaper than building extensive branch networks to compete with long established mainland banks.

"This new service removes time and geographical constraints on banking transactions, allowing Bank of East Asia customers to access their bank accounts and other banking services anytime, anywhere," the bank said in a statement late on Monday.

Bank of East Asia, the first overseas bank to receive online-banking licence from Beijing, said its customers can transfer funds, make account enquiries, check interest and foreign exchange rates and send remittance instructions.

HSBC and its 62 percent held Hang Seng Bank provide similar services to their customers. "The launch of Internet banking service here has opened a new chapter for HSBC's personal financial services in mainland China," said HSBC China business head Dicky Yip.

China keeps tight curbs on foreign bank operations though it has promised to slowly open its financial sector by 2007. Some mainland Chinese lenders already offer online services. Hong Kong banks are eagerly eyeing China for long-term expansion to offset shrinking loan growth at home, where the economy is struggling to emerge from recession and deflation.

London-based Standard Chartered Bank has also received approval from China to launch online banking service, but it is not clear when the emerging market specialist would offer such service.

© Reuters