20-6-2024 (HONG KONG) WeLab, a Hong Kong-based fintech unicorn backed by billionaire Li Ka-shing, is eyeing an ambitious expansion into Southeast Asia by establishing digital banks across the region and offering its cutting-edge technology services to conglomerates in Malaysia, Vietnam, Thailand, and the Philippines.
This strategic move forms part of the company’s bold target, set last year, to amass an impressive 500 million users by 2032, according to its founder, Simon Loong.
“WeLab is actively exploring diverse opportunities in Southeast Asian markets, including applying for new licenses, forging partnerships with other companies, and exporting our technology services to enterprises,” Loong stated during a media briefing on Tuesday.
He emphasized the immense potential of the region, with its 700 million inhabitants fueling a robust demand for financial technology solutions. “We believe the expansion of our digital banking services and technology export services will be the key growth engines for WeLab,” Loong affirmed.
Last August, the start-up inked an agreement with HSBC to explore a partnership in Malaysia, opening doors for WeLab to provide its technological support to the lender’s Malaysian units.
Notably, the group’s newly launched digital bank in Indonesia, Bank Saqu, has already secured a million users since its inception in November.
Loong revealed that the group has now served 1.7 million customers across Indonesia, Hong Kong, and mainland China.
“Over 60% of Bank Saqu’s customers are individuals who are entrepreneurs. Many youngsters in those countries are engaged in part-time jobs such as food delivery, online retailing, or on-demand driving services,” Loong explained. “They require digital banking services to manage their online payments and the myriad banking transactions associated with their endeavors.”
He expressed confidence that Saqu, which translates to “pockets” in the local language, can ultimately cater to over 200 million Indonesians in the long term.
Co-founded by Loong in 2013, WeLab is a homegrown unicorn that has rapidly expanded its digital banking and online lending services in Hong Kong, mainland China, and Indonesia.
The company attracted early investment from esteemed entities like tycoon Li Ka-shing’s Tom Group, ING Bank, Sequoia Capital, and Allianz Group’s digital investment unit.
Chan Ka-keung, WeLab Bank’s chairman and Hong Kong’s former secretary for financial services and the treasury, hailed WeLab’s success as a testament to the city’s fintech development.
“Hong Kong was the first to introduce digital banking in Asia. The successful launch of the eight virtual banks in the city has now led other Southeast Asian countries to plan to issue digital banking licenses of their own,” Chan remarked.
The Hong Kong Monetary Authority issued eight virtual bank licenses in 2019 to foster innovation and competition within the industry. These virtual banks, which started operating the following year and are not permitted to have physical branches, collectively amassed 2.2 million customers last year, a 20% increase from 2022, according to the HKMA. The authority plans to rebrand virtual banks as “licensed digital banks” to bolster public confidence.
“Hong Kong’s success in promoting fintech and digital banking can be attributed to the collaborative efforts of our government, regulators, and industry players in introducing new policies to nurture the sector,” Chan asserted.
WeLab had initially applied to list its shares in Hong Kong in July 2018 but subsequently shelved the plan due to market volatility. Loong currently has no immediate intentions to revisit the idea.
“We want to wait until the initial public offering markets improve further, and we also want WeLab to grow further before we will consider it,” he said.
