The Chatroom will provide speedy and timely feedback when new technology or solution is being contemplated, thereby reducing the risk of abortive work by the parties concerned and expediting the rollout of new fintech applications. Second, tech firms may have direct access to the Sandbox. Tech firms may test out their innovation by seeking feedback from the Chatroom without necessarily going through a bank. Third, we understand that our fellow regulators in Hong Kong, the Securities and Futures Commission (SFC) and the Insurance Authority (IA), will shortly be launching their own sandboxes. Following discussion among the HKMA, SFC and IA, we have agreed to link up the three sandboxes through a common interface so that there can be a single point of access by the stakeholders for fintech solutions covering more than one sector. (C)  Facilitating Virtual Banking  We believe that the time is ripe for Hong Kong to try out virtual banks. In some jurisdictions, it has proved to be technically feasible and commercially viable for virtual or branchless banks to operate. A virtual bank operates on a different model of service delivery and may help promote financial inclusion as they normally target small customers, be they individuals or SMEs. Our view is that the emergence of virtual banks in Hong Kong would also provide additional impetus to the application of fintech in Hong Kong and offer a new kind of customer experience in mobile and digital banking.
On the other hand, banks need to appreciate and accept that they must revamp the way they offer financial services to their customers. It is true that, compared with unregulated entities, there is a high degree of public trust in banks, but customers now demand much faster and convenient services, not just in payments but also over a wide range of financial services, many of which are now made possible by the advancement in technology. Banks must become more “customer-centric” by offering highly personalised services to meet what the customers actually want rather than pushing out products or services that the firms think the customers should have. So what does it mean on the ground? I believe that in a couple of years’ time, there will be a high degree of convergence in the way in which banks and tech firms conduct their businesses and compete in the arena of finance. This means that the landscape of banking and finance will undergo a profound change during this process of convergence between banking and technology. So how does Hong Kong move from here to there and what role will the HKMA, as 1/6  BIS central bankers' speeches  bank supervisor, play in preparing the banking sector for the change? First of all, let’s take stock of where we stand at present on electronic or digital banking. Hong Kong is the premier international financial centre in Asia, and has been at the forefront of smart banking in terms of digital or internet banking.