Tiered Account Services: A New Initiative on Promoting Financial Inclusion


12 Apr 2019

Tiered Account Services: A New Initiative on Promoting Financial Inclusion


Basic banking services are indispensable to businesses and the general public.  In view of this, the HKMA has been encouraging the banking industry to put the spirit of financial inclusion into practice when developing their businesses.  In particular, the HKMA has embarked on various initiatives, including issuing a circular to all banks in Hong Kong in September 2016 reminding them to be mindful of the needs of bona fide businesses for basic banking services and to adopt a risk-based approach when processing account opening applications.  Further, a dedicated team was set up by the HKMA in March 2017 to handle public enquiries about opening of bank accounts.  Our efforts are bearing fruit, with improvement seen in the situation of account opening for businesses.

Let’s first take a look at the numbers.  The retail banking sector in Hong Kong opens an average of some 10,000 new business accounts per month, of which 60-70% are for small- and medium-sized enterprises (SMEs) and start-up companies.  On average, about 2,000 non-local SMEs and start-up companies open business accounts every month.  The unsuccessful rate of account opening applications has also dropped from 10% in early 2016 to around 5% currently.  Since its inception two years ago, the HKMA’s dedicated team has handled more than 580 enquiries and comments from the public.

While the situation has improved, we note from our exchanges with various stakeholders that in fact, some businesses (e.g. start-up companies, overseas companies which are seeking to establish a presence in Hong Kong, and some SMEs) may not require the full range of banking services offered by traditional bank accounts, particularly at the initial stage.  This gives rise to the question of whether there is room to streamline the customer due diligence (CDD) measures at account opening for companies which only require some basic banking services, and whether doing so would help enhance accessibility of banking services and improve customer experience.

With the concerted efforts of the HKMA and the banking industry, tiered account services that aim to enhance customer experience – “Simple Bank Accounts” (or “SBAs”) – have been launched to provide an additional option for business customers which require only basic banking services.  SBAs are in essence a tier of accounts derived from traditional accounts focusing on provision of basic banking services such as deposits, withdrawals, local and cross-border remittances, etc.  With narrower service scope and transaction volume compared to traditional accounts, the risks involved in SBAs would be relatively lower and hence less extensive CDD measures required, e.g., banks may require less detailed information and supporting documents from applicants.

While SBAs offer more streamlined CDD measures, it may not be applicable to some companies, especially offshore companies with complex structure.  Besides, all applicants would still need to provide information and documents required by banks for account opening.  Individual banks may design their own SBAs based on their business strategies and risk assessments.  As such, the scope of services of SBAs offered and the extent of CDD measures implemented by individual banks may vary.  Customers looking for a wider range of banking services in the future may “upgrade” their SBAs to traditional accounts by completing the necessary CDD processes as required.

SBAs offer an additional account option for bank customers while addressing the needs of corporate customers at different stages.  We are pleased that all three note-issuing banks in Hong Kong have launched the SBAs service, and we look forward to more banks coming on board to help further promote financial inclusion in Hong Kong.

Arthur Yuen
Deputy Chief Executive
Hong Kong Monetary Authority

12 April 2019

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Last revision date : 12 April 2019