Although traditional banks remain the preferred choice, 1 in 5 are ready to jump ship to another provider.
About 1 in 4 Hong Kong consumers will prefer to apply for a new digital loan with a fintech or virtual bank, according to a survey by TransUnion.
In a survey of 973 adult Hong Kong consumers between 10 to 19 July, over 1 in 2 or 56% of respondents hold a fintech or virtual bank loan or credit cards. The figure is expected to rise further, as 64% of the respondents indicated plans to engage with fintech firms or virtual banks for credit activities in the coming years.
Traditional banks continue to dominate the credit market, with 29% of respondents selecting their existing bank where they have an account as their preferred option for a digital loan application. However, 22% said that they are ready to jump ship, saying that they are open to other traditional banks or financial institutions as their preferred option to get a loan.
A separate study by TransUnion noted that Gen Z are the ones driving the rise of virtual banking and fintech adoption. The studies revealed that Gen Z borrowers accounted for 22% of personal loan originations from virtual banks.
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This younger demographic has become a key target for virtual banks, as evidenced by the fact that 30% of all unsecured revolving lines originated by virtual banks in 2022 were allocated to Gen Z consumers, TransUnion noted.
Across generations, 43% of Gen Z planned to apply for new credit or refinance existing credit in the next year – the highest percentage among age groups.
“Current consumer behavior, especially Gen Z, has been shaped by the digital age, shifting financial landscapes, and the global pandemic. As technology continues to reshape the way we approach financial services, it is clear that FinTech and virtual banks are playing a vital role in driving financial inclusion and meeting the evolving needs of consumers in Hong Kong,” said Wingo Wong, managing director of TransUnion Credit Information Services Limited.
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