Saudi Press

Saudi Arabia and the world
Thursday, Oct 02, 2025

UBS seeks China digital bank licence as part of plan to turbocharge growth and slash costs

UBS sees mainland China’s digital bank rules in place by June or July. The Swiss lender is targeting 200,000 wealthy clients within two years after securing a digital bank licence

Swiss bank UBS aims to create a digital banking platform that could slash costs and spur growth, but its plan hinges on securing a licence in mainland China to kick-start the project.

Edmund Koh, who heads UBS in the Asia-Pacific region, sees China’s framework digital banking rules in place by June or July. At which point, he hopes that the lender’s application for a nationwide, majority-owned digital bank licence will gain traction.

If UBS succeeds, it will join the likes of Tencent Holdings’ and Alibaba Group Holding’s banking affiliates in providing low-cost financial services online across China, where two new billionaires emerge every week.

“We need scale, and I’m going to get that scale for UBS, working together with the Chinese authorities,” said Koh, who plans to incubate the platform in China, then take it global.

Private banking has been one of the more profitable areas of financial services in recent years, but cost-to-income ratios across the industry have remained stubbornly high, at about 70 per cent to 80 per cent. Digital banks, offering lower-margin products without the expense of maintaining branches, combined with the potential to scale, provide an attractive solution.

Koh estimated it costs roughly US$25,000 to acquire a wealth-management client, which UBS could slash down to as little as US$60 via a digital bank. He has a stretch goal in mind of expanding UBS’s 30,000 customer base in Asia to 200,000 within two years, once he has secured the digital banking licence in mainland China.

China’s regulators are now working on guidelines for a further batch of digital-banking applications from domestic and overseas firms present in China. The country’s regulations for its rapidly evolving digitising financial markets are gradually coalescing. New rules are likely to be stricter than previous iterations, requiring higher reporting standards, capital requirements and clarified regulatory reporting lines. The cost of running a digital financial operation is likely to rise as a result, said industry sources.

China has granted 18 licences for privately run banks since 2014, including those to Tencent-backed WeBank, Alibaba’s affiliate MYbank and aiBank, whose investors include Baidu. These are online-only banks and the new digital banking rules will govern them as well.

China has gradually been opening up to foreign financial institutions, which have ranged from asset managers to insurers. Other global wealth managers are expanding in China too, including BlackRock and French asset manager Amundi, but they plan to sell their products through the distribution networks of Chinese commercial banks.

If a foreign bank is granted a digital banking licence the potential is huge, but they would be competing against formidable technology-enabled incumbents offering a slick user experience. “Digital banks would need to have a superior experience to win the hearts of China’s young customers,” said Alan Zhang at consultancy Accenture. Apart from a silky smooth customer journey, any digital bank in China would need to be data-driven with a modern core-banking system, enabling it to respond swiftly to fast-changing consumer behaviour and appetite for financial services in China, he said.

However, not all can afford to seize this opportunity, as they grapple with soaring bad loans in their home markets.

“A lot of big banks are looking inward to support their core domestic business right now,” said Koh, who is Singaporean. He feels exceptionally well placed among his peers to build on the bank’s growth in China after a record-breaking first quarter in the Asia-Pacific region.

On Koh’s watch, Asia-Pacific contributed 31 per cent of group pre-tax earnings in the first quarter, higher than the roughly 18 per cent to 22 per cent split across recent years. Pre-tax profits in the region hit about US$800 million in the first quarter, up 154 per cent year on year, as its rich clients shuffled their portfolios as the coronavirus pandemic knocked global markets, Koh said.

China is the right place to develop a digital bank platform, he reckons, as the country’s expertise in artificial intelligence (AI) combined with its troves of data are rapidly transforming financial services and risk management.

Once UBS has secured a digital banking licence in China and built its platform employing AI specialists, Koh plans to export the model overseas to other markets with widely dispersed mass affluent populations and rational competition.

To be sure, UBS already has a universal banking model in place in Switzerland, with an online digital platform. But in Asia, UBS has not pursued a mass affluent client base. It plans to serve China’s booming middle class with US$100,000 to US$200,000 to put in the bank, offering them initially a smorgasbord of Chinese securities and mutual funds.

The pilot digital bank will be based in Qianhai, focused initially on the dynamic Greater Bay Area with its population of more than 69 million people and a GDP of about US$1.5 trillion. Its ideal customers will be young entrepreneurs who are reinvesting wealth in their fast-growing businesses, but still want to diversify their savings. In some ways, it would be a digital extension of UBS’s bricks-and-mortar branch in Kowloon, Hong Kong, which caters to local entrepreneurs with businesses in mainland China.

As the nest eggs of China’s mass affluent population grow and they need more tailored advice, Koh sees them transferring to UBS (China) for face-to-face wealth management advice in areas such as succession planning. The Beijing-headquartered business is expanding its suite of product licences.

“Today’s affluent in China will be tomorrow’s high-net-worth individuals and then billionaires,” Koh said.



Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×