SHENZHEN - Webank, China's first Internet-based bank opened on Sunday, fueling hopes that the new lender will shake up the banking sector.

Based in the southern city of Shenzhen, Webank, which has registered capital of 3 million yuan ($482,276), is the first to launch after a pilot program to nurture private lenders in the state-dominated banking sector. Another four private lenders were also approved through the scheme.

Tencent, which operates the popular messaging apps WeChat and QQ, holds a 30 percent majority stake in the new lender, will drive the bank's efforts to enhance banking access.

Sunday's opening only marks the start of a "test run", said sources at the bank, as currently it can only open accounts for shareholders and employees. The official launch is slated for the end of the first quarter this year.

New kid on the block

Analysts say the new bank will likely find itself increasingly at odds with existing rules used to regulate bricks-and-mortar lenders, underscoring an urgency for regulators to accommodate changes in a sector already grappling with the impact of the Internet age.

Over the past two years, wealth management products marketed by Internet firms have been chipping away at bank's deposit bases, with peer to peer (P2P) lending firms responding to the financing needs of individual and small firms long ignored by large banks.

Online identification

As Webank is an online service, there is no need for traditional face-to-face interaction when opening an account, instead it will use facial recognition technology as an alternative way of verifying identification.

However, existing regulation states that bank accounts in China may only be opened with the traditional identification system. If Webank wants to use face recognition technology, it must garner approval from regulators.

The good news for Webank is that there are signs of approval, with the central bank already soliciting opinions on a draft rule on remote account opening.

Guo Tianyong, a finance professor with the Beijing-based Central University of Finance and Economics, said alternative identification verification could be used as long as they were secure.