Hong Kong banks: years behind in digital transformation
In Hong Kong if you go to your bank and ask to open an account, you will be asked to fill in a multi-page paper form. If you are already an existing customer and you ask to open a fixed deposit account and request that it be tied to your savings account, you will be asked to fill in another form. In both instances, the bank clerk will also scan a copy of your Hong Kong ID even though you may have been banking with them for many years.
What’s wrong with this picture?
The reality is that for all the talks about digital transformation, many banks in Hong Kong are straddled with manual processes that go against the very grain of the digital transformation phenomenon we are witnessing not just in Hong Kong but elsewhere around the world.
Are banks in Hong Kong merely playing lip service to the digital transformation movement? Is this “lip service” exclusive to pragmatic business leaders juggling between reigning in costs and complying with evolving regulation?
Hardly! An Accenture study of European banks and insurance companies revealed that despite 86% of surveyed institutions already including digital as part of their strategy, and 63% having hired a “chief digital officer” only 37% have earmarked budget specifically for digital transformation.
The report “European Financial Services Digital Readiness Report” found that banks and insurers across France, Germany, Italy, Spain and the UK an average of 3.15 (one for basic level and four for best practice) when it came to recognizing the importance of digital. However when it came to implementing their digital vision only 2.10 were using digital solutions to streamline activities.
Egidio Zarrella, Asia Pacific Head of Banking and Capital Markets at KPMG, is critical of the way financial institutions in Hong Kong continue to drag their feet when it comes to transforming manual processes to reflect the digital aspirations of their customers.
Zarella says a lot of processes are very manual. “I would do everything my bank would want me to do if I could do it digitally but we are not there yet! China is really driving ahead as the Chinese consumer buys more and more via mobile and social channels like WeChat,” he added,
In this exclusive interview with Fintech Innovation, Zarrella discusses the issues surrounding digital transformation, big data, analytics-driven insights, and what Hong Kong needs to do to go from digital laggard to truly capitalizing on its reputation as a financial center to the world.
Hong Kong’s financial services industry would do well to learn from how China is pushing forward with its digital agenda.