The launch of Internet banking and impending inauguration of virtual banks has failed to ignite interest from customers, leaving banks to feel the pinch of heavy investments made in the past few years.
Most Hong Kong banks have been providing basic Internet services such as balance enquiry, bill payment and third-party transfer for some time but have received lukewarm customer response, analysts say.
The high cost of implementing the new technology aggravates the situation, harming the bottom lines and stock prices of most banks.
Analysts last week warned that, as a result of cutthroat competition, banks would have to provide more facilities to customers to survive.
A Lehman Brothers report said HSBC last year spent an estimated HK$13.3 billion on information technology (IT), which constituted 15 per cent of operating expenses. This year, IT expenses would constitute 20 per cent of operating expenses.
Bank of East Asia (BEA), which launched its online services in September last year, spent an estimated HK$100 million to HK$120 million on IT last year and HK$25 million on promotions.
