Hong Kong brokers bypass AI chatbots in favour of social media apps
Hong Kong brokers prefer to use popular messaging apps such as WhatsAapp and WeChat to stay in touch with clients, even as artificial intelligence powered chatbots are being embraced by large financial institutions, according to a survey by the Hong Kong Securities Association.
Banks such as HSBC and Standard Chartered Bank are leveraging AI-powered chatbot platforms to answer enquiries by customers, trhjoining a growing global trend which is seen as offering improved customer service and lower business costs.
Many small and medium-sized brokerages, which make up most the city’s 500 licensed securities dealers, have no intention of using the technology, the survey found.
Of the 300 brokerages polled in January and February, 81 per cent said they had no plans to introduce a chatbot, while only 8 per cent said they currently use one. About a tenth of those surveyed said they plan to adopt the technology to support their customer service initiatives.
“Most of the local brokers have fewer customers than banks. They consider it cheaper to hire staff than introducing a chatbot to serve customers,” said Gordon Tsui, deputy chairman of the Hong Kong Securities Association.
Among those who do not plan to deploy chatbots, 67 per cent cited excessive costs, while 28 per cent believe human agents could not be replaced by machines. Others cited concerns about legal issues.
Brokers however are not completely adverse to new technology. The surveyed showed 65 per cent of brokers use either WeChat or WhatsApp to communicate with customers, while 27 per cent use Facebook.
Brokers have urged the Securities and Futures Commission to amend rules such that client orders can be received by WhatsApp or WeChat. The SFC’s deputy chief executive Julia Leung last week indicated the commission would consider the request.
“It would be useful if the SFC clarify how brokers can use WhatsApp to take orders as that is a common way for us to communicate with customers,” Tsui said.
In terms of investment strategy, brokerages were found to have missed out on some of the best performers in the past year. The year’s top five best performing blue-chips were found to be completely below the investment radar of 43 per cent of the city’s brokers.
However, about 68 per cent of brokers plan to invest this year in the shares of companies affiliated to Tencent.
“Tencent’s share price has risen a lot. Investors are more interested in its spin-offs and other concept stocks,” Tsui said.
Brokers were generally supportive of Hong Kong Exchanges and Clearing’s proposed listing reform to allow companies with multiples classes of shares to list in Hong Kong from April. But association chairman Gary Cheung said he wants the exchange to add more measures to protect shareholders.
In addition, the association said it wants stricter rules that would limit the voting rights of founders and key shareholders to no more than five times normal shares, down from the current proposal of 10 times.