Standard Chartered to plough more cash into digital banking, says Hong Kong chief

The lender spent US$400 million last year on developing fintech services – and there’s more to come, says Hong Kong CEO Mary Huen Wai-yi

PUBLISHED : Monday, 05 March, 2018, 7:02am
UPDATED : Monday, 05 March, 2018, 7:02am

Standard Chartered Bank, which invested US$400 million in its digital banking operations globally in 2017, will pour more money into developing fintech services in the coming year, according to its boss in Hong Kong.

Mary Huen Wai-yi, the lender’s chief executive in Hong Kong, said the amount invested last year represented almost a third of what the group spent on systems enhancements, regulatory compliance and strategy.

Global cash investment by Standard Chartered Bank – mainly in emerging markets – has been rising in recent years. The total stood at US$1.4 billion in 2016, up from US$900 million in 2015.

“Our investment in digital banking and other fintech services represents a big portion of our total cash investment. This shows Standard Chartered Bank is willing to spend to invest in technology and infrastructure to meet the needs of tech-savvy customers,” Huen said.

HKMA sets out seven initiatives in effort to bolster fintech

The bank’s investment in new technology and fintech services came as Hong Kong Monetary Authority last year announced a range of measures to encourage local lenders to further develop technologies that allow customers to enjoy more efficient banking services via the internet or their mobile phones.

The lender is in a strong position to support such sizeable investment. Last Tuesday Standard Chartered said it would issue a dividend to shareholders for the first time since 2015, as it announced pre-tax profit had risen 175 per cent in 2017 to US$3 billion.

Huen said the bank has a lot of plans in the pipeline. Last year it announced the introduction of a chatbot which uses artificial intelligence to answer customers’ questions, as well as the launch of several mobile payment services.

It has also allowed customers to apply for new credit cards or bank loans online without having to visit a bank branch. Huen hopes to expand this service to allow customers to apply to open savings accounts online in the second quarter.

“We found customers responded very positively to digital banking services. We would like to add more fintech services that would make it easier and faster to access while at the same time making sure customers feel safe to use these online banking services,” she said.

Plenty of chatter, and even some action, as Hong Kong makes progress on fintech

HKMA is in the process of consulting the market about issuing virtual bank licences which would allow lenders to operate purely online with no physical branches. The authority has indicated that traditional banks and technology companies could both apply for the licences.  

Huen said Standard Chartered has not decided if it would apply for a separate virtual bank licence. “We are still reviewing the HKMA consultation paper,” she said. 

She said the bank would also focus on opportunities in the Greater Bay Area, which consists of nine cities in Guangdong and the two special administrative regions of Hong Kong and Macau.