Businesses in Hong Kong slow to adopt digital tech despite growing demand, finds HSBC survey
About three quarters of the companies surveyed recognise importance of digital tech, but only 28pc have plans to use it
Hong Kong businesses are slow to adopt company wide digitisation despite a growing demand and enthusiasm for digital technologies, especially mobile banking, according to a new study by HSBC.
About three quarters of the local companies surveyed recognised the benefits and importance of digitalisation, but only 28 per cent had plans to adopt digital technology. HSBC polled senior business executives from more than 300 Hong Kong companies for the survey.
According to the survey, local companies’ slow take up of digital technology was down to a number of factors, including: a limited understanding of digital concepts such as big data, Open API and Internet of Things; companies’ long-standing aversion to taking risks; and Hong Kong’s weak innovation culture compared with mainland China, which is home to the largest global e-commerce market and a third of the world’s start-up unicorns.
“Hong Kong’s market strength is in compliance, security and data privacy, which in many aspects is the opposite of innovation. This is the choice of the Hong Kong market – people don’t want to try new technologies before the legal compliance is in place,” said Arthur Chan, chief executive of big data company SagaDigits.
“The innovation process in China is trial and error, whereas in Hong Kong it’s ‘wait and see’. Hong Kong companies want to stay in their comfort zone and are scared of being challenged. But in China and the US, people are trained to explore new things and take risks in business and education.”
There are signs that companies in Singapore are also struggling with these issues, as about 70 per cent of local finance executives said their teams could not keep pace with rapid digitalisation, in a survey conducted by recruitment company Robert Half in October.
Chan, however, said he believed the speed of digital innovation at businesses in Hong Kong was accelerating gradually, as more people used mobile banking for transactions. “For a business, the most challenging part is how to open a bank account, which is getting more difficult. Banks need to improve this process.”
More than 40 per cent of senior executives in Hong Kong used mobile devices to manage their businesses, and 70 per cent of respondents said they preferred mobile to internet banking, the survey found.
“It’s encouraging to see Hong Kong companies embracing the digital economy, but it is important to transform digital knowledge into real business plans,” said Terence Chiu, head of commercial banking at HSBC in Hong Kong. “That is critical to success in today’s market environment.”
Hong Kong already has one of the world’s highest mobile phone use rates at 248 per cent, government data from February 2018 shows. In other words, the average Hongkonger owns 2.5 mobile phones and this figure is set to rapidly increase with about 145,000 new mobile numbers registered each month. 5G networks are already under trial in Hong Kong, ahead of their expected roll-out in 2020.
Business executives most commonly used mobile devices to check account balances and remittances, the survey found, while about two-thirds of respondents believed that biometric authentication methods – such as facial recognition and fingerprint scanning – are more secure than passwords.