Hope or hype: Are virtual banks a true disruptor to traditional lenders?
- Compared to traditional lenders, virtual banks offer an entirely new customer experience thanks to the quickly developing financial technologies
- Where do traditional lenders fit into this new financial framework, and what will the future of the banking industry look like in Hong Kong?
In the past few years, virtual banks have made quite an impact in Hong Kong. Compared to traditional lenders, virtual banks offer an entirely new customer experience thanks to the quickly developing financial technologies (fintech). Where do traditional lenders fit into this new financial framework, and what will the future of the banking industry look like in Hong Kong?
South China Morning Post’s China Conference: Hong Kong returns to address the evolving world of virtual banking and the effect it may have on the traditional financial institutions in Hong Kong.
Moderated by Enoch Yiu, Chief Reporter specializing in business at the Post, the panel discusses the present and future of banking in Hong Kong with panellists: Ryan Fung, Chief Executive of Ping An OneConnect Bank, Rockson Hsu, Chief Executive Officer of ZA Bank, and Lawrence Lam, Chief Executive & Consumer Business Manager of Citibank Hong Kong.
The market has been very receptive to virtual banks thus far. In fact, the eight virtual banks that have licenses to operate in Hong Kong have acquired a total of about $15 billion - $20 billion in deposits since being established.
According to Ryan Fung, Chief Executive of Ping An OneConnect Bank, the last year has been very fulfilling for virtual banks, as they have been successful at applying fintech capabilities and implementing big data in order to vastly improve customer experience. Virtual banks can circumvent the need for documentation and loan collateral, as well as eliminate long waiting periods and extra account fees. This creates a much more convenient and seamless process for customers. The goal is to “provide a one-stop comprehensive service to the target clients.”
Rockson Hsu, Chief Executive Officer of ZA Bank, shares the three objectives of virtual banking are to promote fintech innovation, promote financial inclusion, and offer a new customer experience. In order to stay in line with these objectives, virtual banks would soon like to offer a full suite of products, including options for insurance and investment, wealth management, and enhanced return.
As the Chief Executive & Consumer Business Manager of Citibank Hong Kong, Lawrence Lam acknowledges that they are facing a challenge due to “the increased number of players,” but that the rise of virtual banks motivates them to work hard to come up with ways to better serve their customers. In order to improve the customer experience with traditional banks, he believes they should build more fun and convenient mobile features and provide more customer engagement.
Fung also notes that “traditional bank vs virtual bank isn’t a competition in nature, it’s more about how we work together to serve the community in a better way.” The panellists seem to agree that it’s all about offering the best experience possible to customers and clients. As Lam says regarding the main objective of any bank, the question is “how can we provide the best and most relevant product and solution to our client?”
