Banking on the Future
To prepare students for tomorrow’s financial sector and promote professionalism for the fast-moving fintech industry, HKUST has made some great strides this summer. A fintech symposium was held to mark the launch of a new academic program, and a new cross-border collaboration has been established with prominent partners to co-develop the first fintech qualification framework in China.
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Can Virtual Banks Coexist with Traditional Banks?
To mark the launch of the new MSc in Fintech Program, jointly offered by the three Schools at HKUST for the first time, a fintech symposium was held on August 17.
According to a panel of financial experts, virtual banks and traditional banks can comfortably co-exist while facilitating financial innovation and enhancing customer experience. Virtual banks are viewed as a key component of Hong Kong’s push for smart banking.
The panelists emphasized that understanding different customer preferences, and how to best utilize technology to provide customers with personal services and products, is fundamental for a successful banking strategy in Hong Kong.
Expert insights
The panelists explained that digital banking and fintech initiatives should focus on elevating the customer experience rather than engaging in disruption for disruption’s sake. Panelists included: Professor KC CHAN, Chairman and Senior Advisor, WeLab; Christine IP, CEO, Greater China, United Overseas Bank; Arthur YUEN, Deputy Chief Executive, the Hong Kong Monetary Authority (HKMA); and Simon YOUNG, Chief Compliance Officer-Overseas at Ping An Group. Moderated by Chair Professor HUI Kai Lung, the panel represented the strong network between our faculty and alumni in both the finance and technology sectors.
Yuen pointed out that while it is still early days for the virtual banking industry, traditional banks and virtual banks are not two separate entities. Both types of bank are subject to the same prudent regulatory requirements. Issuing virtual banking licenses is a positive step towards transforming Hong Kong’s financial ecosystem by creating synergy between banking and technology.
Virtual banks are unlikely to impinge deeply on the primary businesses of traditional banks to start with, Ip said. By offering customers similar products and services as virtual banks via online platforms, UOB is already a digital bank in some ways, she noted. To meet the needs of the country's under-served banking community, UOB has launched a virtual banking service in Thailand.
Immediate interaction
According to Young, virtual banks have the potential to generate customer engagement beyond transactions. Virtual banks can interact immediately with customers to create new experiences by adding personal and social elements to the customer journey. The ultimate objective, Young said, is to create experiences where customers want to use digital banking services not only for making payments, but in a similar way they can use AI to recommend fitting sizes of clothing.
Professor Chan said it is possible to provide a high-value customer proposition while meeting the stringent personal data protection expectations of Hong Kong customers. He stressed the importance of understanding and respecting that Hong Kong customers treat their personal data very seriously.
The panelists applauded the launch of the MSc in Fintech Program, highlighting how graduates would be able to address Hong Kong’s shortage of fintech professionals. This new Program provides students with knowledge and skills related to popular financial technologies, including AI, blockchain, big data, cloud computing, P2P, e-payment and online lending. They agreed that the new program will nurture future talent to meet the growing needs of the sector. The HKMA has issued eight new virtual banking licenses since January.