HSBC, Citi speed up digital push to ward off Asian upstarts
- Banking giants are rolling out new video services and fresh mobile features for everything from wealth management to insurance
- The heightened digital activity amid the coronavirus crisis comes as traditional banks contemplate how to fend off competition from virtual banking start-ups
Banks in Asia’s financial hubs, such as HSBC Holdings and Citigroup, are finding that the disruption from the coronavirus outbreak is helping them push back on a threat from a new breed of virtual upstarts.
With branches shut, customers social distancing and fearful of tainted cash, the banking giants are seeing a surge in demand for digital services for everything from wealth management to insurance. Now they are rolling out new video services and fresh mobile features for retail and affluent clients, speeding up a transformation to cement customer loyalty and reduce costs, according to consultants and bankers.
“Most banks are using this as an opportunity to sharpen their strategy,” said Fergus Gordon, growth markets banking industry lead at Accenture. “There will be a longer-term impact on their balance sheets.”
For HSBC, which gets about a third of its revenue in Hong Kong, the stakes are high. The city is opening the door to eight new digital-only lenders with powerful backers such as Alibaba Group Holding, the parent company of the South China Morning Post.
The start-ups could capture as much as US$15 billion, or 30 per cent, of the city’s banking revenue, Goldman Sachs estimated in 2018.