The rise of Fintech has had a remarkable impact on the Banking Industry in Hong Kong. How did Hong Kongers react to this trend? Which factors should banks focus on when adopting digital transformation?
Hong Kong is renowned for its technological advancement. The penetration of internet access and mobile phone usage is intensively bolstered, making it a viable platform for Hong Kong’s fintech ecosystem.
Invest Hong Kong’s report shows that Hong Kong is home to approximately 600 fintech enterprises and startups. Furthermore, 86% of local banks have incorporated or plan to incorporate fintech solutions through all financial services.
The city was ranked fifth among developed markets for consumer fintech adoption. Since 2014, Hong Kong fintech businesses have raised over 1.1 billion USD in venture capital.
The Hong Kong government plans to enhance Hong Kong’s presence as a financial hub, with fintech as a primary subsector to invest in. Specifically, the Hong Kong Monetary Authority (HKMA) has identified 7 Smart Banking Initiatives:
- Research and Talent Development
- Faster Payment System
- Fintech Supervisory Sandbox
- Virtual Banking
- Banking Made Easy
- Open API
- Closer cross-border collaboration
Will the Hong Kong government’s attempts be compensated? Will citizens of the country favourably select proposed fintech banking solutions for their daily usage? In this article, Standard Insights will help bring Hong Kongers’ banking preferences to light.
Let’s scroll down for more details!
In June 2021, Standard Insights surveyed over 300 respondents on the FinTech and Banking industries in Hong Kong. Standard Insights was assisted by the FinTech company Statrys in the survey design of the research.
Traditional Banks Have Room For Digital Transformation
According to our digital survey, 45.6% of respondents say they have used more contactless payment methods since the Covid-19 outbreak. Meanwhile, 53.4% of Hong Kongers selected contactless payment solutions for their banking usage before the pandemic.
Indeed, 65.7% of Hong Kongers confirm that they install a banking app on their phone. Also, 42.1% make professional payments online with high-frequency banking: weekly and monthly.
We anticipate that these trends in banking behavior will change the way people utilize bank branches. Customers who enjoy speedier onboarding and more efficient customer service on digital channels are less prone to return to the enormous queues that are commonly correlated with physical outlets.
Factors Affecting The Adoption of Digital Banking in Hong Kong
According to our survey, the following factors convince them to choose a digital-only bank over a traditional counterpart for their usage:
- The speed of transactions
- The quality of services received for the account’s cost
- The platform’s user-friendliness
There are also many other factors that bank branches can consider to optimise the digital customer experience at best. Click here for more information.
Based on our survey, the trust and reputation of the bank is the most crucial factor when considering opening a bank account. Therefore, bank branches should figure out strategies that help leverage the bank’s awareness and trustworthiness besides the user experience features mentioned above.
In recent years, the Hong Kong banking industry has been at the forefront of fintech growth, offering a wide range of services and products to consumers via digital channels. As an example, the use of the Faster Payment System (FPS) has increased significantly.
The HKMA has been creating a favourable policy framework that allows the sector to take advantage of possibilities systematically created by fast technological advancements. In areas such as consumer protection and cyber security, the HKMA will continue to strive for the highest international standards.
The future of the Hong Kong fintech market seems brighter than ever. Do you agree?
Access our full report for all the on-demand insights in Hong Kong here.