Need for speed: Industry leaders weigh on digital innovations in banking

Financial literacy is a prong that must be reinforced to improve digital services.

As consumers shift to mobile in their daily transactions, the banking industry is also reeling in to provide the same services they offer in retail through digital applications and services.

Speaking during Asian Banking and Finance’s Roundtable Discussion held 28 April 2021, HSBC Regional Head of Digital, Wealth & Personal Banking for Asia Pacific Charles Allen, Bank Rakyat Indonesia EVP of Digital Banking Development and Operation Muhammad Ghifary, and China Construction Bank (Malaysia) Berhad Chief Digital & Global Banking Strategist Steven Wong Weng Leong shared their latest offerings and developments when it comes to digital banking.

Allen said that their growth in their services have improved compared to when they first embarked on going digital. From delivering services in seconds, to providing alternative solutions to their customers, HSBC was able to ramp up both their offerings and performance in a short period of time.

“We've taken our Hong Kong customer mobile onboarding journey from 45 minutes down to less than five minutes, making it much faster for customers to log on and do their everyday banking needs. If we go back a few years, it might take a customer 40 seconds to log on to our mobile app or website, but we're now down to four seconds because we've just recreated those journeys,” he said.

“In many markets, we get 10, 15, or 20 logins per customer, per month, so it's becoming a daily routine. We get feedback around making it easier for customers, such as ‘I want to switch my device,’ or ‘I want to get a new phone but how do I move my account?’ So we've made that journey easier,” he added.

HSBC is combining great digital experience with the power of their people. In the last month, they brought on 100 new client facing wealth planners in China and they are launching new capabilities to help bring digital to the forefront.

With a strong performance in their digital growth, HSBC is aiming to focus on partnering with fintech firms and other companies in the industry to further improve the capabilities of their digital offerings.

“We've made a statement that we're investing $3.5b in wealth in the next five years. It's important to recognise that digital is actually already a massive contributor to what we do in wealth,” he said.

“We're close to 80% of our wealth sales in Asia Pacific. Our digital channels have come through double digit growth since last year. Over 80% of our securities trading goes through digital channels whilst 95% of all of our transactions or payment transactions go through digital,” he added.

Ghifary said that BRI enhanced their retail payment services by working on applications and prioritizing different segments. In BRI’s mobile banking platform, users increased by 250% compared to last year’s figures.

“Our mobile banking also showed a significant increase in its transaction volume, reaching up to 1,000% with our users and also increased by 250% than the previous year. We are focusing on our digital link product, both for consumer consumption and also for business as well. We try to speed up the time to deliver the disbursement whilst minimizing the risk as well,” he said.

“We try to keep digitising our core, try to build digital products that are actually customer centric. We are shaping the digital culture with the solution that we would like to deliver as to solve customer pain points, and also bring the hyper-personalised added value to them, especially for the micro segments,” he added,

Reaching micro segments

Ghifary said that digital strategies being implemented by BRI are proving to be complementary to the services they provide in their retail banks.

However, the real challenge is reaching the micro segment where financial literacy remains to be the main gap between providing quality service and reaching a bigger number of customers.

“We have around 5,000 branches across Indonesia, with about 150 million customers which is about a half of Indonesia’s population. There are people that are actually still unbanked,” Ghifary said.

“BRI is trying to be the champion in the financial equation. We basically would like to keep expanding or extending our scope by targeting the people that are still unbanked so they will be able to access our financial services in the future more easily than before,” he added.

Although this is their thrust, one of the root problems is going to deeply-embedded cultures and shifting it to adapt to the changing times.

Especially in remote areas, rural retail banks are more favored as this has been the more trusted way of doing banking.

“Not everyone in the rural areas are familiar with the digital banking service. They are already used with their brands and being able to meet the relation manager directly or an officer directly. With this practice, it’s becoming a challenge to shift the culture and the mindset of those living in these areas,” he said.

“We need to educate them first in order that the banking service can be accessed through the digital smartphone. We also need to build the trust, to know what the trustworthy level is for them when accessing our digital platform or onboarding. We need to put some effort to educate the society or probably our customers to be more digitally and financially literate,” he added.

Adapting to new developments

Weng Leong said that CCB works with their consumers to bring their digital solutions to the market more seamlessly and in a way that the users will be able to maximise its capabilities.

Through helping consumers digitise, then moving to digitalisation, CCB sees as the way to make digital banking more effective for the long-term.

“In Malaysia what we do is we look at our wholesale customers, we look at our customer base that we have, we go in and collaborate with our customers. In terms of two aspects, one is to help them to digitise. The other one is to help them to digitalise,” he said.

“What we mean by digitise is basically we look at the process, we look at how we can ensure that our customers can be more efficient. Through more seamless features, we see how we can customise our products and services,” he added.

For banks to be able to keep up with the fast-developing digital landscape, partnering with other industries and collaborating with other banks will be a key to achieve the speed needed to stay relevant in the market.

Whilst this will entail understanding emerging trends such as fintech developments, cryptocurrencies, and bitcoins, banks may need to assemble their own teams to specialise and later provide these services to their clients.

“You look around the world today, the challenger banks or the Neo banks are just focusing on the retail segment or the SME segment, but they don't look into the holistic picture of how to build a digital bank,” Weng Leong said.

“We look at them as more of complimentary, not so much competing because we do believe in collaborations because through collaborations through partnerships, it's a win-win not only for the bank but also for our customers,” he added.