Race against the clock for Asian banks to shake up payments scene
Virtual Bank competition intensifying in a crowded arena.
Banks need to fight time to maintain their dominance over the payment space and preserve lost ground, as new technologies with tremendous information capacities continue to quickly erode their market share.
Increasing virtual banks in Hong Kong, Taiwan, Australia, Vietnam, Indonesia, and Thailand emphasize the significance of payments, given that they are jostling for market shares in the disputed SME and retail sections, Ken Lo, Head of the Zhong An International Strategic Partnership, said at the 28 August 2019 Asian Banking & Finance Digital Payments Summit in Hong Kong. The meeting was attended by over 100 participants.
Eight of the seventeen private lenders in China are digital companies like WeBank, MyBank and Baixin Bank. Lo hopes increased “co-opettition” as digital companies build alliances with Fintech’s and traditional lenders to thrive, as Hong Kong permits eight competitors and Singapore permits five.
Fintech isn’t the only issue. Commerce first-hand ecosystems such as Alibaba and Amazon have usually joined the payment room in their attempt to reinforce their place as ecosystem participants, according to Arthur Shek, partner of McKinsey & Company. “Ecosystems have key benefits, in particular in fields in which fintech tried to interrupt companies that are more regulatory and the ROE concentrate of shareholders,” he clarified.
In order to remain profitable, Lo thinks that competitors should adopt Open Banking designs in order to improve the general client experiences. This will also unlock client data to third-party utility suppliers and improve KYC’s safety protection capacity. Contrary to the option to extend the accessible API to other business fields, sales could be up 20% by 2020, although the accessibility of tests and the standardisation of TSP and APIs could present a barrier when applying the open API.
“API works as a B2B brand, from economic and IT facilities to technology,” said Celent Senior Analyst Eiichiro Yanagawa in the lecture.
Policies changes are also driving Hong Kong adoption of fintech, including a lower income tax rate of 8.25%; $10b university research funding; $500 m Talent Technology Scheme for attracting skill; $50b for technological development for HKSTPI and Lok-Ma Chau Loop, described Musheer Ahmed, General Manager of the Hong Kong FinTech Association.
In this context, according to Rajesh Mehta, Chief Financial Officer and Head of Trade Solutions, APAC, Citi, customer perceptions are quickly evolving as end users anticipate accessibility, immediate resolution and reconciling, instant handling and real-time information as standard. This is driven by a change from information to data-driven intelligence that leads companies to replenish their basics.
This entails a change to a information engine that offers immediate and indirect entry via APIs, analytical instruments, and ranking methodologies for information products.
Avril Rae, Fintech Head at KPMG said in her lecture that the finance sector will alter more than in the previous 100 years. She noted that there are extensive shifts to information, company designs, computing and legislation.
According to Rae, the next border is inclusion of lifestyles as lenders attempt to be streamlined, interactive, proactive, forward-looking while still imbibing a background, awareness and groundbreaking confidence and safety.
“No currency is the fresh currency,” said Ajay Mathur, Chief Executive Officer of DBS Bank’s Consumer Banking Group and Wealth Management in his lecture. It’s understanding the position of item and facilities in a customer’s lives.’ Whatever the outcome, general corporate effectiveness will be accomplished as reduced transaction fees can save up to US$ 10b; the discharge of caught money will generate profits of up to US$ 20b and energy costs can save up to $10b, making a contribution to Hong Kong GDP of around 10 percent, says Michael Ho.
However, strong digital instruments also increase the danger of fraud but companies can fill defense loopholes through worldwide common intelligence, says Cameron Church, LexisNexis Risk Solutions Director, Market Planning Fraud and Identity. For example, it is helpful to monitor the fraudsters across the finance network by using a distinctive electronic image using comprehensive internet and portable phone knowledge, real place assessment, confidence information and information against business colleagues.
As Hong Kong is preparing to implement a national digital personal ID card by 2020, some versions of an earlier eKYC solution were launched in late 2017 to boost economic growth, such as TransUnion’s IDVision, said Victor Yim, Global Product Owner, Fraud & ID Solutions, TransUE. Yim plans to develop feature detection algorithms on the IDVision to support a documentation authentication module that use short video clips of the ID rather than pictures. It also has a general confidence score to allow and will soon have a verification of Chinese citizen ID.