Hong Kong banks enjoy strong trust from consumers, but non-bank providers could make inroads on payments
HONG KONG; Jan. 16, 2019 – Half of consumers in Hong Kong are willing to let third parties access their financial data in order to get more-personalized banking services and higher returns, underscoring the potential for Open Banking solutions in the Asian financial hub, according to new research from Accenture (NYSE: ACN).
Open Banking allows consumers to grant technology providers, fintechs, telecommunications companies, retailers and other third parties access to their financial data via open application programming interfaces (APIs), enabling consumers to compare products and services and initiate transactions more easily. The Hong Kong Monetary Authority (HKMA) is about to launch the first phase of its open API framework on Jan. 18 as part of its “smart banking” initiatives that also include a new faster payment system and virtual banking licenses.
According to Accenture’s research, which is based on a survey of more than 2,000 consumers in Hong Kong, 51 percent of respondents said they would be willing to securely share their data with a third-party provider if doing so would get them more-personalized services or tailored offers like a better mortgage rate or higher returns on savings and deposits.
At the same, only 31 percent said they would not be willing to share their data. By comparison, similar surveys that Accenture conducted in Australia and the U.K. showed that consumers in those markets were more than twice as likely to say that they would not be willing to share their financial information with third parties (66 percent and 69 percent, respectively).
“Banks still enjoy a lot of trust from consumers, but Hong Kongers are willing to share their financial data if they know they’ll get something in return — indicating that the foundations are clearly there for Hong Kong to leapfrog many markets with Open Banking solutions,” said Fergus Gordon, a managing director at Accenture who leads its Banking practice in Asia Pacific and Africa. “To strengthen their engagement with customers and benefit from consumers’ willingness to share their data with non-bank providers, banks must look for opportunities to partner with third parties to offer the types of services their customers want.”
When asked what other types of organizations they would trust their data with, 16 percent of Hong Kongers cited retailers and large online merchants and 33 percent cited international and local payments firms, underscoring their openness to non-bank providers. Hong Kong consumers are also very open to using third-party providers for payments, with 38 percent and 26 percent of Hong Kongers saying they would trust online retailers and large technology companies, respectively, to initiate a payment.
Digital payments and wallet services that are ubiquitous in the Chinese mainland are also quickly making inroads in Hong Kong, with the number of Hong Kongers who said they use these services at least once each month more than double the number who say they never use them (69 percent vs. 31 percent). Not surprisingly, younger consumers are more frequent users of digital wallets than older ones, with 80 percent of millennials and Gen Zers — those under the age of 35 — saying they use them at least monthly, compared with only 47 percent of baby boomers (those 55 and older).
“Asia’s large population of digitally savvy young consumers with rising disposable income demands from their financial-services providers the same sort of convenience, ease-of-use and access that they’ve grown accustomed to from their favorite social media or tech platform,” said Piyush Singh, a managing director at Accenture who leads its Financial Services practice in Asia Pacific and Africa. “Banks need to quickly adapt or risk losing this future generation of consumers to startups and tech firms that ‘get’ them.”
Young consumers are more familiar with Open Banking and more willing to share their data than older ones, but the generational divide is even more evident when comparing consumers’ attitudes toward payments. For example, only 30 percent of Gen Zers and millennials said they’re not willing to initiate payments through non-bank providers, compared with more than half (55 percent) of baby boomers.
When asked to identify the main hurdles to embracing Open Banking, Hong Kong consumers most often cited concerns over security and privacy of their financial data, mentioned by 71 percent of respondents, followed by lack of trust in large tech companies and third-party providers to handle financial data (43 percent of consumers) and a lack of sufficient understanding of Open Banking (42 percent).
“The potential for Open Banking is huge, particularly in Hong Kong, where consumers are so willing and open to sharing their data, but trust will be a key factor in the success of these solutions going forward,” Gordon said. “Data privacy and security will be more relevant than ever for financial firms and addressing concerns around that in a consistent way should be a top focus for banks.”
To learn more about Accenture Banking, visit www.accenture.com/banking
Accenture conducted an online survey of 2,010 Hong Kong consumers during November and December 2018, with the sample weighted to ensure it was representative of the city’s population.
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 469,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.
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