Asian Banking & Finance (July - September 2023)

Issue No. 111

DISPLAY TO 30 SEPTEMBER 2023

TRADITION MEETS TECH THE CEO OF THE PHILIPPINES’ BPI TALKS REINVENTING THE BANK IN THE DIGITAL ERA

FUNDING STILL A CHALLENGE FOR FINTECHS IN 2023 Asian Banking & Finance

SINGAPORE BANKS PRIORITISE UPSKILLING, COUNSELLING FOR EMPLOYEES BANKS SET INFORMAL HIRING FREEZES AS FOCUS TURNS TO PRODUCTIVITY OCBC SETS GREEN LOAN AMBITIONS, EYES 10% GROWTH IN ECO-CARE LOANS Alvin Lee Head, Group Wealth Management and Community Financial Services, Maybank p. 22

Jose Teodoro “TG” Limcaoco President, CEO Bank of the Philippine Islands

S G IN APACS K N GEST SSET A R AR A L S BY 0 5 ANK B

FROM THE EDITOR

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ank of the Philippine Islands (BPI) has been a trailblazer in the banking industry, reinventing itself over the course of 170 years. With a strong emphasis on digital banking, BPI is poised to establish itself as the undisputed leader in the field.

Read more on page 10.

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In the broader financial landscape, on page 14, the priorities of investors and wealth management customers have undergone a drastic shift. Factors like health and ESG considerations now play a pivotal role in wealth preservation. Maybank’s Alvin Lee highlights the transition from pure profit-making endeavors to a more holistic approach that prioritizes well-being.

Meanwhile, Singapore banks have shown a stronger resilience compared to their Asian counterparts, with the impact of Credit Suisse’s AT-1 bond write-down raising concerns. Whilst Asian banks are expected to be less affected, analyzing how Singapore banks navigate global banking crises is crucial. Read more on page 16.

In the constantly evolving banking and finance industry, staying informed and embracing innovations are crucial factors to sustain success in this landscape.

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ASIAN BANKING & FINANCE | Q3 2023 1

CONTENTS

10

INTERVIEW BANK OF THE PHILIPPINE ISLANDS’ PRESIDENT TALKS REINVENTION AND DIGITAL AMBITIONS

FIRST 06 PH banks snub growing middle class market

07 Why Malaysian banks will never build a superapp

VOX POP 08 What is the future of fintech funding in 2023?

INTERVIEW 10 Bank of the Philippine Islands’ President talks reinvention and digital ambitions

14 Maybank’s Alvin Lee reveals changes in investment behaviour, wealth preservation

Published quarterly by Charlton Media Group Pte Ltd 101 Cecil St. #17-09 Tong Eng Building 2 ASIAN BANKING AND FINANCE | MARCH & FINANCE | Q3 2023 2019 Singapore 069533

RANKINGS

18

RANKINGS JAPANESE BANKS’ ASSETS DROP AS CHINA THRIVES

16

FINANCIAL INSIGHTS SG BANKS STRONG AND STABLE DESPITE UNCERTAIN AT-1 ISSUANCE MARKET – EXPERTS

CASE STUDY

20 Singapore banks champion employee well-being, upskilling

24 Job losses loom in Hong Kong banks as focus turns to productivity

FINANCIAL INSIGHTS 16 SG banks strong and stable despite uncertain AT-1 issuance market – experts

28 One in five of OCBC’s home, renovation, and car loans are now green 30 Hong Kong’s livi bank launches game-changing app for SMEs 31 Maybank’s YES fuels tech-driven growth of small businesses

COMMENTARY 32 Banking on customer experience

RANKINGS 20 Singapore banks champion employee well-being, upskilling 24 Job losses loom in Hong Kong banks as focus turns to productivity

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CARDS & PAYMENTS

WOMEN IN BANKING

ENERGY FINANCING

WealthTechs win by managing wealth and not the wealthy

Banks offer flexiwork, mentor programmes to uplift women’s careers

Banks lagging behind net zero energy goals

The current state of wealth management services has one fatal operating flaw: they manage rich people instead of wealth.

According to Leon Ong of KPMG SG, most people now see the gap in wealth management, which is to serve the underserved segment.

Asia has come a long way in closing the gender gap; according to a 2022 report by the World Economic Forum, the East Asia and Pacific region— which includes Southeast Asian countries– has closed 69% of the gap.

Yet, it will still take 168 years to fully close the gap at its current pace.

Net zero and sustainability are amongst the key factors often named by experts as likely to shape the future of banking. On the surface, it seems to be the case: lenders have been quick to outline ESG goals. The biggest banks globally notably made pledges under GFANZ.

BANKING TECHNOLOGY

Did digital banks fail to disrupt?

They were touted as game changers, expected to revolutionise the banking industry and cause major headaches to the “old” incumbents. Yet, in the decade since the massive boom in digital-only banks—also known as virtual banks, neo banks, and challenger banks—only a select few have managed to reach profitability.

4 ASIAN BANKING AND FINANCE | Q3 2021 & FINANCE | Q3 2023

RETAIL BANKING

LENDING & CREDIT

Overcoming biases to succeed in the banking industry

How digital mortgages will overhaul traditional banking models

Unspoken expectations and unconscious biases often weigh down on women building up a career for themselves, noted UOB’s Jacquelyn Tan. She witnessed how unconscious bias such as societal and cultural stereotypes can impact one’s career, especially for women.

Digital mortgages, expected to displace today’s traditional mortgages, will both be an opportunity and a threat to traditional banks–and which side of the ledger they will find themselves in will depend on how they deviate from branch-based operations. operations, S&P Global Ratings said in a report.

ASIAN BANKING & FINANCE | Q3 2023 5

FIRST SHAREHOLDERS BUOY HONG KONG VIRTUAL BANKS FROM FAILURE RETAIL BANKING

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ontinuous shareholder support should help Hong Kong’s virtual banks weather initial losses in the path to growing their business.

Six out of eight virtual banks in Hong Kong reported narrower losses in 2022 amidst a moderation in operating cost growth and expansion in higheryielding lending, the ratings agency, Fitch Ratings noted in a report.

However, as they stand, the nascent banks remain vulnerable to higher failure risks than traditional banks due to a limited record in terms of customer loyalty, economies of scale, and risk management.

“Virtual banks are more reliant on costlier deposits than traditional peers due to their nascent franchises,” Fitch said in a report. “These higher funding costs drive virtual banks’ risk appetite, evident from their lending to higher-risk segments, such as SMEs and unsecured borrowers, and investing in higheryielding corporate debt securities.”

Investment securities and corporate debt accounted for 36% of virtual banks’ total assets on average as of end-2022.

Loans endangering neobanks Neobanks’ loans to higher-risk borrowers expose them to potentially higher credit costs in an economic downturn. This also renders them more susceptible to potential market confidence issues in the event of stress, especially since their depositor loyalty is unproven and easy transfers make the deposit base vulnerable to flight risk, Fitch warned.

The shareholders of these virtual banks are key for virtual banks as they establish their foothold in the industry.

As most of these shareholders are established corporates or incumbent banks themselves, they provide the necessary capital and funding support to help virtual banks weather initial losses and support their growth momentum.

6 ASIAN BANKING & FINANCE | Q3 2023

Philippine banks reportedly devote only less than 10% of their revenues to IT. In comparison, on average, incumbent banks across APAC invest about 15% of their revenue.

In line with this, digital channels of Philippine banks’ account for just 5% to 15% of their revenue-below the average of 25% for their peers in Asian emerging markets.

Local fintechs, meanwhile, focus almost exclusively on payments.

Infrastructure constraints further limit their reach, the analysts noted.

“The result is a widening gap between the country’s enormous underbanked population and the expanding range of innovative financial technologies lying just beyond its borders,” they warned.

Corporations receive 76% of all loans extended in the Philippines.

In contrast, small and medium enterprises or SMEs continue to face binding credit constraints.

This is a problem for a country with over 15 million informal entrepreneurs Traditional banks have been slow to reach new customers outside and self-employed workers—a massive their existing client base (Photo by Patrick Quisil from Pexels) pool of would-be borrowers who have little access to traditional finance.

Retail lending also remains focused on a narrow band of wealthy households, McKinsey noted.

“This unbalanced distribution of LENDING & CREDIT existing loans—combined with a rapidly growing adult population, he Philippines has been continuous broad-based gains in identified as one of the household income, ongoing regulatory world’s largest greenfield efforts to promote financial inclusion, markets for digital financial and the introduction of new digital services— but local banks are not technologies—makes retail lending rising up to attain its true potential. especially prone to disruption and Banking penetration rate remains accelerated growth,” the report said. among the lowest in the region.

Guillaume de Gantès Domestic banks have also Traditional financial institutions traditionally ignored remittances, focus heavily on commercial lending, which mobile payment players such leaving a rapidly growing, increasingly as GCash and Maya are now explicitly affluent, and digitally savvy potential targeting. It’s easy to see why these customer base with little access to e-wallets have set their sights on this: financial services that meet their each year, on average, about $30.5b in needs, consulting firm McKinsey & remittances-or 10% of the country’s Company said in a report.

GDP-flows into the Philippines “Traditional banks remain focused Kristine Romano through wire-transfer services and on wholesale banking and have been traditional interbank networks. slow to reach new customers outside Despite this massive market, their existing client base. Rural traditional banks have not areas are home to nearly half the systematically incorporated remittance population, yet rural households are income into their lending decisions, especially underserved, and many McKinsey noted. have little or no access to brick-and“Remittances play an especially mortar banking infrastructure,” wrote Remittances play vital economic role in rural areas, McKinsey senior partner Guillaume an especially where households are least likely to de Gantès; associate partner Hernan Gerson; and Manila partner Kristine vital economic role have access to bank accounts, credit in rural areas Romano in the report. histories, and collateral.

PH banks snub growing middle class market

T

FIRST

Ryan Teoh

Ahmad Nasri Abdul Wahab of KPMG addresses the forum’s attendees

Ahmad Nasri Abdul Wahab

Why Malaysian banks will never build a superapp

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BANKING TECHNOLOGY

t is unlikely that there will ever be a banking superapp, as consumers have no issue switching between apps to accommodate their financial and non-financial needs.

“Consumers have no qualms using many apps that are [the] best fit for their specific needs and will choose a financial service provider based on convenience at the point of transaction,” Ryan Teoh, group chief strategy and innovation officer at RHB Bank Berhad, told attendees of the Kuala Lumpur leg of the 2023 Asian Banking & Finance Forum held at the Impiana KLCC on 24 May.

Teoh presented a compelling slide illustrating how jam-packed Malaysia’s “Digitally Disrupted” banking landscape is: one that spans all 124 payment brands present in the country as well as the 14 sectors — some beyond banking and finance — in which they are active.

Successful digital disruptors such as Grab, Lazada, Shopee, and Fave, are blurring the lines between their identities as e-commerce platforms, payment facilitators or service providers, and even consumer loyalty apps. The end result is that these disruptors are building their

Cultivate a digital ecosystem that revolves around enabling agile and robust capabilities to fulfill evolving customer demands

own ecosystem, united by their own superapps.

Banks — both digital and traditional — are called to up their game in their digital services and channels and deliver both delight and convenience in order to continue capturing customers’ loyalty.

“Banks need to move away from its traditional stigma of being ‘risk-averse’ and ‘slow in responding,’ to being able to innovate and evolve with consumer needs,” Teoh stressed.

Teoh said that banks in Malaysia must find ways to integrate banking services into the daily lives of customers seamlessly; ensure that they have the right infrastructure to compete in terms of data analytics; and find a means for innovation to work within the walls of a “traditional” bank.

Ahmad Nasri Abdul Wahab of KPMG, the event’s keynote speaker, advised Malaysian leaders to turn customer data into actionable insights by defining the research, analytics, and visualisation aspects to maximise the service value delivered to customers.

He said it is also important to cultivate a digital ecosystem that revolves around enabling agile and robust capabilities to fulfill evolving customer demands; and design and deploy holistic customer experience service and solutions across the enterprise. Wahab’s recommendations are based on KMPG’s study involving 1,000 customers and 75 brands in Malaysia.

THE CHARTIST: HONG KONG’S CARD PAYMENTS MARKET TO GROW 4.8% IN 2023

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rowing preference for electronic payments and the city’s economy rebounding are expected to carry Hong Kong’s card payments to a 4.8% growth in 2023.

In a report, data and analytics company GlobalData said that the value of card payments in the city will reach HK$1.06b (US $136b) by end 2023, growing faster than the 3.2% growth reported in 2022.

“The convenience of electronic payments, well-developed payment infrastructure, a growing preference for contactless, and e-commerce payments are all facilitating increased payment card usage in Hong Kong,” said Ravi Sharma, lead banking and payments analyst, GlobalData.

Credit and charge cards are the preferred payment cards, accounting for 71.7% of

card payments value in 2022. This is mainly due to the associated reward programs, said Sharma, which makes it more beneficial than debit cards for consumers.

Credit cards also have wider acceptance among merchants, while debit cards are not that popular, Sharma added.

Debit cards accounted for the remaining 28.3% share of card payments in 2022. The key reason for low debit card usage is the limited acceptance of domestic EPS debit cards. These cards can only be used for offline payments in the country.

In GlobalData’s 2022 Financial Services Consumer Survey, credit cards are the most preferred payment method for e-commerce payments, one-third of total online purchases.

This growth could support Hong Kong’s payment card market.

Hong Kong: Card Payments Value (HKD billion), 2019-27f

Source: GlobalData Banking and Payments Intelligence and Center

ASIAN BANKING & FINANCE | Q3 2023 7

VOX POP

What is the future of fintech funding in 2023?

FINANCIAL TECHNOLOGY

Sumit Kumar Managing Director and Partner, Boston Consulting Group Fintech funding will continue to be a challenge in 2023. Typically over 40% of funding in the fintech space is linked to large ticket deals for Series C+ fund raises. Investors have a much sharper lens now when they look at investing – key considerations include the quality of the team and founder, viability of business model in the long term, trajectory of cash burn, and unit economics. A lot of Fintechs rode the COVID-19 wave and grew big without really focusing on the fundamentals of sustainable growth and value creation. Some of these large fintechs are near their Series C or D rounds and find it difficult now to re-orient their business model from explosive growth in customer/transaction volumes to profitability with a viable business model. Investors have also realised that IPO exits in the growth tech space in markets like India and Southeast Asia (SEA) are tough.

With a lack of depth in equity markets in places like SEA, the downfall of SPACs as an option for listing from the US, and lacklustre returns of growth tech stocks post-listing make investors very jittery in constantly pouring cash into these companies.

But the outlook is not all bleak. While absolute dollars in terms of total funding has gone down, the number of deals funded remains robust especially in the seed round and Series A round, which shows that founders with good ideas and the right economic model still have investors who are willing to support them in their journey of growth. From sectors like crypto, and wallets (with huge cash burn), funds have vanished, while others like lending, and wealth (large scale with good mix of B2C and B2B2C proposition) continue to see money flowing in.

Anton Ruddenklau Partner and Global Head of Fintech, KPMG International The future of fintech funding remains optimistic. Despite a slow 2022 for global fintech funding, falling to US$63 billion from 2021’s all-time high of US$122.9 billion, a bounce-back is expected. Growth outlook for the second half of 2023 may remain constructive, albeit at lower levels compared to previous years as investments are being prudently recalibrated. We believe the key trends in the upcoming months driving this rebound include higher focus on quality within the fintech space, rise in government support and deeper focus on key sectors.

Firstly, fintech investors are focusing on quality over quantity.

They are enhancing their focus on cashflows, profitability, and underlying unit economics of the company. We have seen a consolidation in the market, leaving with only “quality” fintech startups. These resilient and profitable fintech companies are boosting investor confidence in future investment choices.

Secondly, we expect more development in the form of supportive government policies and initiatives which will continue to drive demand in the fintech space. For instance, innovation and talent grants, as well as tax exemptions are given out by the Monetary Authority of Singapore (MAS). Regulators in the region are also prioritising green and sustainable fintech and are paving the way for fintech investors in this new emerging market. Ultimately, all efforts foster strong and resilient fintech ecosystem.

Thirdly, with the rise of ChatGPT, we are seeing fintech subsectors such as payments, generative artificial intelligence, digital assets, blockchain, embedded finance, and Environmental, Social and Governance (ESG) gaining steam in the eyes of investors.

PRODUCT WATCH

DBS launches multi family office platform

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BS Private Bank has launched the DBS Multi Family Office Foundry VCC (DBS MFO), offering investment and wealth services in a single platform without the need for clients to set up their single family offices in Singapore.

DBS MFO is an umbrella VCC with multiple underlying sub-funds. Clients may access a range of investment strategies and can choose either to have their subfund professionally managed by the DBS Discretionary Portfolio Management or DPM team, or by a family member or investment adviser of their choice, the bank said in a press release.

8 ASIAN BANKING & FINANCE | Q3 2023

The new offering has reportedly attracted keen interest from ultra-high net worth families and their advisors globally, said Lee Woon Shiu, group head of wealth planning, family office & insurance solutions for DBS. Shiu shared that the bank is already in talks with over 20 clients and prospects across Asia since previewing DBS MFO a few weeks earlier.

“Client interest in succession planning and wealth preservation has intensified and, in fact, we recorded a substantial increase in the number of new requests in [the first quarter].

This will continue to fuel the growth of our family office business,” Shiu added.

DBS Multi Family Office Foundry VCC Schematic Structure

Source: DBS

ASIAN BANKING & FINANCE | Q3 2023 9

CEO INTERVIEW

Bank of the Philippine Islands’ President talks reinvention and digital ambitions CEO TG Limcaoco says that 6 million of BPI’s clients now use digital channels.

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PHILIPPINES

or Southeast Asia’s oldest bank, reinvention and innovation are the key ingredients to how it remains one of the Philippines’ biggest banks since its establishment over 170 years ago.

In the modern era, Bank of the Philippine Islands has set its sights on an ambitious goal: to be the undisputed leader in digital banking.

“The pandemic has accelerated digital banking adoption among Filipinos, and all indicators say that there’s simply no turning back. If we truly want to be the Philippines’ undisputed banking leader, we must ensure that each and every one of our customers, without exception, has digital access to our services and products,” Jose Teodoro “TG” Limcaoco, president and CEO of BPI, told Asian Banking & Finance in an exclusive interview.

Since assuming the leadership of BPI in 2022, Limcaoco has pushed BPI’s position as a pioneer in local banking — the very quality that has allowed it to thrive in every era.

“We doubled down on digitalisation over the past two decades as online banking transformed into mobile banking. We brought banking services that were only available on desktops to smartphones,” he said.

“BPI’s spirit of innovation has enabled the bank to become a pioneer in various aspects of banking. In the 1980s, BPI launched the Express Teller system and introduced the first 24-hour ATM service in the Philippines. We later on launched the country’s first debit card system. In the 1990s, BPI began offering phone banking and then introduced Express Online,” Limcaoco added.

More recently, BPI introduced the mobile wallet in 2012 for retail payments, the country’s first bank-initiated contactless payment system.

Its latest reinvention has borne fruit in 2022. BPI reported a record net income of PHP39.6b (US$716.36m) in 2022, 66% higher than in 2021, thanks to strong loan growth, higher net interest margin, and lower provisions.

In its most recent quarterly results, BPI posted a net income of PHP12.1b (US$218.77m), 52% higher than in the first quarter of 2022.

As of December 2022, BPI has nearly six million clients enrolled in digital channels and nearly four million active users across all digital platforms, and has facilitated 375 million transactions.

Limcaoco sat down with Asian Banking & Finance to share more about BPI in the modern banking era, his thoughts on the future of financial services across the region, and what inspires him in his daily life as CEO of Southeast Asia’s oldest bank.

What’s it like to be the CEO and president of a bank that bears such a long history?

As the President and CEO of the oldest bank in Southeast Asia, I am acutely aware of the challenges that come

10 ASIAN BANKING & FINANCE | Q3 2023

Jose Teodoro “TG” Limcaoco, President and CEO of Bank of the Philippine Islands

We must navigate a rapidly changing regulatory landscape that demands greater transparency, accountability, and compliance

with leading an institution with such a long and storied history. We have weathered many changes over the years, including wars, economic crises, and political upheavals. However, the current era of massive digital and regulatory changes presents a unique set of challenges and opportunities that we must address to remain relevant and competitive.

On one hand, we must embrace digital transformation and leverage emerging technologies to improve our operational efficiency, enhance customer experiences, and enable innovative products and services. This requires significant investments in technology and talent, as well as a willingness to adapt our business models and processes to the digital age.

On the other hand, we must navigate a rapidly changing regulatory landscape that demands greater transparency, accountability, and compliance. We must be vigilant in ensuring that we meet these requirements whilst maintaining our commitment to customer confidentiality and trust.

CEO INTERVIEW We cannot be truly sustainable unless we consider economic growth not only for our customers but also for our country

Ayala Triangle Gardens Tower 2 where BPI Head Offices are located as of June 2023 (Photo from Lobien Group website)

Tell us more about yourself. What’s your career like?

What led you to the path of becoming a banker, and eventually, the head of BPI? Many people assume that my entire career was spent in banking and finance, which is fair, given that most senior bankers do begin and end their professional lives in the field — in some cases, within the same institution that gave them their first jobs. How I got here is actually through a series of personal and professional reinventions.

After having earned my Mathematical Sciences degree, I started out in Silicon Valley as a programmer/analyst in a tech firm. This was the early ’80s and tech was the industry to be in. With Stanford (where I studied) being just a stone’s throw from The Valley, going into tech felt like the natural thing to do.

It would have been the comfortable thing for me to stay. I enjoyed it well enough, and coding remains a casual hobby of mine. However, my early love for banking and finance never really died out.

I’ve wanted to be a banker since I was young, due to my innate love for numbers and having been raised by a banker dad. So, when I had the opportunity to take postgraduate studies, I opted for an MBA rather than a master’s in computer science or engineering as many of my peers did, in hopes of reinventing my career path towards finance.

That Wharton MBA did lead to my first banking job in New York. My stint at JPMorgan was soon followed by an invitation to return home as a manager in corporate finance with BPI.

I’d really like to say that “the rest is history,” and that my banking career was a straight trajectory to where I am now.

However, the path to success is rarely easy or simple.

I didn’t stay very long in BPI after my first assignment.

I moved back and forth quite a bit among BPI, global banks, and Ayala Corporation before I found myself home — for good — at the helm of the bank I love.

How I got here was a combination of many things: a very supportive family, lots of hard work, carefully cultivated relationships, serendipity, and my own willingness to take chances and to reinvent myself.

What are your priorities as leader of BPI? One, to be the undisputed leader in digital banking.

The pandemic has accelerated digital banking adoption among Filipinos, and all indicators say that there’s simply no turning back. If we truly want to be the Philippines’ undisputed banking leader, we must ensure that each and every one of our customers, without exception, has digital access to our services and products.

Two, increase the share of SMEs and consumers in our loan book. Collectively, SMEs employ over 60% of the Filipino workforce. Supporting them through financial products that help grow and sustain their businesses positively impacts and helps secure the future of ordinary hardworking Filipinos.

Three, close the gap in funding leadership. We want to be the leader and increase our market share in the industry.

Four, establish the new role of branches as sales points and not only as service points. Branches will remain an integral part of BPI, but I believe their greater potential lies in providing financial advisory services and financial literacy sessions for customers, and as a space where our customers can explore the many ways in which we can help improve their financial well-being.

Five, set the standard for sustainable and responsible banking. We will strive to be more inclusive and reach out to the underserved. For us in BPI, it is actually ESG + E. It is a formula unique to us, where the last E stands for Economic Growth, since we cannot be truly sustainable unless we consider economic growth not only for our customers but also for our country.

BPI Chairman Jaime Augusto Zobel de Ayala (center), and President and CEO Jose Teodoro K. Limcaoco (2nd from left) preside over the bank’s Annual Stockholders Meeting in 2023.

ASIAN BANKING & FINANCE | Q3 2023 11

CEO INTERVIEW 2022 will likely be felt more in 2023 and in early 2024.

Higher refinancing costs may discourage businesses from ramping up their capital expenditures, which is historically proven to be a key driver.

But despite these circumstances, Philippine banks will stay resilient amidst headwinds. Interest rates have gone up, but the impact on economic activity and lending will not be disruptive. A manageable slowdown in loan growth may happen as businesses adjust to higher rates.

The country will do well, supported by a young, confident, digitally oriented population. BPI will do just as well, as we focus on this segment to help in building a better Philippines.

Limcaoco with Mariana Zobel de Ayala, BPI Consumer Bank Marketing, Platforms, & Digital Activation Head; Ginbee Go, BPI Executive Vice President and Consumer Banking Head; and, Fitz Chee, BPI Platforms Business Head, at the launch of the new BPI mobile app.

Could you share with us BPI’s growth targets over the next 12-24 months?

Our strategy remains the same — stay true to our roots and be focused on our journey of banking excellence anchored on trust and the best digital offers.

Our goal for this year is to surpass our achievements from the previous year. Our strategic plan is to maintain our competitive edge, expand customer base, and increase shareholder value. We aim to be the undisputed leader in digital banking, achieve a greater share of SME and consumer loans, close the gap in funding leadership, and transform the role of branches in the new normal.

From here on and until 2026, we will continue to focus on our key strategic priorities of digitalisation, customer obsession, and sustainability. We will be growing the BPI ecosystem through digitalisation, and capitalise on technology to serve the needs, and anticipate the wants of our different market segments. We will carry on with initiatives to nurture our relationships with our clients and make their lives easier.

Lastly, we will strengthen our efforts to champion sustainability. We will help create a sustainable future by further incorporating ESG principles in the way we do business, whilst ensuring concrete economic benefits are derived from these sustainability initiatives.

What would you say are the current concerns and challenges affecting the Philippine banking industry?

Whilst demand for services worldwide has remained firm, manufacturing may underperform in the coming year as demand for goods continues to slow. Higher cost of living and borrowing costs in most major economies is the main culprit and has increased the probability of recession.

A prolonged period of elevated inflation may also drag consumer spending in the Philippines in 2023. Better access to consumer credit since 2022 has offset some of the drag from inflation but is not expected to avert an impending slowdown in consumption.

Another factor that could pull down growth in 2023 is the increase in interest rates. Monetary policy usually works with a lag, and the full impact of rate hikes in 12 ASIAN BANKING & FINANCE | Q3 2023

We shall move forward with sustainability as core to our business and an integral factor on how we make decisions

In your opinion, what does the future of banking look like — and where do you see BPI in this said future?

The future of banking will still focus on digitalisation and sustainability. New technology and new players in the industry will come in, impacting the competitive landscape.

The number of digital savvy and young consumers who may view banking services differently from the traditional view of previous generations will increase.

On the other hand, we see an evolving regulatory landscape with the thrust toward digitalisation, sustainability, and financial inclusion of the BSP (Bangko Sentral ng Pilpinas or the central bank) and SEC (Securities and Exchange Commission). New laws may affect the traditional operating model, credit card caps, amongst others.

As for BPI, aside from our digital transformation journey, we will continue to focus on customer obsession.

Likewise, we shall move forward with sustainability as core to our business and an integral factor on how we make decisions. We will remain focused on banking excellence anchored on trust and the best digital offers.

Committed to promoting financial inclusion in the country, we are determined to make banking products and services more accessible to more people.

Interface of BPI’s new mobile app, launched this 2023.

WITH ACTIONS WE SHAPE THE FUTURE We b e l i e v e p e r s e v e r a n c e i s t h e k e y t o s u c c e s s .

With the capability to act, Cathay United Bank constantly rise toward the distant goal, w i n n i n g m a r v e l o u s a c c o m p l i s h m e n t , h o n o r, a n d r e c o g n i t i o n .

S u c h c o m m i t m e n t a n d f a i t h w i l l l e a d u s t o n o t c h u p a n o t h e r v i c t o r y.

2022

2022

2022

Asian Banking & Finance

Asian Banking & Finance

Asian Banking & Finance

Taiwan Domestic Project Finance Bank of the Year

Taiwan Domestic Cash Management Bank of the Year

Taiwan Domestic Trade Finance Bank of the Year ASIAN BANKING & FINANCE | Q3 2023 13

INTERVIEW

Maybank’s Alvin Lee reveals changes in investment behaviour, wealth preservation Globalisation is no longer the best strategy for banks if they wish to thrive in the new era of investing.

SINGAPORE

T

he age of cheap money is over. Likewise, investors’ priorities on where to park their wealth moving forward have also transformed in the past three years - with health and ESG as key considerations.

“The pivot from just pure profit making endeavors, to investing in something that will help to preserve the well-being of the investors and their family was quite stark,” Maybank’s Alvin Lee told Asian Banking & Finance.

The head of Group Wealth Management and Community Financial Services at Maybank was answering a question on the current state of investing and wealth management in Asia and he added, “There was a realisation that wealth was not everything, [that] health was important.” Gone were the days when globalisation was the only key strategy that banks needed to heed.

“We have entered into a multi-year period when investors have to be used to higher inflation, higher interest rates, and more protectionism amongst the different countries,” Lee said.

Here are more interesting observations on the changing priorities of investors and wealth management customers that came to light in this interview.

It’s understandable that during the pandemic and the geopolitical crisis after, some investors may have adopted a cautious approach. In 2023, does such caution continue to reign or influence investment attitudes?

If we are strictly looking at 2023, we were just coming out of the pandemic, and then we entered into the Ukraine-Russian war, so energy prices rose. Just as we thought that things were okay, we saw Silicon Valley Bank failing, and then now a bit of an issue with the Swiss private banks. We kind of moved from one problem into another.

I do think that at some point, the noise will die down, and then the longer-term mindset will kick in. Asian investors have to get used to higher inflation and higher interest rates, lower level of globalisation and global credit. Asian investors will continue to increase in savviness in investing; they’ll be increasingly international. Whether this international means going all the way to Europe or America or more international within the region, it is bound to happen. And there are certain other developments like in the National Security Law in Hong Kong that will lead some mainland Chinese to look at ways to diversify their wealth.

What are the current concerns influencing investment attitudes in 2023?

The current hot topic about how AT1 bonds have kind of eroded in value will create some anxiety in risk appetite.

Some investors might then say, ‘Look, if this can happen to AT1, what about CT bonds? What about my equity?’

Definitely, we do expect the anxiety level to remain elevated. Once the dust settles, the appetite will eventually come back, just that the investors have to get used to a fairly different paradigm than before. Before the AT1 issues

14 ASIAN BANKING & FINANCE | Q3 2023

Alvin Lee, head of Group Wealth Management and Community Financial Services at Maybank

surfaced, we did see increasing interest in private markets, whether these are private equity or private bonds. This could also be driven by the fact that the rates have increased in the past when interest rates are at zero or close to zero. Anything that pays 2% to 3% was enough to entice the customers.

Given a different landscape now, I think an interest in the private market could be the way forward.

Wealth management and in particular private banking is still a people business

What digital services or digital journeys do Asian investors now seek?

I firmly believe that wealth management and in particular private banking is still a people business. Very few of us would wake up in the morning and decide to buy a mutual fund or buy a bond, right? We still need our relationship managers to put certain ideas in front of us before we act.

There aren’t enough investors who would know exactly what to do given the fact that they would have their day jobs as well. In the foreseeable future, at least, with this current generation of investors, it’s still a people business.

If you fast forward to 30 years later, when our children are in our position and they are very used to using digital means to make their own decisions and dealing with boards and online channels, then it will be a different backdrop altogether. But even today, we did notice that investors would love to communicate via digital channels. Once certain ideas are ingrained in them, they don’t mind dealing online.

INTERVIEW What has Maybank done to meet these new needs and future-proof its services?

We are very conscious that we need to avail [ourselves of] digital capabilities. I looked at digital capabilities in the wealth management space and categorised it into three pillars. Number one, we must give customers access to the investment portfolios and balances online. Number two, over time, we must avail [ourselves of] more and more transactional capabilities. Number three, we must use digital channels to communicate, to push out ideas, and for them to reverse inquiries at the same time. So, out of these three pillars, Maybank has done one and three, and we are building the transactional capabilities.

How has the topic of sustainability changed investors’ views and strategies on where to allocate their money?

There’s definitely an increased awareness for environmental and social agenda. Although, I believe Asian investors are behind the curve compared to their Western counterparts. In particular, the Europeans are a little bit more aware of ESG than Asian investors. But there’s definitely increased awareness.

I think we are at the stage where Asian investors are still looking for a certain return from the ESG solutions. A typical Asian investor would be quite prepared to forgo a small percentage of the potential return for an ESG solution, but not the entire return.

My personal view is that, over time, that desire to do more purely ESG solutions, or invest purely in ESG solutions will increase.

Has Maybank changed or pivoted its wealth management strategy over the past three years? What are your current priorities?

The younger generation will have a slightly different perspective on investing. They would be more prepared than their parents to invest in social causes or environmental causes. Engaging the younger generation is [also] quite different than engaging with their patriarchs and their matriarchs. So, over time, we will have to pivot from just relying on human beings to a more digital means.

In the short term — over the next three years — it is about ensuring that we continue to generate returns above benchmark consistently for our customers, and that’s something that we’ve achieved.

And the way we do it is not just RMs [relationship managers] propagating ideas, our investment consultants have the key objective of ensuring that their customers are profitable. So while it is safe to say that the RMs carry revenue targets, our ICs [investment consultants] carry performance targets. There are checks and balances and that’s how we ensure our customers are able to make a profit consistently.

Going forward, it is important for us to create a unique value proposition. For Maybank, there are two key strategic thrusts. Given the fact that we have got a big pool of business banking customers, we want to be wealth managers or private bank service providers for these entrepreneurs.

The other one is outside of GCC [Gulf Cooperation Council countries]. Maybank is the largest Islamic finance service provider. We want to see whether [or not] we can create an Islamic Wealth Management proposition to serve the increasingly wealthy Muslim populations in the region.

It is important for us to create a unique value proposition

Reports by Capgemini and Oliver Wyman both note that women increasingly control more wealth, yet many firms falter at winning their mindshare. What can you say about this?

At least for Maybank, we don’t differentiate gender, we don’t differentiate ethnicity. Every customer is important.

We definitely need to profile our customers correctly, and then assign the RM with hopefully the right personality to the respective customers. Also, not having a cookie cutter investment strategy recommendation. It is really about risk appetite preferences in specific asset classes or specific geographical exposures that we then take away, and then curate an investment strategy or portfolio for our customers.

Whether it is women increasingly being more in control of wealth management for customers, or the younger people having a bigger say in the family, we know we are taking all this on board and dealing with them accordingly.

What new or revamped wealth products or services does Maybank offer to meet investors’ renewed needs?

One product that we’re proud of is our investment product that offers three share clusters. We enable customers who are in the early stage of work life to invest — that’s Class A share.

And then this will then evolve into a capital appreciation play in the Class B, when they mature into middle age, right. And then over time, you will then evolve into a Class C share type, where they can accumulate and then use their investments and the profit thereof, for the retirement needs.

And it’s not just for people who are just new in the market. This product actually can be of value to clients who are already in the retirement stage. So, that product [that] was very successful is a partnership with Fullerton Asset Management exclusively.

Where is the wealth management industry headed? In your opinion, what can we expect to see in this space beyond 2023?

Competition in this space will only continue to increase.

It’s safe to say that given the increase in wealth in Asia, in particular, the industry will be very competitive.

It is important for wealth management players to find an innovative way to serve customers; a different proposition than the rest of the industry. For us at Maybank, it is the entrepreneur group of customers that we want to serve very well. And Islamic wealth management is another engine that we intend to develop and grow.

For us at Maybank, it is the entrepreneur group of customers that we want to serve very well (Photo from the official Maybank Singapore)

ASIAN BANKING & FINANCE | Q3 2023 15

FINANCIAL INSIGHTS: AT-1

SG banks strong and stable despite uncertain AT-1 issuance market – experts They may face higher funding costs as lenders could demand higher risk premiums on AT-1 papers.

SINGAPORE

S

ingapore banks have a stronger resilience compared to their Asian counterparts, so experts say. But just how strong they are and how easily they adapt to global banking crises are occasionally put to the test.

The zero write-off of Credit Suisse’s Additional Tier-1 (AT-1) bonds presented concerns over the impact of AT-1 bond losses on global banks. Although Asian banks are less likely to be dramatically affected, it pays to see how and why Singapore banks stand in the wind.

Credit Suisse’s AT1 write-down AT-1 bonds are a type of hybrid debt that can be converted into equity if a predetermined event occurs, acting as an additional capital and buffer for banks. That’s why Credit Suisse’s $17-billion write-down of AT-1 notes early this year caused such a stir in the industry.

The “Lion City” has been marked to have a lesser chance of following in the footsteps of the AT-1 writedown of the Swiss bank, according to Gary Ng, senior economist at Natixis Corporate & Investment Banking.

“Singaporean banks have higher ratings than Asian peers with minor AT-1 bond price movement and low reliance on AT-1, and therefore the impact is limited to credit ratings. Based on our calculation, DBS and OCBC’s AT-1 to Common Equity Tier 1 (CET 1) ratio is around 5%, lower than the average level of 14% in Asia,” Ng told Asian Banking and Finance.

He emphasised that Singapore’s AT-1 bond coupon rate is one of the lowest in the region at 3.6%. Thus, a slight increase would not have a great impact on general funding costs.

Yet, amid these developments, complacency is not the right attitude.

Asian banks with a global footprint or those said to have significant holdings in AT-1 instruments experienced notable declines.

16 ASIAN BANKING & FINANCE | Q3 2023

Gary Ng

A slight increase would not have a great impact on general funding costs

Luckily for other banks, the fall was relatively modest. Whilst it cannot be claimed that Asia is completely shielded, it is at least not in the direct path of a severe storm, Natixis CIB stated in its research note.

“Besides, the sell-off is more intense for Asia’s banks with lower credit ratings. In this context, Singapore and South Korea are relatively better. Even if its credit rating is lower, the market perceives China to have limited financial links with global banks,” the note added.

The challenge Singapore banks tend to face in this scenario is higher funding expenses as lenders could demand higher risk premiums on AT-1 papers, Ng said.

Singapore banks’ niche Singapore is one of the two markets in Asia that practice statutory bailin regimes to ensure no creditor worse off (NCWO) coverage in times of resolution.

According to CreditSights, the absence of a loss absorption hierarchy makes it unclear when a statutory bail-in regime is also existing. However, banks are mandated to carry resolution plans on what can be solved.

The Swiss Financial Market Supervisory Authority (FINMA) defines an NCWO as safeguarding the rights of creditors which can be impacted by a resolution. Thus, under the NCWO principle, creditors should not suffer a more unfavourable outcome from a restructuring compared to what they would have experienced if the bank had been liquidated.

S&P Global Ratings said predicting precise outcomes can be challenging at times, particularly in the Asia Pacific region where the application of bail-in concepts has not undergone extensive testing.

“When a bank is under stress the factual circumstances are

Skyscrapers of major banks in Singapore located in the Marina Bay Financial Centre (Photo by Agence France-Presse)

FINANCIAL INSIGHTS: AT-1 AT-1 issuance market, Singapore banks remain strong and stable

Headquarters of the Swiss investment bank UBS on Bahnhofstrasse street (Photo by UBS Global)

idiosyncratic and depend on the magnitude and nature of the problem and the consequences if it is not solved. Further, bank regulators and public authorities maintain significant clout in normal times but have typically even more clout in stressful times. Regulators and public authorities have considerable powers and a range of tools at their disposal,” a report by S&P Global Ratings said.

Yet, the Swiss regulator did not undergo a resolution process, rather a point of non-viability (PONV). The PONV scenario is often left as an open discussion by regulators. This leaves more room for interpretation of which events are considered infeasible and gives monetary authorities the pliability to write off AT-1 notes similar to FINMA. “In a certain situation, if a limited amount of capital is required, regulators would be able to impose PONV and write off the AT-1 bondholders without going through a resolution process, and therefore, without shareholders facing losses first. We do expect, unlike in the case of FINMA, that APAC regulators will use the PONV clause if required in situations where they have to arrange for capital support and not for situations where they arrange for liquidity support,” explained CreditSights.

Singapore is known to strictly comply with its NCWO framework that creditors who receive a lower amount during a resolution process compared to what they would have received if the bank had been liquidated, can seek

reimbursement for the shortfall from a resolution fund provided by the financial industry.

“The creditor compensation framework will also apply in the exceptional situation where MAS departs from the creditor hierarchy in order to contain the potential systemic impact of the [financial institution’s] failure or to maximise the value of the [financial institution] for the benefit of all creditors as a whole,” the Monetary Authority of Singapore (MAS) said in a statement.

It is important to note that AT-1 papers are strictly offered in Singapore’s wholesale market.

Only institutional and accredited investors, or transactions in denominations worth more than S$200,000 can access this type of bond or investment.

On the other hand, the

MAS, being the central bank, continued to remind financial institutions that investors shall and always be informed of their offerings, especially AT-1bonds.

Further, pressing on the fact that disclosures, features and risks should be kept clear and concise.

Issuance in the future Natixis’ Ng said Singapore banks issuing AT-1 bonds in the regulatory environment are all about “confidence and predictability.”

“The monetary and financial regulations imposed by MAS are already one of the most stringent in the world to provide for a stable financial environment, and the stability could benefit local banks when competing with other banks in the market,” he said.

Despite numerous banks putting a halt to their AT-1 issuances in the aftermath off the Credit Suisse incident, some are now slowly getting back in the grind.

“There is no new issuance from Singapore after the UOB’s deal in January 2023. In the medium run, Singaporean banks are likely continuing their issuance once sentiment improves,” Ng said.

Such an outlook suggests that in the face of uncertainties in the AT-1 issuance market, Singapore banks remain strong and stable.

And that’s because their resilience and adaptability during global banking crises is built-in, proving once again why they stand tall amidst the winds of change.

The UBS-acquired Swiss bank’s main office in Zurich, Switzerland

ASIAN BANKING & FINANCE | Q3 2023 17

RANKINGS: APAC bank in APAC by asset size. Nomura Holdings entered the rankings, replacing Fukuoka Financial Group, which dropped out.

Lower central-bank deposits and a slowdown in lending to pandemichit borrowers sapped balance sheets, said S&P analysts Yuzo Yamaguchi and Mohammad Taqi.

Japanese banks are not off the hook in 2023 as assets of the lenders are likely to fall again this year, warned Takahide Kiuchi, executive economist at Nomura Research Institute.

This follows after the end of a three-year government-backed COVID-19 loan programme.

The country’s new central bank governor will not do them any favors, either. The Bank of Japan Governor Kazuo Ueda has already signaled that interest rates will remain below zero for longer, S&P said.

People’s Bank of China (Photo by Max12Max via Wikimedia Commons)

Japanese banks’ assets drop as China thrives

S&P Global’s 2023 report reflect how lower deposits and a drop in lending has taken their toll on Japanese lenders and other banks in the list.

C

hinese banks continue to reign supreme over Asia Pacific as the region’s largest lenders whilst most of Japan’s biggest banks saw their rankings fall in the 2023 edition of S&P Global Market Intelligence report.

The report reflects how Chinese banks maintained their dominance in the region, solidifying their positions as the largest banks both locally and globally in terms of asset size.

The Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China remained the four biggest banks in Asia Pacific and in the world. Their combined total assets grew 4.1% in 2022, to over US$19.87t.

A total of 23 mainland China banks appeared in the APAC list, with one newcomer: Huishang Bank Corporation, which ranked in the top 50. Not including Huishang

18 ASIAN BANKING & FINANCE | Q3 2023

Chinese banks maintained their dominance in the region

Mohammad Taqi

Takahide Kiuchi

Bank, the total assets of the 22 remaining Chinese banks grew 2.4% to US$35.38t.

Japanese banks’ assets may drop further Whilst Japan remained the Asian country with the second highest number of banks in the S&P list, and the second highest by combined assets, most of its banks saw their rankings fall in 2022: five lenders fell in ranking, while one bank completely dropped out of the Top 50.

Not including new entrant Nomura Holdings, the combined total assets of seven Japanese banks that appeared in the 2022 list tumbled 8.8% over the year. The Norinchukin Bank had the biggest slump at 18.8%, according to data compiled by S&P Market Intelligence.

The sole exception was Mizuho Financial Group, which climbed one spot to rank the eighth largest

Resilient banks Assets of banks from South Korea and Australia appearing on the S&P list showed moderate growth in 2022.

The total assets of the six South Korean banks in the Top 50 grew 1.2% to US$2.69t by end-2022.

Movement was mixed amongst the lenders, KB Financial Group and Hana Financial Group, both of which climbed one spot up the rankings.

In contrast, NongHyun Financial Group and the Industrial bank of Korea declined. Shinhan Financial Group and Woori Financial Group retained their spots at Nos. 29 and 38 for biggest bank in APAC by asset size, respectively.

S&P also had Australian banks listed with their combined assets rising 0.2% to US$3.15t by the end of the year. Commonwealth Bank of Australia, the country’s largest bank by assets, rose one spot to rank 18th overall in APAC. The National Australia Bank also jumped two places to occupy the 22nd spot, whilst Macquarie Group rose to 45th place.

ANZ Group and Westpac Banking Corporation, meanwhile, fell in rankings, to 23rd and 24th, respectively. S&P Director for Financial Institutions Ratings Nico de Lange expects Australian banks’ credit losses to remain low over the next two years, at 0.15% of total loans.

RANKINGS: APAC Current rank^

Previous rank^^

Current vs. previous

Company (ticker-exchange)

Headquarters

Accounting principle

Total assets (US$B)

1

1

NC

Industrial and Commercial Bank of China Ltd. (1398-SEHK)

Mainland China

IFRS

5,742.86

2

2

NC

China Construction Bank Corp. (939-SEHK)

Mainland China

IFRS

5,016.81

3

3

NC

Agricultural Bank of China Ltd. (1288-SEHK)

Mainland China

IFRS

4,919.03

4

4

NC

Bank of China Ltd, (8988-SEHK)

Mainland China

IFRS

4,192.12

5

5

NC

Mitsubishi UFJ Financial GroupInc. (8306-TSE)

Japan

JapaneseGAAP

2,967.91

6

8

Postal Savings Bankof China Co. Ltd, (1658-SEHK)

Mainland China

IFRS

2,039.56

7

6

Sumitomo Mitsui Financial Group Inc. (8316-TSE)

Japan

JapaneseGAAP

2,006.75

8

9

Mizuho Financial Groupinc. (8411-TSE)

Japan

JapaneseGAAP

1,909.35

9

10

Bank of Communications Co, Ltd, (3328-SEHK)

Mainland China

IFRS

1,883.72

10

7

JAPAN POST BANKCo. Ltd, (7182-TSE)

Japan

Japanese GAAP

1,719.92

11

11

NC

China Merchants Bank Co. Ltd, (600036-SHSE)

Mainland China

IFRS

1,470.00

12

12

NC

Industrial Bank Co, Ltd, (601166-SHSE)

Mainland China

PRCGAAP

1,343.54 1,324.07

13

13

NC

The Hongkong and Shanghai Banking Corp. Ltd,

Hong Kong

Hong Kong FRS

14

14

NC

China Citic Bank Corp. Ltd, (288-SEHK)

Mainland China

IFRS

1,239.28

15

15

NC

Shanghai Pudong Development BankCo, Ltd. (600000-SHSE)"*

Mainland China

IFRS.

1,184.28

16

16

NC

China Minsheng Banking Corp. Ltd. (600016-SHSE)

Mainland China

IFRS

1,051.97

17

17

NC

China Everbright Bank Co. Ltd, (601818-SHSE)

Mainland China

IFRS

913.49

18

19

Commonwealth Bank of Australia (CBA-ASX)

Australia

Australian IFRS

837.21

19

20

Ping An Bank Co, Ltd, (000001-SZSE)

Mainland China

PRCGAAP

771.55

20

18

The Norinchukin Bank

Japan

Japanese GAAP

753.26

21

22

State Bank of India (SBIN-NSEI)

India

Indian GAAP

694.94

22

24

National Australia Bank Ltd, (NAB-ASX)**

Australia

Australian IFRS,

679.76

23

21

ANZ Group Holdings Ltd, (ANZ-ASK)**

Australia

Australian IFRS

669.66

24

23

Westpac Banking Corp. (WBC-ASX)**

Australia

Australian IFRS,

653.39

25

26

KB Financial Group inc. (A105560-KOSE)

South Korea

Korean IFRS

557.54

26

25

Resona Holdings Inc, (8308-TSE)

Japan

Japanese GAAP

557.10

27

30

DBS Group Holdings Ltd, (D05-SGX)

Singapore

Singapore FRS

554.40

28

28

NC

HuaXia Bank Co. Ltd, (600015-SHSE)**

Mainland China

PRCGAAP

540.04

29

29

NC

Shinhan Financial GroupCo. Ltd, (A055550-KOSE)

South Korea

Korean IFRS

537.44

30

31

China Guangfa Bank Co. Ltd.***

Mainland China

PRCGAAP

528.91

31

27

Sumitomo Mitsui Trust Holdings Inc. (8309-TSE)

Japan

Japanese GAAP

516.83

32

32

Bankof Beljing Co. Ltd. (601169-SHSE)

Mainland China

PRCGAAP

491.21

33

34

HanaFinancial Group Inc. (A086790-KOSE)

South Korea

Korean IFRS

452.34 417.61

NC

34

36

Oversea-Chinese Banking Corp. Ltd, (039-SGX)

Singapore

Singapore FRS

35

33

Nonghyup Financial Group inc.

South Korea

Korean IFRS

417.37

36

37

Bank of Jiangsu Co, Ltd, (600919-SHSE)**

Mainland China

PRCGAAP

410.83

37

35

38

38

Bank of Shanghai Co. Lt, (601229-SHSE)**

Mainland China

PRCGAAP

405.13

NC

Woori Financial Group inc. (A316140-KOSE)

South Korea

Korean IFRS

382.05

39

39

NC

ChinaZheshang Bank Co. Ltd, (2016-SEHK)

Mainland China

IFRS

380.14

40

40

NC

United Overseas Bank Ltd, (UTI-SGX)

Singapore

Singapore FRS

376.07

41

-

Nomura Holdings Inc. (8604-TSE)

Japan

US GAAP

373.41

42

41

Industrial Bank of Korea (A024110-KOSE)

South Korea

Korean IFRS

343.49

43

43

Bank of Ningbo Co. Ltd, (002142-SZSE)

Mainland China

PRCGAAP

343.05

44

42

Standard Chartered Bank (Hong Kong) Ltd

Hong Kong

Hong Kong FRS

317.80

45

47

Macquarie Group Ltd, (MAG-ASK)**

Australia

Australian IFRS

313.47

46

44

HDFC Bank Ltd, (HDFCBANK-NSEI)*

India

Indian GAAP

308.14 273.28

NC

47

45

Bankof Nanjing Co. Ltd, (601009-SHSE)**

Mainland China

PRCGAAP

48

46

CTBC Financial Holding Co. Ltd. (2891-TWSE)

Taiwan

Taiwanese FRS

251.31

49

49

China Bohai BankCo. Ltd. (9668-SEHK)

Mainland China

IFRS

240.60

50

-

Huishang Bank Corp. Ltd, (3698-SEHK)

Mainland China

IFRS

229.11

NC

As of 18 April 2023, NC=no change, dash indicates the company was not a partofthe top 100 banks in the previous ranking ^ Pro forma for mergers as of March 31, 2023 ^^ Not adjusted for pending or completed acquisitions ordivestitures in the previous ranking published on April 19, 2022 * Data is as of March 31, 2023 ** Data is as of Sept. 30, 2022 *** Data is as of Dec. 31, 2021 1 Financial data adjusted forthe pending sale of Marquee Commonwealth Bank PlaceAssat 2 Financial data adjusted for the pending sale of Client base ofAustralia and New Zealand Banking Group Ltd Total assets are as of Dec. 31,2022, unless stated otherwise.

The banks are ranked by total assets for the most recent period available. Only one institution per corporate structureIs included in the ranking. Rankings account for completed and pending bank deals in which the assets sold are in excess of $300 million or the deal value is in excess of $200 million.

Only one institution per corporate structureis included in the rankings.

Details reported in native currencies and corvertad to USdollars using and-of-period exchange rates.

Companies classified by SSP Global Markat Intelligence as “banks” or “savings banks/thrifts/mutuals,” companies regulated in the US as bank halding companies, or any financial holding companies with significant banking subsidiaries are included in these rankings.

Export-Import Bank of China and Shinkin Central Bank and Korea Development Bank were excluded fram the rankings due to the nature of their businass models.

Source: S&P Global Market Intelligence

ASIAN BANKING & FINANCE | Q3 2023 19

BANK RANKINGS: SINGAPORE Notably, in a report by Bloomberg made last 8 June, Standard Chartered is implementing targeted job cuts in Singapore, Hong Kong, and London as part of its cost reduction strategy, aiming to save about $1.35b by 2024.

The bank recently initiated job reductions in middle office areas such as human resources and digital transformation in Asia.

This information comes from undisclosed sources who wish to maintain privacy.

Furthermore, according to another source, some junior staff members will also be affected.

While the exact figure is yet to be determined, the total number of job cuts is expected to exceed 100.

Despite the outgoing and incoming talents in this major industry, it is vital to understand the key trends in the hiring environment because employees naturally come and go for various reasons.

Hence, it is the responsibility of employers to keep in check what makes employees stay.

In recent years, more Singaporeans find their personal well-being of top importance

Singapore banks champion employee well-being, upskilling Asian Banking and Finance’s new ranking of Singapore banks reflects top notchers’ steady growth and adaptability to changing landscape.

B

anks in the lion city have continued to grow for the fiscal year 2022, garnering a 3.4% year-on-year (YoY) increase based on the Asian Banking and Finance’s annual bank rankings.

The bank rankings, which reflect the employment hiring situation of select banks in Singapore, had a change in methodology. Banks in the list have been categorised according to percent changes from the previous year’s tallied figures.

This facilitated a sounder way of ranking them amidst the difference in their respective employee populations.

With the new ranking process in place, Credit Agricole CIB. registered the highest annual increment of 20.3% YoY to 1,686 employees, taking the top spot in terms of employee growth.

20 ASIAN BANKING & FINANCE | Q3 2023

It is vital to understand the key trends in the hiring environment because employees naturally come and go

Wong Keng Fye

The 2023 ranking had HSBC Banking Corp. at number 2 with a growth rate of 20.0% to increased employment of 3,890, followed

by United Overseas Bank (UOB) at number 3 with an increment of 11.7% to 10,056 employees.

Trailing them at No. 4 was Maybank Singapore with a 5.1% growth and 2,101 employees.

Bucking the growth trend, banks which saw big dips were UCO Bank (11.9% to 37), State Bank of India (5.6% to 117), and DBS Bank (4.6% to 12,000).

In terms of tally count, the top five banks in order would have started with OCBC, DBS Bank, UOB, Citi Singapore, and Standard Chartered.

However, in the case of Citi Singapore and Standard Chartered, Asian Banking and Finance did not receive any response in press time.

Employees’ well-being In recent years, more Singaporeans find their personal well-being of top importance. According to a survey by professional services firm Aon, about 78% of Singapore-based employees stated their well-being has become a bigger priority since 2020.

This was above the region’s average of 48% stating that their well-being has risen atop their priority list. However, only 35% of Singapore employers rated the overall well-being of their company as “excellent or very good.”

Asian Banking and Finance reached out to Singapore’s banking institutions to find out how they can improve their employees’ health and skills, and secure their future in the work environment.

Maybank Singapore, for example, is particularly concerned about seeking the success of its employees, according to its head of human capital, Wong Keng Fye. He emphasised that human beings now purposefully look for meaning in their careers and do not just seek plain employment. “I think it’s important that employees recognise and have a sense of purpose in

BANK RANKINGS: SINGAPORE whatever they want to do,” Fye said.

He said employees look beyond just the dollars and cents. “They’re looking at the ratio of quality of life, sustainability, and if the organisation is providing opportunities, career development, and of course, will enrich their ability to work from home,” Fye added.

In another study by Randstad – a global human resources services firm – results showed that about 48% of Singaporeans would not take a job if it does not offer a hybrid set-up or the option to choose whether to work at home or in the office.

UOB is one of those financial institutions that has come to value the work-life balance setup. “UOB is the first Singapore bank to officially implement our hybrid working policy on a permanent basis for our employees in July 2022, offering flexibility for colleagues in eligible roles to work from home or at a location other than the assigned work within the city of their work location,” said Dean Tong, head of Group HR at UOB. Now that more than 50% of UOB’s employees practise its hybrid working policy, its internal annual engagement survey reflected a large increase in productivity scores, said Tong.

Employers adapt It is very much emphasised by these human resource managers that a good working environment would equate to a productive workforce.

But they also agree that it is of utmost importance to see a person beyond their employment.

ZiYing Wu, Head of Human Resources Crédit Agricole CIB Singapore, told Asian Banking and Finance that they launched the Employee Assistance Programme (EAP) for their staff to avail themselves of confidential and professional services.

If employees get to experience personal or work-related stresses, the EAP is an avenue for them to have any mental or physical health issues addressed.

Similarly, Maybank, UOB and HSBC Singapore have each established a counselling service for their workforce to remedy the damaging effects brought upon by

the COVID-19 on people’s lives.

Noting the opportunities they have opened for employees to access mental health support, Fye said, “We also try to train a group of Maybank bankers... to respond and advise them.” Over the past few years, Maybank has had over 10 employees across various departments trained to counsel staff with privacy afforded utmost value and respect. “Of course, we want to know if we can help. But sometimes the staff doesn’t want to talk, and we respect the privacy of others if they choose not to,” said Fye. Working environment According to these Singapore bank employers, there has been a higher demand for jobs within the environmental, social and governance (ESG) landscape as well as the technology sector.

UOB’s Tong observed that roles in technology, anti-money laundering (AML) compliance, sales, services and operations saw greater attraction for applicants.

“We are making sure our employees are equipped with future-ready skills, too. This can be seen through the various programmes that we have implemented such as our groupwide flagship training programme, BetterU, to invest in upskilling and reskilling our people,” Tong said.

UOB also began its Group Technology and Operations

Dean Tong

Ziying Wu

Mukul Anand

We are making sure our employees are equipped with future-ready skills,too

Academy last year which upskills and certifies their estimated 6,000 technology and operations workforce in areas such as cybersecurity, software and infrastructure, Tong said.

On the other hand, Crédit Agricole CIB’s Wu said that more job opportunities in ESG for the banking sector signal the greater push toward carbon neutrality.

Notably, the French international bank said it hired its very first Singapore-located sustainable banking teammate in 2022.

“As we see a growing importance and need in this area, we envision that this could be the start of a growing sustainable banking team in Singapore, enabling us to better support our clients with their sustainable finance strategy in line with our bank’s leadership as a pioneer in sustainable finance and our group’s targets to accelerate the transition to achieve carbon neutrality by 2050,” Wu said.

Mukul Anand, head of human resources at HSBC Singapore, said the bank is committed to boosting the skills of young talents in Singapore. Its Global Graduate programme participants in Singapore surged 35% in 2023, whilst university and polytechnic work placement programmes also jumped 33%.

“Our people are our greatest asset and we are committed to helping them develop skills for the future,” said Anand.

Employees look at the ratio of quality of life, sustainability, and if the organisation povides opportunities

ASIAN BANKING & FINANCE | Q3 2023 21

BANK RANKINGS: SINGAPORE 2023 Ranking

Bank

Percent Change

Number of employees end-2022

Number of employees end-2021

2022 CEO or Country Head

1

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

20.3%

1,686

1,402

Jean-Pierre Michalowski

2

HONG KONG AND SHANGHAI BANKING CORPORATION

20.0%

3,890

3,242

Wong Kee Joo

3

UNITED OVERSEAS BANK

11.7%

10,056

9,000

Wee Ee Cheong

4

MAYBANK SINGAPORE

5.1%

2,101

2,000

John Lee

5

OVERSEA-CHINESE BANKING CORP

4.7%

12,000

11,461

Helen Wong

6

RHB Singapore

-0.8%

646

651

Danny Quah

7

DBS BANK

-4.6%

12,000

12,585

Piyush Gupta

8

STATE BANK OF INDIA

-5.6%

117

124

Jamneshwar Pamidimukkala

9

UCO BANK

-11.9%

37

42

Gourab Chatterjee

--

CITI SINGAPORE*

--

~8,500

~8,500

Tibor Pandi

--

STANDARD CHARTERED BANK*

--

6,000

6,000

Patrick Lee

--

BNP PARIBAS*

--

2,200

2,200

Joris Dierckx

--

BANK OF CHINA*

--

955

955

Cheng Jun

--

CIMB BANK*

--

925

925

Victor Lee Meng Teck

--

MIZUHO BANK*

--

>700

>700

Guan Yeow Kwang

--

ICICI BANK*

--

90

90

Sachin Kumar

--

BANK OF INDIA*'

--

77

77

Geetha Nagarajan

TOTAL

3.4%

61,980

59,954

Legend *Info retained from 2022 rankings ~ About < Less than > More than 22 ASIAN BANKING & FINANCE | Q3 2023

ASIAN BANKING & FINANCE | Q3 2023 23

BANK RANKINGS: HONG KONG

Job losses loom in Hong Kong banks as focus turns to productivity Many senior roles were laid off, and banks also set informal hiring freezes, experts said.

employed a slightly higher number of people by the end of 2022 compared to the previous year.

OCBC Wing Hang added over 400 new people to its Hong Kong team; DBS Hong Kong’s total employee count is over 50 people higher than in 2021; and Dah Sing Bank saw numbers rise by over 30 people.

Tai Sang Bank, the smallest bank in the rankings, now employs 38 people versus the 36 employees in 2021. Tai Sang Bank operates out of a single branch at Des Voeux Road Central and does not offer any online banking or ATM services.

Hang Seng Bank, celebrating its 50th anniversary in 2023, said that they are focusing on talent development priorities and equipping its workforce with future-oriented skills

B

ankers seeking a job in Hong Kong should brace themselves for obstacles as financial institutions slowed investment for human resources.

The year of 2022 saw hiring slow and roles get cut, although the overall numbers did not register any dramatic falls. Data gathered

by Asian Banking & Finance revealed that there are a total of approximately 78,576 individuals working across 17 banks in the city as of end-2022. This is marginally lower when compared to combined total headcounts of the 17 banks in end-2021, when there were 79,710 people employed by the banks.

HSBC, Bank of China (Hong Kong), and Hang Seng Bank remain the three largest banks in Hong Kong in terms of the number of people employed. HSBC and Hang Seng Bank had slightly lower headcounts compared to the past year. Based on the numbers, HSBC cut another 500 jobs in Hong Kong; whilst Hang Seng Bank’s headcount fell by 600 people.

Speaking to Asian Banking & Finance, a representative from Hang

24 ASIAN BANKING & FINANCE | Q3 2023

People are our most important asset.

We continue to invest in developing our colleagues

Seng bank, which is celebrating its 90th year anniversary in 2023, shared that the bank is focusing on promoting its talent development priorities and equipping its workforce with future-oriented skills.

“People are our most important asset. We continue to invest in developing our colleagues through structured programmes and equip them with future-skills to support their growth. We maintain an agile approach to people resources management to meet business needs and build talent pipelines,” the representative said in a statement via e-mail correspondence.

“One of the examples is recruitment through graduate and Management Trainee recruitment programmes. We also focus on promoting our talent development priorities, especially for local talents, to cultivate young talents to become banking professionals,” the representative added.

Bank of China (Hong Kong), meanwhile, employed 12,190 staff as of end-2022.

OCBC Wing Hang Bank, DBS Hong Kong, and Dah Sing Bank all

Runners-up The rest of the banks saw their numbers fall or remain the same.

The Bank of East Asia, Limited saw their headcount fall below 5,000 people to 4,883. Chong Hing Bank roughly employed the same number of people by end-2022 compared to a year earlier, but moved up two spots in the rankings of largest banks by employee count as both Shanghai Commercial Bank and CMB Wing Lung Bank cut numbers in 2022. Shanghai Commercial Bank employs 200 people less as of end-2022, and CMB Wing Lung Bank 100 people less.

Of the five banks in the Hong Kong Bank Rankings with the largest staff employed in the city, Standard Chartered Bank was the only one who did not disclose their numbers as of press time.

Media reports in early June alleged that the bank has begun laying off employees across Singapore, London, and Hong Kong as part of an existing plan to cut costs by more than $1b in 2024, with the number of jobs cut possibly exceeding 100.

Hiring freezes Hiring experts revealed to Asian Banking & Finance that there is an informal hiring freeze and some layoffs as Hong Kong banks focus on maximizing productivity rather than hiring new employees.

BANK RANKINGS: HONG KONG

John Mullally

OCBC Wing Hang logged the biggest increase in its workforce in 2022, expanding its staff by over 400 people (Photo by Ruayime R OansGunmam via Wikimedia Commons)

“Over the last nine months, it’s definitely slowed down. And then over three months [in 2023], it slowed even further, especially in the wake of happenings in the global investment banking market,” said John Mullally, Robert Walters’ managing director for Hong Kong and South China.

Investment banking layoffs have hit the shores of Hong Kong, although not as much as New York and London. Mullally, in particular, noticed an amount of layoffs at the senior level positions.

“What was seen during the global financial crisis were huge swathes of bankers losing their jobs. We are definitely seeing some layoffs, especially at the senior levels, which are more visible, more noticeable,” Mullally said, adding that whilst there are no “formal” hiring freeze announcements, there was definitely an “informal hiring freeze [or] less hiring activity in general.”

Instead of hiring, banks are focused on maximizing the productivity of their workforce.

Olga Yung, managing director at Michael Page Hong Kong, said that the majority of companies and hiring managers have as their key priority the improvement of cost efficiency and productivity in 2023.

“This is a common theme across a variety of sell side players regardless of size,” Yung told Asian Banking & Finance via exclusive correspondence.

RMs, tech roles still in demand Whilst hiring has slowed down due to overall weak market sentiment and negative news

coming out in relation to various banks, there are still some roles that are in demand for banks.

“Across the sell side, mid to back office operations, compliance risk, finance and audit are constantly in demand for talent,” Yung said.

Private bankers and relationship managers from retail banks are also sought after.

“If you're a relationship manager who can bring in assets, who can move clients, there's still a demand for that. But outside of that, [the demand] is not particularly active,” Mullally said.

Banks are also still looking into hiring quality developers and programmers, as this is a shallow talent pool in Hong Kong, he added.

In 2022, ESG and crypto are two “hot topics” in hiring according to

Olga Yung

Banks are focused on maximising the productivity of their workforce

Yung. ESG remains a hot talking point, but candidates will need relevant exposure to be considered in these positions.

“Before [the] crypto winter arrived, anyone who had experience or interest in crypto is a prospective candidate to the countless digital asset players which have emerged in the market over the recent few years. We saw high levels of hiring and interview activities across the majority of 2022, until the last quarter,” Yung said.

Too little, too late In 2022, the strict travel rules reportedly drove bankers and experts away from Hong Kong.

Hong Kong has since lifted its strict travel restrictions, but the effect is unfortunately nil.

“It definitely increased confidence in the market. The problem is, it happened after the financial services and the investment banking markets really slowed down hiring because of the broader geopolitical challenges in the world and broader economic challenges, such as the looming threat of a global recession,” Mullally said.

“The lifting of the quarantine was very much welcome for Hong Kong as a place for employers and employees. But the challenge now is that not many financial services firms are hiring and they’re certainly not hiring near the level that they hired in 2021,” he added.

HSBC remains the bank with the largest workforce in Hong Kong (Photo source: HSBC official website)

ASIAN BANKING & FINANCE | Q3 2023 25

BANK RANKINGS: HONG KONG 2023 Ranking

Bank

Percent Change

Number of Employees 2023

Number of Employees 2022*

CEO or Country Head

1

OCBC WING HANG BANK

18.61%

2,575

2,171

Ivy Au-Yeung

2

SHANGHAI COMMERCIAL BANK

10.68%

1,672

1,872

David Sek-chi KWOK

3

TAI SANG BANK

5.56%

38

36

Ma Ching Kuen

4

DAH SING BANK

1.09%

3,047

3,014

Hon-Hing Wong (Derek Wong)

5

DBS BANK (HONG KONG) Limited

1.08%

4,500

4,452

Sebastian Paredes

6

BANK OF CHINA (HONG KONG)

0.21%

12,190

12,165

Sun Yu

CITI HONG KONG

0%

4,600

4,600

Aveline San

CHINA CITIC BANK INTERNATIONAL

0%

2,000

2,000

Bi Mingqiang

CHONG HING BANK

0%

1,700

1,700

Jianxin Zong and Zhaoxing Zhang

10

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA)

-0.10%

3,000

3,003

Wu Long

11

HONG KONG AND SHANGHAI BANKING CORPORATION

-2.44%

20,000

20,500

Luanne Lim

12

THE BANK OF EAST ASIA, LIMITED

-3.44%

4,883

5,057

Adrian LI Man-kiu and Brian LI Man-bun

13

CMB WING LUNG BANK

-5.71%

1,651

1,751

Hong Bo

14

PUBLIC BANK

-4.76%

1,200

1,260

Tan Yoke Kong

15

HANG SENG BANK LIMITED

-7.98%

7,020

7,629

Diana Cesar

--

STANDARD CHARTERED BANK*

--

6,000*

6,000

Mary Huen

--

CHINA CONSTRUCTION BANK (ASIA) CORPORATION*

--

2,500*

2,500

Jun Zhang

TOTAL

-1.42%

78,576

79,710

7

* as of December 31, 2021; retained from last year's bank rankings

26 ASIAN BANKING & FINANCE | Q3 2023

ASIAN BANKING & FINANCE | Q3 2023 27

CASE STUDY: OCBC ECO-CARE LOAN

One in five of OCBC’s home, renovation, and car loans are now green

The Singapore bank has extended over S$3.5b of green loans in two years and targets a 10% growth in 2023.

S

ingapore has long set its sights on making the crown the world’s greenest city; and its citizens are more than willing to take on the challenge.

In the two years since launching its Eco-Care Loans, OCBC Bank said that it has extended over S$3.5b (US$2.64b). The loan series -available to retail clients looking to purchase a home, conduct renovations, or own a car — offers a range of benefits for those meeting certain green goals and criteria.

“The 2022 OCBC Climate Index Survey found that cost and inconvenience are two major considerations when it comes to consumer’s choices of whether to adopt or incorporate sustainability into their lifestyles,” Phang Lah Hwa, head of consumer-secured lending at OCBC Bank, told Asian Banking & Finance.

“By offering preferential rates, our Eco-Care loans provide consumers with the impetus to take concrete action by making their homes more environmentally friendly or switching to electric cars,” she said.

Green loans now account for one in every five home, renovation, and car loans that OCBC extended from March 2021 to March 2023.

Compared to a regular loan customer, the OCBC offers our Eco-Care loan customers preferential rates and extra benefits.

For instance, Eco-Care home and renovation loan customers can enjoy a one-time S$88 (US$66) bill rebate when they apply for Senoko’s LifeGreen24 plan, shared Lah Hwa. Green cars One major target that Singapore highlighted in its bid to become greener is to encourage take up of electric vehicles or EVs. In its Green Plan 2030, Singapore outlined plans for all new car and taxi registrations to be of cleaner-energy models from 2030; and floated plans to build 60,000 charging points island-wide 28 ASIAN BANKING & FINANCE | Q3 2023

OCBC aims to target an almost 10% year-on-year growth in its Eco-Care Loans (Photo from the OCBC website)

Our Eco-Care loans provide consumers with the impetus to take concrete action by making their homes more environmentally friendly

by the same year, 40,000 of which are in public car parks and 20,000 in private premises.

For its part, OCBC now offers green loans for would-be car owners to encourage them to take up the use of electric vehicles. “We partnered [with] Charge+ to offer Eco-Care car loan customers with three months of free charging credits, and it can be used at more than 700 Charge+ charging points across Singapore,” Lah Hwa stated.

Loan customers staying in landed property can even opt for a complimentary home charging station to be installed at their house instead.

No greenwashing here To ensure that homeowners are eligible for OCBCs Eco-Care Home and Renovation loans, they must first pass the Building and Construction Authority’s Tropical Home Energy Efficiency Assessment (THEEA). As of

writing, OCBC said that it is the only bank that utilises THEEA as a prerequisite to apply for a home or renovation loan in Singapore.

THEEA measures homeowners’ intention to adopt greener alternatives across three categories.

First is home design, such as the use of solar window film, for example.

The second involves the home’s installation of energy-efficient appliances, which equates to those with at least three or four ticks for energy efficiency, said Lah Hwa. The third criteria is whether or not the home has smart home features that regulate energy consumption, such as a smart thermostat for control of the air conditioner.

In the future, OCBC aims to target an almost 10% year-on-year growth in its Eco-Care Loans over the next 12 months up to March 2024. This is despite taking into account the inflation as well as expectations of a housing market slowdown in 2023.

ASIAN BANKING & FINANCE | Q3 2023 29

CASE STUDY: LIVI BANK

Hong Kong’s livi bank launches gamechanging app for SMEs Going fully digital on opening accounts and approving quick loans to SMEs raises ‘livi Business’ disbursements to over HK$70m (US$8.9m) as of end-April.

S

mall and medium enterprises are often touted as amongst the most underserved segments by traditional financial institutions.

And the case is no different in Hong Kong, which is why virtual-only bank livi’s newest product offering, the “livi Business” app, is a game changer for local small business owners.

The app offers a fully automated account-opening process that can reportedly be finished in just 20 minutes, with the possibility of having their new accounts opened in as little as 24 hours.

“In Hong Kong, we recognized [that] the pain point of the SMEs over here is opening a bank account.

Getting loans often takes weeks, if not months,” Gary Lam, chief technology officer at livi Bank Ltd., told Asian Banking & Finance. This is why livi Bank came about designing and launching livi Business.

“SMEs in Hong Kong have been significantly underserved by traditional lenders. We are determined to help to make a difference with our less human intervention, digital enablement, and strength in our technology,” Lam added.

This sector of enterprises are also promised to secure a loan in as fast as 24 hours by livi. Through its livi Business Installment Loan, SMEs are offered unsecured loans of up to HK$8m (US$1.02m), at an interest of as low as 0.28% per month, equivalent to an Annualized Percentage Rate (APR) of 6.52%, with installments of between six to 60 months.

Apparently, it’s been a hit. By the end of April 2023, the total approved loan amount from livi Business had reached HK$70m (US$8.9m) in loans disbursed, Lam said.

Livi has observed a lot of demand for remote account opening as well as cash flow needs amongst local SMEs. Lam further noted that Hong Kong SME customers shared frustrations over the fact that they 30 ASIAN BANKING & FINANCE | Q3 2023

Photo from left to right: Eric Lin, livi chief marketing officer; Eve Lin, livi head of strategy and segment management; David Sun, livi CEO; Micahel Lai, executive vice president of the Hong Kong General Chamber of Small and Medium Business; and Gary Lam, livi chief technology officer.

We will continue to capitalize our advanced technology shareholder networks to provide high quality competitive offers

don’t have more control over the loan application process, and sought more transparency on the progress of their application.

“Account opening and loan applications require a lot of manual intervention, lots of documentation and submission from the SMEs,” Lam said.

Taking note of these, livi Business makes use of artificial intelligence (AI) and e-Know Your Customer in order to help SMEs apply for a bank account and secure loans without having to visit a physical bank branch.

Lam explained that livi Business’ uses data and technology in order to better provide the right customer service that will meet SMEs cash flow needs. The importance of improving their data is something that livi Bank is more than aware of.

“We [are] looking into some official data providers for company register information such that we can use more electronic ways, use

API to enable the data flow — instead of asking our customer to data punching manually as save a lot of time for them,” Lam said, commenting on the service’s automated and fully digital account opening and application process.

“There’s no time limitation for our customers; they can open an account in business hours or after hours or even midnight,” Lam said.

Apart from business loans, livi Bank has also introduced an invoice financing service through the network of one of its shareholders, Jardine Matheson. The service is offered to the network’s construction and engineering space.

“The strong momentum of livi Business accounts opening and business installment loans are just the beginning. We will continue to capitalize our advanced technology shareholder networks to provide high quality competitive offers to address different needs from our SME customers,” Lam pledged.

CASE STUDY: MAYBANK SINGAPORE

Maybank’s YES fuels tech-driven growth of small businesses Getting the right funds to grow their business remains a challenge for SMEs.

N

ew business owners face a plethora of hurdles before they can kick start their business. These include garnering the necessary engagement or publicity for their products, raising capital, and even the lack of access to the appropriate business managing tools: accounting, digital marketing, and payroll.

Unfortunately, getting the right funds to set up these cornerstones for their business remains a challenge for new entrepreneurs.

“A chief concern is capital sufficiency and funding gap at this nascent stage. Without at least two years of operating track record, it is often difficult for them to secure a bank loan for daily working capital or business expansion; and many would rely on their own savings or private fundraising efforts,” Marc Leong, head of SME Banking at Maybank Singapore, told Asian Banking & Finance.

“We want to address this ‘liquidity’ pain point through our latest e-financing solution that enables loan approvals within minutes, anywhere and at any time,” Leong said.

Taking note of these issues, Maybank Singapore — which serves approximately 20% of all SMEs in Singapore — launched the Young Entrepreneur Scheme (YES) in July 2022. The platform has since connected over 500 business owners, many of whom are millennials, through its curated SME events.

Through this, owners were able to connect and exchange insights, as well as scale up their operating capabilities through master classes or short courses.

The networking service is just one of the five main services that YES offers to entrepreneurs. YES also offers online account opening, doing away with long queues and waiting times under the bank’s e-Deposit service.

Businesses who reach six months of operations are eligible for a Maybank Business Credit Card, with a limit of up to S$20,000, to help with monthly expenses such as office supplies and small asset purchases. Once they reach

Singapore is one of Maybank Group’s largest overseas operations (Photo from the Maybank Singapore’s official website)

Applicants do not need to submit any operating bank statement or financial documents for credit assessment

Marc Leong

12 months of operations, they would then be eligible to apply for SME e-Financing, under which businesses can secure loans of up to $150,000 over a five-year repayment tenure.

Maybank Singapore also teamed up with Enterprise SG for SME Start Digital. Under this partnership, businesses can choose up to two digital solutions out of the three digital capability categories: business efficiency, which deals with accounting and payroll; sales generation, which deals with digital marketing; and cybersecurity.

Maybank Singapore will subsidise up to two digital solutions to support SMEs that decide on going digital.

“Maybank’s e-Financing solution’s unique proposition is that SME applicants do not need to submit any operating bank statement or financial documents for credit assessment. We also offer Islamic financing alternatives within our e-Financing platform — a first in the market,” Leong said.

Most recently, Maybank Singapore held its inaugural YES Forum, where Edwin Tong, Singapore’s Minister for Culture, Community and Youth was the guest of honour. The forum’s core objective is for entrepreneurs to gain exclusive insights and learn from successful business owners.

It also aims to help entrepreneurs

connect with industry peers and trade associations on key areas such as business agility, fundraising, financing tools, and talent management.

“We ensured these were all covered in the Forum’s programme,” Leong stated. “We had over 140 participating entrepreneurs, and we are very encouraged by the positive feedback.”

Many attendees said the fireside chat session on achieving sustainable success to be most helpful. “[Many] sought to ask and seek to learn from the panelists on overcoming and addressing current issues such as manpower, re-training and corporate culture. Discussions were robust, candid and productive,” Leong said.

“We were glad that the event met the needs of our attendees, many of whom even enquired on our next YES Forum,” he added.

In the future, Maybank Singapore will continuously enhance existing solutions and introduce new capabilities under the Young Entrepreneur Scheme programme.

“The YES programme is our commitment to nurturing young entrepreneurial talents, building a strong SME eco-system and promoting an entrepreneurial spirit in Singapore. We can expect more YES events in the coming months following the success of the recent forum,” Leong said.

ASIAN BANKING & FINANCE | Q3 2023 31

OPINION

RICKY KAPUR

Banking on customer experience

L

ast month, an annual report on customer satisfaction by Singapore Management University’s Institute of Service Excellence (ISE) revealed that on average, customers in Singapore interacted with three unique bank touchpoints, including automated teller machines, physical bank branches and mobile applications.

This points to the importance of viewing each touchpoint on the customer journey. Whether it’s digital or in-person, as make-or-break in impacting customer experience.

In fact, the same report found that consumers’ willingness to try digital banks has fallen year-over-year.

Simply being digital, as it stands, is no longer enough to satisfy today’s customers.

Instead, banks should be racing to deliver enhanced customer experience that is underpinned by a truly omnichannel approach. Getting to the finish line and ahead of the rest will require working smarter — this is how banks can start.

RICKY KAPUR Head of Asia Pacific, Zoom

Leveraging smarter technology in banking The fundamentals to working smart entails the incorporation of advanced technologies, such as artificial intelligence (AI) and machine learning (ML), across the banking customer journey. This is able to resolve some of the pain points customers face. According to information technology services and consulting firm Capgemini’s World Retail Banking Report 2022, 37% of Singapore respondents feel that banking is not customised enough for them, while 22% think their banks lack a seamless experience across touchpoints.

With AI and ML in the picture, banks can achieve precise customer segmentation based on customer behaviour, preferences, needs, and interests. This is an important step to not only driving better customer relationships, but helping banks create a hyperpersonalised customer journey for each client.

In particular, integrating AI and ML into everyday customer-facing functions can help banks meet customers where they are. For instance, AI chatbot technology makes it possible for banking providers to offer a 24/7 self-service channel. More progressive chatbots, such as those powered by natural language processing, even have the ability to interpret questions from customers no matter how they are phrased with high accuracy.

32 ASIAN BANKING & FINANCE | Q3 2023

For banks, the profit advantage is clear as they are able to meet high volumes of support requests at a lower human cost. Having such technology in place also alleviates the risk of slower response times or inaccurate resolutions especially during spike periods.

Most importantly, this means customers can enjoy the flexibility of engaging in banking interactions whenever and wherever they want — all while enjoying the same level of highly-personalised, quality service.

Making workflows smarter to maximise efficiency Working smarter, in a different sense of the word, also involves maximising productivity and efficiency with existing resources. This can be achieved by streamlining and improving workflows to increase employee productivity.

Incorporating contact centre functionality, for example, could help financial service consultants do more within a single session. Within a virtual meeting, paperwork can be reviewed directly and customer signatures — traditionally done offline for compliance purposes — securely recorded without having to exit the video interface. This is not only time-saving for customers who no longer need to make a trip down to the physical bank for such paperwork, but for employees who can streamline all these tasks within one interaction.

Similarly, self-service channels like the aforementioned chatbot can free up time for banking consultants to focus on more high-value, impactful activities, whether these are carried out in-person or via a digital channel. This includes areas where human touch is still preferred such as advising clients on loan processes, or devising investing strategies for clients.

Ultimately, the ideal customer experience roadmap for banks should prioritise both quantity and quality.

On one hand, customers want options to connect with their banking providers on the modality they prefer; on the other hand, it is just as crucial to have this connection done over a trusted channel that feels less transactional and more human.

Missing the mark on either count can hurt revenue and business performance, particularly in today’s competitive banking landscape. Incorporating advanced technologies into the banking experience and looking inwards to make everyday workflows more efficient can help banks make inroads on this roadmap.

Customer expectations will always evolve. The way for banks to keep up is not about working a lot harder to meet these heightened customer expectations, but smarter.

ASIAN BANKING & FINANCE | Q3 2023 3

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