Asian Banking & Finance (July - December 2020)

Issue No. 100 DISPLAY TO 31 DECEMBER 2020

Asian Banking & Finance

HK’S FIRST VIRTUALONLY LENDER SPOTLIGHT ON RESTRUCTURING

BANK RANKINGS ACROSS SINGAPORE AND HONG KONG CONTACTLESS PAYMENTS IN DEMAND

FROM THE EDITOR PUBLISHER & EDITOR-IN-CHIEF

I

t’s our widely anticipated awards issue! Head over to page 46 where we celebrate the achievements of hundreds of banks from around the region for their exceptional retail banking, corporate banking, and wholesale banking initiatives.

Tim Charlton

MANAGING EDITOR

Paul Howell

PRODUCTION TEAM

Frances Jade Gagua Alyssa Divina

COMMERCIAL EDITOR

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GRAPHIC ARTIST

Simon Engracial II

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Karisse Coderes Karisse@charltonmediamail.com

We chatted up three of Hong Kong’s brand-new virtual-only banks to learn more about their thoughts as the newest entrants in the city’s highly competitive banking industry. Learn more about ZA Bank, Mox Bank, and WeLab Bank on pages 16 to 21.

Meanwhile, United Overseas Bank’s mobile banking platform TMRW is already making waves in Thailand and has recently launched in Indonesia. Wanna know the key to this mobile-only bank’s success? Head over to page 22 to find out.

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This issue also sees us explore how Miss Rona’s entrance changed the payments industry as people refrain from physical contact.

Enjoy our year-ender edition!

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MICA (P) 249/07/2011 No. 67

ASIAN BANKING AND FINANCE | DECEMBER 2020 1

CONTENTS

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COVER STORY ASIAN BANKING & FINANCE AWARDS HOLDS FIRST EVER DIGITAL AWARDS PRESENTATION

RETAIL BANKING 08 Debates arise on security law’s effects on Hong Kong finance sector

INTERVIEWS 10 How Citi ASEAN remains adaptable amidst rapid change

12 Indonesia’s Bank Mandiri reveals data strategies

14 Meet Hong Kong’s first virtual-only bank

16 Amidst a crisis, Hong Kong’s Mox Bank sees boundless opportunities

18 Hong Kong’s only homegrown virtual bank uses data to win big

INTERVIEWS 20 No ‘one-size-fits-all’ for mobile

22

FINANCIAL INSIGHTS WHAT BANKS ARE GETTING WRONG WHEN RESTRUCTURING

38

COUNTRY REPORT JAPAN’S REGIONAL BANKS GAIN LIFELINE WITH REGULATOR’S STRATEGY SWITCH

SEGMENT REPORT 36 Contactless payments ramp up amidst virus concerns

bank TMRW

RANKINGS

OPINIONS

26 Pandemic drives Singapore banks to accelerate digital offerings

30 Pandemic crisis speeds up online, mobile banking adoption by 200%

94 Will open banking be the next wave of transformation in Asia’s financial industry?

96 Impact of COVID-19 on Indian Banks

FINANCIAL TECHNOLOGY 33 How Lendela matches up customers to lenders

34 How Spenmo helps businesses secure direct loans

Published quarterly on the second week of the month by Charlton Media Group Pte Ltd 101 Cecil St. #17-09 Tong Eng Building 2 ASIAN BANKING AND FINANCE | DECEMBER 2018 2020 Singapore 069533

For the latest banking news from Asia visit the website

www.asianbankingandfinance.net

THOUGHT LEADERSHIP ARTICLE

Digital payments driving the trend in APAC market As digital payments take the centre stage, the complexity of transactions is also increasing. Santosh Tripathy explains how providers can address these using SmartStream’s operational control platforms.

In an interview, Santosh Tripathy notes that consumers are now showing stronger preference for contactless payments.

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owadays, the financial industry is all about speed: from digital payments, to online transactions, to settling resolutions, and—perhaps most important of all—the efficiency of a financial institution’s entire ecosystem.

With the pandemic pushing the growth of digital payments, consumers are now showing stronger preference for more convenient contactless payments, instead of cash, notes Santosh Tripathy, Practice Leader, Digital Payments at SmartStream.

One example of this: the option for contactless payments has now become a table stake requirement for almost all consumers applying for new credit cards, he added.

The competition is especially tough in Asia Pacific—which leads the world in the digital payments innovations, particularly Singapore. Santosh says that the country’s digital payments credentials have been further enhanced by the Monetary Authority of Singapore successfully completing Phase V of the Central Bank Digital Currency project (CBDC), Project Ubin.

Other recent trends in APAC all revolve around speed and efficacy as well: from real time payments, open banking, to e-wallets, all of which driving the APAC market. And the whole ecosystem has grown phenomenally in the last few months, now that merchants have started to accept the contactless payments, which is expected to become the next trend.

To stay technologically ahead and

prepared for these trends, firms should spend their energy and time in control measures such as operational control, data control, and security, according to Santosh.

And this is where SmartStream comes into the picture: the firm’s proven lineup of operational control systems empowers digital platforms with confidence in their ability to create efficient back office to support growth of volume, velocity and variations of transactions.

Bigger data management With contactless payment transactions increasing, banks need to ensure greater control over their data and reconciliations, as digital payments and open banking make these tasks far more volume heavy.

The complexity of transactions is also increasing, making it a big challenge for companies, particularly banks, to handling their transaction data.

“That transaction data has a lot of meaningful information to extract,” Santosh said. “At the same time, you have to create infrastructure where you are storing this data securely, and you have to then mine this data to extract information.”

Addressing complexities through operational control platforms Apart from the increasing complexity

of data, transaction processing, and innovations, firms should also make sure that their digital payment application’s operational controls are in the proper place.

The Prudential Regulation Authority has started a consultation paper to discuss how to supervise and manage new and growing non-systematic UK banks.

“PRA has noticed that many of these new banks have underestimated the development required to become a successful and established bank. Often, these banks are focused on the ambition of becoming authorised and lose the longer term focus of becoming a sustainable business” “Someone who is not aware of the risks and the deficiencies and the threats cannot prepare the system and the larger ecosystem for that threat,” warns Santosh, noting that if anything goes wrong and disrupts the whole operational control, the confidence of users will go down.

SmartStream helps firms efficiently address these concerns with its wide range of operational control platforms which can be deployed in the cloud or as a managed services “Our control systems play the role of monitoring the traffic palettes, safeguarding the system that we are preparing on the digital payments platform,” said Santosh, “They are playing in that space of putting the right control measures and checks and balances to make the internal operations very strong, efficient, and robust,” he added.

The platforms primary target is to bring controls efficiencies so that any financial or reputational risk is identified early. Santosh notes firms who would start utilising SmartStream’s experience in the operation space early will benefit in having the right controls as well as checks and balances in their operations for them to grow. manages the ongoing evolution of the Payment Card Industry Data Security Standard. Organisations that are processing, transmitting or storing the cardholder data must get their infrastructure PCIDSS certified.

“With contactless payment transactions increasing, banks need to ensure greater control over their data and reconciliations.”

ASIAN BANKING AND FINANCE | DECEMBER 2020 3

THOUGHT LEADERSHIP ARTICLE

NetReveal 360° enables companies to meet compliance obligations Provides institutions with the means to host their compliance solution in a cloud environment. ensuring that changes are correctly handled and deployed cleanly into production.

In an interview, Gerard O’Reilly talks about the usage of cloud technology in meeting compliance obligations.

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s employees shift from working in an office to a remote environment, the need for an easily accessible solution has become greater than ever for companies, particularly financial institutions who face ever-changing compliance challenges. This also includes access to and provision of data.

Cloud environments have helped companies meet their compliance obligations by providing a scalable, dependable and elastic technology option to address change quickly and allows controllable costing options for predictable spend. Combine this with the need to monitor and maintain the solution, the benefits of a host solution start to become more prevalent.

As walking the compliance tightrope becomes trickier, BAE Systems Applied Intelligence developed NetReveal 360° to provide institutions with the means to host their compliance solution in a cloud environment, shifting maintenance, support, and performance to its managed services, as well as lowering internal time and costs for the institution.

Cloud enables flexibility to integrate larger data sets than previously used in an efficacy that has not previously been able to be leveraged. APAC Regional customer officer and Managing Director APAC Financial Services, Gerard O’Reilly notes that by opting for NetReveal 360, the deployment provides access to professional services expertise

4 ASIAN BANKING AND FINANCE | DECEMBER 2020

Integration of cloud technology in financial institutions By embracing cloud technology, financial institutions would have the ability to scale more quickly and efficiently than using on-prem. It would also provide them with a better understanding of technology spend and usage of Opex budget.

Further, less legacy technology will be used to integrate as more data sources become available in the future. Being on more current infrastructure also means that the companies will be able to keep pace with their customers and their changing demands as we face a new global “normal” in the way banking services are consumed and how customers will interact.

This means that the customer feedback is in the product and the out of the box nature reflects the best practice for end users. A robust service level agreement is in place between BAE and each customer to ensure responsibility and accountability that has traditionally resided within the financial institution, is now defined and both clearly articulated and actioned.

NetReveal 360° for AML compliance NetReveal 360° is developed from hundreds of deployments which have been both on-prem and in the cloud deployed across a global installation base. NetReveal 360° addresses the core foundation of regulatory financial crime compliance such as transaction monitoring, KYC/CDD, Watch List Monitoring for both transaction filtering and PEP and Sanctions, wrapped under a single Enterprise Investigation Manager alert and case management layer.

Out of the box scenarios and reporting is also accessible for users via a web front end.

A complete system that is integrated across modules allows the investigator a richer understanding of the customer risk within the institution.

Over the last 6 to 12 months, BAE Systems has seen an increase in the larger

banks looking towards leveraging their technology cloud roadmaps to make use of the NetReveal compliance platform. This has been accelerated as well, due to the current pandemic.

Further, with use of external data in model creation, institutions can look to more readily account for new patterns or detect outlier activity, such as an increase in digital transactions or purchases that are related to business type, as new criminal typologies change as the current market landscape evolves.

Lastly, with regards to customer onboarding and ongoing due diligence, the speed at which institutions can gather and assess potential new customers is an area of increased importance. The speed, enrichment and verification of the onboarding process is critical for institutions to protect themselves. Investment into realtime processing and open APIs to consume external data for verification has been a key area of innovation that will continue for BAE Systems.

Gerard notes that NetReveal 360 is a product that is the latest incarnation of a product that has been developed for 16+ years, and is trusted by global banks to detect and prevent financial crime in their institutions.

“We have seen a recent increase in both customers moving to cloud (private and public) and also making enquiries/RFPs whereby Cloud is now either an option, or in some cases mandatory,” said Gerard.

Customer feedback is captured via the Financial Crime Intelligence Network (FCIN), which is an online community that has thrived during the recent pandemic. Hosted webcast and podcast material is also available for all of BAEs customers.

“The change in nature of transactions during the pandemic is also something we have noticed with our customers, especially the drop in usage of cash—for these such examples BAE Systems continues to work closely to understand the financial crime landscape and adjust the product strategy to suit the market demands,” added Gerard.

BAE Systems continues to work closely to understand the financial crime landscape and adjust the product strategy to suit the market demands

Reduce cost and complexity get control of compliance with NetReveal 360°

NetReveal® 360° for AML compliance

• Anti Money Laundering (AML)

• Customer Due Diligence (CDD)

Specifically packaged to operationalise quickly, NetReveal 360° integrates

NetReveal 360° for AML Compliance is an effective end-to-end compliance package that eases operational pressure while providing comprehensive and scalable coverage.

With minimal disruption and cost, BAE Systems helps you stay ahead of the regulatory curve. Visit baesystems.com/netreveal360 for more information.

The built-in NetReveal Data Privacy Agent balances data privacy requirements while detecting, investigating and reporting suspicious fraud and financial crime activities.

This cloud-based solution combines BAE Systems’ 20 years’ experience in providing compliance and counter-fraud solutions, our defence-grade commitment to security and our service excellence, in to a single solution managed by our team.

• Watch List Management (WLM)

ASIAN BANKING AND FINANCE | DECEMBER 2020 5

No upfront costs NetReveal 360° removes internal hardware spend so you can refocus internal IT resources

Managed Free up time and resources for improving operations rather than struggling to keep up

Scalable Cater for unexpected changes in demand in hours rather than weeks

Secure Cloud security levels that adhere to the same security standards as our government deployments

$

News from asianbankingandfinance.net Daily news from Asia MOST READ

RETAIL BANKING

Economic fallout from pandemic hits Singapore banks Impaired-loan rations are expected to more than double from end-2019 levels, whilst earnings will fall by around a third of last year on the back of higher credit costs, reports Fitch Ratings.

RETAIL BANKING

Australia’s wealth managers slash fees as tech takes flight More than three-fourths or 76% of wealth managers in the country have lowered their costs or plan to lower fees to compete with roboadvisors, according to a survey by data and analytics firm GlobalData.

6 ASIAN BANKING AND FINANCE | DECEMBER 2020

BANKING TECHNOLOGY

Digital-savvy Thais push banks’ fintech adoption About 60% of the Thai population are between 15 and 55 years old, a segment that is becoming more attuned to digital services. As a result, top tier banks have already started modernising their infrastructure.

LENDING & CREDIT

Non-bank lending to flourish in Asia as incomes diminish Almost half (45%) of respondents to a new survey indicated that a decrease in incomes was their main reason to seek active borrowing, whilst 9% were looking to satisfy their hunger for shopping.

CARDS & PAYMENTS

Japan card payments to grow 2.1% in 2020 The value is expected to reach US$839.4b (JPY91.2t) by 2023, growing at a compound annual growth rate (CAGR) of 6% in the next three years, reports data and analytics company GlobalData.

MARKETS

Hope for Malaysian banks in 2021 after ‘washout’ 2020 As the Malaysian economy is forecasted to rebound 4% in 2021, bank earnings are likely to follow suit with a forecasted 5.7% YoY growth in operating profit and a 7.9% YoY recovery for net profit.

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ASIAN BANKING AND FINANCE | DECEMBER 2020 7

RETAIL BANKING: HONG KONG

Debates arise on security law’s effects on Hong Kong finance sector

Various sources claim there is a capital exodus from Hong Kong to Singapore, but both markets deny it

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midst all the ruckus brought about by the pandemic, tensions have flared again as China imposes a national security law on Hong Kong, which would allow for the establishment of a national security agency in the city and would criminalise subversion and secession. People across the city and around the world raised alarm bells and protesters returned to the streets once more. In response, the United States government has stripped Hong Kong of its special status, a move which will further jeopardise the city’s image as a global business hub.

Hong Kong has been struggling to keep itself attractive to foreign businesses ever since the antiextradition protests began in 2019. Banks’ asset qualities have taken a heavy beating and the COVIDled economic downfall made it worse. As a result, some have seen increasing enquiries about moving capital to other Asian countries like Singapore.

Singapore will benefit from growth as a wealth management centre as assets under management flee Hong Kong

Money moves Talks about capital flight were first reported in early June when HSBC, Standard Chartered and Citigroup saw spikes in enquiries about offshore accounts, with Singapore, Sydney and Taiwan as the popular destinations. In particular, HSBC and Standard Chartered have seen enquiries surge by 25-30%,

Citigroup is one of the banks that got a bulk of enquiries about offshore accounts in other APAC markets 8 ASIAN BANKING AND FINANCE | DECEMBER 2020

according to a Reuters report.

Although customers have been mulling about relocating their money elsewhere, Jefferies Head of China FIG Research Shujin Chen doesn’t see a lot of outflows at the moment. In an exclusive interview, she said that whilst clients have been moving their registrations to Singapore, Hong Kong remains an attractive destination for foreign money, especially from the mainland.

“There are still quite a lot of inflows to Hong Kong.

We do hear from banks that some private banking clients move their registrations to Singapore. But Hong Kong’s capital market is more mature and it has more exposure to Mainland China where a lot of investors want to invest in,” Chen explained.

Alicia Garcia-Herrero, the chief economist for Asia Pacific at NATIXIS, also expressed concern about private banking clients “as wealthy individuals may not feel fully protected,” she said.

Nevertheless, if China goes ahead with the security law, the US could conduct more actions on the banking sector. Commercial banks with more overseas business, including those that help firms go abroad under the One Belt One Road projects, may be more affected, Chen told Asian Banking & Finance.

Moreover, Garcia-Herrero thinks Hong Kong banks

The Monetary Authority of Singapore debunked reports on a number deposits flocking from Hong Kong

RETAIL BANKING: HONG KONG will diversify their operations further into the rest of Asia, but mainland banks operating in the city will not see a major difference.

Singapore as main beneficiary?

The Lion City is said to be gaining from the supposed capital outflow from Hong Kong even with denials from analysts and regulators of outflows happening in the first place. A UOB Kay Hian (UOBKH) analysis revealed that non-resident deposits jumped 43.8% YoY to $44.6b (S$62.1b) in April, with overall deposits for domestic banking units (DBUs) rising 13% YoY in the same month because of individuals’ “flight to safety”.

“Singapore will benefit from growth as a wealth management centre as assets under management (AUM) flees Hong Kong and repositions in Singapore,” UOBKH analyst Jonathan Koh wrote.

The spike in bank deposits likely stipulates the deleveraging of private banking portfolios and increasing risk aversion as Hong Kong’s political woes go on, according to a Bloomberg Intelligence analysis.

But just like its Hong Kong counterpart, the Monetary Authority of Singapore (MAS) came out to dispel reports of capital inflows, saying that currency deposits have actually risen since 2020 began but “have come from diverse sources and for varied reasons.”

Whilst Garcia-Herrero thinks that Singapore is “clearly” benefiting from all the events unfolding in Hong Kong, she cautioned that the degree of relocation might not be as large.

“Whatever is Mainland-related will remain in Hong Kong and this is the bulk of Hong Kong’s financial transactions even today. This is particularly true for IPOs and bond issuance but less for syndicated loans,” she said.

On the other hand, Chen noted that it is hard to say whether Singapore or other Asian markets would gain from the money exodus from Hong Kong or from the mainland, as the Chinese market

Eddie Yue

Alicia Garcia Herrero

Shujin Chen

is too big and Hong Kong enjoys much greater freedoms regarding capital restriction.

In addition, relocating business may prove to be an ordeal for Chinese banks but they may still try to move their US operations to Hong Kong or to the mainland.

The process may be even harder for Hong Kong banks as they have nowhere else to go, she said.

certain bank branches. Regarding the sustainability of the Linked Exchange Rate System (LERS) and whether the US can revoke it, Yue stated that the best approach in keeping confidence in the system is “to stick to facts and uphold a high degree of transparency.”

“Hong Kong’s financial sector continues to display strong resilience in adversity: the Stock Exchange of Hong Kong (HKEX) continues to be Banks unfazed the world’s top listing destination, Whilst the general consensus is turnover of the Shanghai-Hong that the security law symbolises Kong Stock Connect has doubled, China’s deep-seated attempt to and that of the Bond Connect has ensnare Hong Kong once more, tripled. All these are testaments to some financial institutions are not Hong Kong’s edge as a dominant that worried about its potential gateway to the Mainland,” he wrote. implications on the wider The Bank of China (Hong Kong) monetary system. believes that the formation of the The Hong Kong Monetary security law “will help restore Authority (HKMA) opines that social order and the stability of the the law should not bring forward business environment.” The bank any fundamental changes to the explained that the security law, city’s monetary and financial under the current “one country, system. In a 26 May statement, two systems” principle, will clear chief executive Eddie Yue assured the path for the city’s long-term that the Article 112 of the Basic development and bolster enterprises’ Law will preserve “the free flow and investors’ confidence. of capital and free convertibility “It will also create favourable of the Hong Kong dollar” and conditions for economic recovery, that the banking system has ensure the prosperity, stability and strong capital positions, adequate robustness of Hong Kong, and liquidity, good asset quality and further consolidate Hong Kong’s a convincing track record in position as an international financial operational resilience. centre,” told Asian Banking & Finance.

“The Hong Kong dollar Regardless of everything that exchange rate has remained stable has taken place, Garcia-Herrero and on the strong side of the opines that Hong Kong’s rule of law convertibility zone. Interest rates regarding commercial transactions have stayed low. Financial markets is still in good standing which will have also been operating in a give the city an edge to prosper smooth and orderly manner. There even more, in addition to a taxhas not been a noticeable sign of free environment and full capital fund outflow from either the Hong account convertibility. She praised Kong dollar or banking system,” HKMA’s move to enact free liquidity he said, adding that the regulator requirements for banks, something will be on the lookout to allay that may help the industry adjust. “unfounded rumours.”

However, despite numerous One week later, on 2 June, Yue assurances that everything will be came out again with a statement alright, Garcia-Herrero has warned after the US government that the security law’s intention not announced that it is ending its to affect the sector was much easier special treatment of Hong Kong. said than done.

He reiterated that the HK$ “In reality, Hong Kong’s financial market has been “functioning centre is set to be even more focused normally” and dismissed reports on the Mainland and, at most, the of fund outflows and shortage rest of Asia, but it will not be as of US$ banknotes amongst global as before,” she said.

ASIAN BANKING AND FINANCE | DECEMBER 2020 9

INTERVIEW

How Citi ASEAN remains adaptable amidst a time of rapid change Joel Fastenberg talks about how Citigroup’s workforce champions digitization and diversity.

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o other year in the past decade have undergone as much change and disruption as 2020. The onset of the COVID-19 pandemic, which escalated the adoption of digital services in banking, isn’t the only thing that threw financial industries at a disarray; the stronger resurgence of racism issues, particularly in the US, saw groups and companies face intensified scrutiny on the topic of HR and diversity.

ASEAN and Singapore Head of Human Resources for Citi Joel Fastenberg’s 20 years of experience in the human resources field across Asian financial industries has prepared him for these changes. It has taught him to be empathetic to employees’ needs—whether it be ensuring that they learn to be adaptable amidst a continually changing financial industry, or just simply listening.

“Over my years of living in Asia I have learned that building consensus and hearing the views of others before rushing into decisions is crucial,” Fastenberg told Asian Banking & Finance in an exclusive interview. “You don’t always have to be the loudest voice in the room to be heard. This is something that I have applied over the years when leading my teams.”

Asian Banking & Finance talked to Fastenberg to learn more about Citi’s views on opportunities and changes in their ASEAN workforce and HR operations.

What are the biggest HR opportunities for Citi in Southeast Asia?

From an HR Perspective, the most promising opportunity is the demographic make-up of ASEAN. By 2030, ASEAN is predicted to have the third largest labor force, contributing 10% of the global workforce. In addition, the median age is predicted to remain low at 33 years old.

Looking at our immediate future, the rapid digital transformation and unprecedented COVID-19 pandemic has unlocked many doors with respect to working remotely. I personally see a number of advantages and rewards when it comes to remote working. It has the potential advantage of creating more work-life balance, positively impacting employee satisfaction as well as overall morale.

When implemented in an appropriate manner, it can also help to increase productivity and performance.

What are the biggest challenges Citi has encountered in Southeast Asia, and how did you overcome these?

One of the challenges that ASEAN has for organizations is also one of its biggest strengths — its diversity. Within ASEAN, there is a wide range of people, language and 10 ASIAN BANKING AND FINANCE | DECEMBER 2020

The world is currently experiencing a 4th Industrial Revolution that is characterized by the fusion of technologies, blurring the lines between the physical, digital and biological spheres.

Joel Fastenberg, ASEAN and Singapore Head of Human Resources, Citi

cultures across the respective countries. This diversity is extremely important as research has repeatedly shown the link between diversity in management teams and the likelihood of financial outperformance.

However, there are sometimes difficulties that arise from this. Last year, we conducted an internal analysis of our learning program. What we found was that for some of the modules, employees from the different countries who attended programs covering the same topics left with different learning outcomes. Whilst this allowed for our training to cater to the cultural nuances and different needs in each country, the differences also meant that some employees in were missing out on valuable information and skills that they were supposed to gain.

We have since managed to overcome this by harmonizing the learning programs across ASEAN by utilizing a single vendor that has a regional or even global presence and local capability in every country. This enabled programs to be customized by local staff to continue meeting the unique needs of any country while at the same time preserving learning outcomes across the region.

How are you preparing your workforce to thrive in the massive shifts in the banking industry happening today?

The world is currently experiencing a 4th Industrial

INTERVIEW

Female representation amongst top roles in Citi Singapore stood at 36% as of December, 2019

Revolution (IR4.0) that is characterized by the fusion of technologies, blurring the lines between the physical, digital and biological spheres. This has similarly been reflected in the banking industry, as technology is being progressively embedded into the way we work every day.

Earlier this year, Citi launched the revamped Citi Singapore Learning Academy to meet our current and future business needs. The learning academy is structured around three main learning categories – the Innovation Series, Professional Skills Development Series and Women Development Series. Staff are able to pick up skills that are in demand such as Data Visualisation with Python, Presenting & Influencing with Impact and Human Centered Design.

Moving forward, we will continue to keep a constant ear on the ground, listening to employees needs and challenges via various touch points, evaluating our programs regularly and adjusting them as necessary in response to feedback from staff who have attended them.

How does Citi prepare its employees that their work and services may stay relevant for the future of work that’s shaped by the pandemic?

The pandemic has challenged us to re-examine our processes in these areas. What we are seeing is that our investments in the digital transformation of our bank is paying off, as our client’s own business models have evolved with technology, resulting in more of them turning to our digital solutions and services.

We believe that the acceleration in the adoption of our digital services will become a long-term shift in client and consumer behavior as more continue to discover the ease and convenience that digital services bring. We expect that technology will be heavily leveraged upon to power the future ways of working and supporting our clients. To that end, we are equipping our employees with the skills they need to thrive in this new era through avenues such as the Citi Singapore Learning Academy.

Top executives in Citi have spoken up about diversity and racial injustice, which has intensified in recent months. How has these topics changed over the years?

We have seen a greater call for accountability beyond having only conversations around diversity. At Citi, we have taken the lead by being transparent in publishing

Citi says it is only through building diverse teams that the organisation be at its best.

statistics on our unadjusted pay gap for minorities and women. The unadjusted pay gap measures the difference in median total compensation when we don’t adjust for factors such as job function, level and geography. The unadjusted pay gap for women globally stood at 71% and can be mainly attributed to differences in gender representation at senior levels of the bank.

Citi has committed to increase global representation of female Assistant Vice President to Managing Director level roles to at least 40% by 2021.

Here in Singapore, we have published that our female representation at Assistant Vice President to Managing Director is at 36% as of December 2019, an increase from 32% in December 2017.

Whilst progress towards our goal has been made, clearly more needs to be done.

How do you plan to ensure that these concerns are met in Citi’s Singapore and ASEAN HR operations?

Diversity and Inclusion are top priorities at Citi. Beyond being a business imperative, it is also simply the right thing to do.

I consider it one of my goals to ensure that within Citi Singapore & ASEAN, we are driving an inclusive and diverse workforce and environment. Only through building diverse teams and an environment where employees feel confident and comfortable, can the organization also be at its best.

We have in place the Citi Employees Networks to establish a platform for diversity and inclusion.

In Singapore, these include Women, Pride and Generations Employee Networks. We also have a Green and Sustainability Committee. They are open to all employees and assist the bank in recruiting and retaining talent, celebrating ethnic, cultural and community diversity, supporting community outreach and providing professional and personal development opportunities to their members.

Can you share with us your goals for the next few years, and any future projects?

As mentioned earlier, one of my goals is really to continue driving talent, diversity and inclusion within Citi. It is incredibly important to me that people feel safe and comfortable to be who they truly are while at work.

Some other areas that are exciting is harnessing data within the HR function to drive decision making and playing our part in shaping the future of work. We are going through a tech-transformation in the Human Resources function.

On the future of work, at least for the foreseeable future, we’re not going to be able to have our full employee base together in the office. This brings about many of its own challenges, I am excited by our work to continue evolving towards an optimal work structure that is relevant for today’s situation and for meeting Citi’s needs in the future.

We have to constantly assess what enables us to be the best for our clients and constantly move towards that goal. By Frances Gagua ASIAN BANKING AND FINANCE | DECEMBER 2020 11

INTERVIEW

Indonesia’s Bank Mandiri reveals data strategies as pandemic continues The bank is now using machine learning technology to predict what customers need next.

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he COVID-19 pandemic has gravely struck Indonesia, where it now stands with the secondhighest number of cases in Southeast Asia. It’s resulting economic fallout did not spare the country’s banking and financial industry, with subdued results expected to manifest themselves in Q2 this year, according to Fitch Ratings.

In order to weather the fallout, state-owned Bank Mandiri has had to leverage its digitisation efforts and partnership with US-based data cloud firm Cloudera.

“It’s becoming very, very important for the management to see the performance of the bank, the conditions of our customers, our distribution, and our employees,” said Billie Setiawan, the lender’s head of enterprise data management and bankwide data & analytics, told Asian Banking & Finance.

Bank Mandiri’s data journey with Cloudera started in 2014, according to Setiawan, where the first objective was to centralise its data. Since then, it has snowballed into real-time monitoring of liquidity and daily branch transactions, tracking of employee health status, and loan restructuring programs — organisational tools that are proving to be especially important during a time of a global pandemic.

“We have a capability of machine learning where we can build more accurate physical models to be able to predict what is the next best offer for our customers.

Those are the things that have been evolving since we started on data analytics,” Setiawan explained.

And they’re not stopping there. Since there has been a spike in e-commerce transactions, the bank has been trying to learn about their clients’ behavior in hopes of serving them better, whilst also improving Bank Mandiri’s revenue and profitability.

Asian Banking & Finance caught up with Setiawan to discuss in detail how has the pandemic affected the country’s finance sector, Bank Mandiri’s data and digitisation journey, how they have benefitted from their Cloudera partnership, and what the future holds for their data transformation.

Can you talk briefly about how the pandemic affected Indonesia’s banking and finance sector, and the measures you’ve taken to survive?

It has definitely impacted our customers, our financial performance and network distribution, and lastly our employees. Since the declaration of the pandemic in the middle of March, we straightaway came up with all the urgent stuff and emergency planning. It has really 12 ASIAN BANKING AND FINANCE | DECEMBER 2020

Bank Mandiri uses machine learning to build more accurate physical models, that are able to predict the best offers for customers.

Billie Setiawan, Head of Enterprise Data Management & Data Analytics, Bank Mandiri

impacted my team, especially related to data analytics.

First, in terms of our customers, how can we help our customers to continue their business? We provide a few initiatives and we also suggest restructuring programs for their credit.

Secondly, how do we also manage our risk management, risk appetite, as well as our liquidity monitoring? We also have to manage our market situations, how is it in condition in terms of the industry, because we have many customers from various industries, from wholesale businesses all the way to retail businesses, so we need to be really strong at coming up with helpful, customer-focused programs.

We had to temporarily close our branches to make sure that the virus would not spread. But at the same time, we need to also take care of our service to customers, to make sure that busy branches will stay open with the right protocols, and to make sure that the banking services are still continuous.

Lastly, in terms of our employees, we really need to manage our capacity in the office, to make sure that all the critical functions are working, from customer care, risk management, collection, and IT. That’s something that we have been really preparing for since March of this year, right up to now.

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Indonesian businesses have shifted their focus on wholesale customer information to keep operations afloat (Photo Credit: Tom Fisk, Pexels)

How would you assess Bank Mandiri’s data journey so far? How have leveraged data to weather through the pandemic?

Our data analytics here at Bank Mandiri started quite a few years ago. These functions and enterprise data management have been with Bank Mandiri since maybe 2014, 2015 where the main intention is we really want to have, firstly, a single source of truth, make sure that everything is centralised into the same platform. We have to make sure that we have the same understanding, that we need to govern the data, that we need to govern and secure the data.

Secondly, all the data analytics that we need to make sure that we can utilize our data, which is embanked in Bank Mandiri for all activities such as how we come up with business opportunities and business recommendations, or that this is the right thing to do.

Now, we are evolving into the basic function which is we go on the data and how do we visualize the data so that it becomes very useful for us or for the management who really can come up with decisions and help them to support decision making. We have a capability of machine learning where we can build more accurate models to be able to predict the next best offer.

Are there any notable data-backed trends that have emerged from your customers and your operations amidst the pandemic?

Our customers are now focusing on wholesale customer information for how they can keep their business to survive. Initially, we helped them acquire more credit, for example, and we gave them a special rate, so there’s something that we can assist them with. On the retail side, I think we can see a lot of online banking -- it is more active, but people are going less to branches at this moment, and online banking is really increasing in terms of the transactions.

What factors help you decide which branches to prioritise first and temporarily close, without sacrificing your clients’ time?

What we actually assess and analyze is in our data in real

When it comes to liquidity monitoring, Bank Mandiri’s aim is is to give liquidity to the right customers.

The right customer is someone who really needs their business to survive, and needs to give salary to their employees.

time to essentially see and compare situations prior to pandemic, and during the pandemic. In terms of transactions, on a daily basis as well as on a weekly basis, if we can see that transactions are going down, that’s one of the signs that we can close a branch temporarily. We also need to balance working from home and working from the office to make sure that social distancing is in place.

The most important thing for us in terms of liquidity monitoring is to give liquidity to the right customers.

The right customer is someone who really needs their business to survive, and needs to give salary to their employees. But liquidity is also on the funding side.

How do we make sure that our relationship is not only on the credit side but also on the funding side? We need to balance those two.

What measures have you taken to assure clients and employees that their data is secure and protected?

We want to make sure you know we have a big office in order to govern the data. Secondly, we need to really understand where the data is coming from, how is the quality of the data. Lastly, the security of the data.

Prior to using Cloudera, everybody can have access to the data, so the risk of leakage was really big. But we have access metrics now as a way of standardising data access by making sure that everyone who will use the data can really give justification as to why they have to.

Everything is a journey and we are still in the process of making sure to standardise everything. We put the discipline, we put all the governance on related management reporting in domains as well. Those kinds of things are really in progress for us to tidy up everything to make sure that our data security and governance are well in place.

How do you envision Bank Mandiri’s long-term digital and data transformation? What do you think are going to be the biggest challenges along the way?

Of course now we have online banking and a website and we are embracing our digital capabilities. However, how do we make sure that we can still interact with people who do not have online banking profiles? We are currently improving our online banking, something that we are working on at this moment to make sure we can communicate all the relevant activities and offers to customers.

Everything sits on the online banking, but for nononline banking users, what we do essentially is make sure that for those who come into the branches, the right relationship management activity is in place. The customer service representative or the relationship manager knows the right offers, and we make sure that it’s dynamic since every behavioral change in a customer will impact the next best offer.

We also have to make sure that we are embracing digital strategies and we keep on learning since customer behavior also changes our behavior. The theme is also evolving, gaining new knowledge, gaining better models on giving recommendations and opportunity for the business. By Alyssa Divina ASIAN BANKING AND FINANCE | DECEMBER 2020 13

INTERVIEW

Meet Hong Kong’s first virtual-only bank The bank’s slogan of co-creation belies a strong charm offensive of attractive deposit rates.

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he first half of 2020 saw the dawn of a new era of banking in Hong Kong, with the city’s virtual-only lenders kicking off operations. The recent lockdown resulting from precautions amidst the pandemic outbreak only further fueled digital banking takeup. In fact, a survey by the Finastra expects that almost a third or 28% of Hong Kong’s adult population will own a digital bank by 2025, with around 760,000 people forecasted to open a virtual-only account in the next five years. For Finastra, whoever emerges on top will depend on which of the eight digital-only banks would be the quickest to establish operations in Hong Kong.

But Hong Kong’s first virtual bank to launch, ZA Bank, has no plans to focus on cooperation rather than competition—point that is well-reflected in its slogan ‘“Be Different, Together.”

“ZA Bank does not see other virtual banks as competitors.

On the contrary, we hope to promote financial inclusion together with them, to foster the development and innovation of the banking industry,” Rockson Hsu, CEO of ZA Bank, told Asian Banking & Finance in an exclusive correspondence.

The brainchild of ZA International—the business development platform of Chinese online-only insurance platform ZhongAn Online— instead highlights its operating model, which is centred on co-creation with its clients. The neobank communicated with its clients ahead of its official launch during the product development and design process, the spokesperson shared.

But as every business man knows, it’s the silent competitor that often proves to be the most deadly, and ZA Bank has definitely launched a strong charm offensive. In January, the bank offered a competitive introductory rate of 6% for deposits capped at $200,000, over 3 percentage points more than established banks such as HSBC, Standard Chartered, and Bank of China Hong Kong. Currently, ZA Bank offers a savings rate of 1% for a deposit value of up to $500,000, compared to the 0.001% general savings deposit rate.

Asian Banking & Finance caught up with ZA Bank CEO Rockson Hsu to learn more about ZA Bank, it’s goals for the future, and it’s outlook for Hong Kong’s virtual banks.

Tell us more about ZA Bank. What have you been up to since you first launched? What are your thoughts on being one of Hong Kong’s first virtual-only banks?

Unlike traditional banks, ZA Bank provides users with a full suite of services, 24/7. These services include efficient mobile banking facilities, such as remote account opening, multicurrency savings accounts, time deposits, local transfers, and e-statements ZA Bank does not have any physical branches. Users can enjoy convenient banking services without leaving 14 ASIAN BANKING AND FINANCE | DECEMBER 2020

ZA Bank introduced Hong Kong’s first-ever “30 Minutes Pledge” for its loan service.

Rockson Hsu, CEO, ZA Bank

their homes. Due to an efficient operating model and lower operating cost, we can provide attractive pricing to our customers. For example, savings products with attractive interest rates. Because of our commitment to financial inclusion, we do not impose a minimum savings balance requirement or any maintenance charges.

With its community-driven approach, ZA Bank has prioritised the rapid launch of its innovative capabilities that align with customers’ changing lifestyles. In March 2019, a community known as ZA Fam was established by ZA International, in which members are invited to participate in ZA Bank’s product development and design processes, thus guiding ZA Bank to create innovative products and services to better serve the needs of Hong Kong users.

Tell us more about your products and services. Who is your target customer base? What services does ZA Bank offer, or plan to?

For individual customers, we provide savings deposits, time deposits, loans and transfers. We launched ZA Savings Go, a flagship savings product on 24 March. With ZA Savings Go, we offer a savings rate of 1% for deposit balances at HK$500,000 or below, whilst base interest rate will be applied to deposit balances exceeding HK$500,000 .

Time deposits offer multicurrency deposits, including

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ZA Bank’s website interface

HKD, RMB and USD. Minimum time deposits start at just HK$1 and the range of tenors is flexible from one month to one year.

We also introduced Hong Kong’s first-ever 30 Minutes Pledge for our loan service. From submitting the complete set of information and documents to receiving the application results, the whole process will be within 30 minutes. Should any applicant have to wait for more than 30 minutes, we will provide a cash rebate of HK$10 for every minute of overtime until the application result is provided to the applicant, with an upper limit of HK$500.

There will also be a seven-day cooling-off period for ZA Personal Loan, during which users may choose to repay early without incurring any early repayment charge.

Regarding fund transfers, the Faster Payment System (FPS) offers round-the-clock instant fund transfers with no service fee. With just a mobile number, email or QR code, users can transfer HKD and RMB. We also support “five seconds recall” in case users transfer to the wrong account. Users can also transfer USD to other local banks through “CHATS”.

Can you give us an estimate of when you believe you will start making a profit?

We have set a “Five-year Plan” for our future development, one of the targets is to break even within the period. As an important initiative of the fintech reform and innovation in Hong Kong, virtual banks aim to lower the entry barrier of banking services by fintech, to cover more people with different financial needs. We remain confident in the future development of virtual banks in Hong Kong.

How has ZA Bank been received by the public so far?

ZA Bank has been well received since our official launch on 24 March. A month after our official launch on 24 March, we published the data of our first batch of customers. Surprisingly, our youngest and oldest customers are 18-year-olds and 87-year-olds, respectively.

As of the end of May this year, the oldest customer we have is 93 years old. This interesting data showcases that virtual banks could be an emerging service that brings innovative user experiences to different age groups. On the gender perspective, we found that the ratio of men to women is about two to one.

ZA Bank’s goal is to make banking and financial services more user-friendly and support Hong Kong’s underserved population.

Has the pandemic affected your operations, or led ZA Bank to reangle its strategies and goals? If so, how?

As a virtual bank, ZA Bank has no physical branches and can open accounts and conduct transactions online.

Therefore, pandemic or not, our users can always use the banking service on their phones, without ever having to leave the house.

Since the beginning of this year, we began to conduct risk assessments and prepare contingency plans to minimise the impact of the epidemic. Right after the Chinese New Year holiday, we asked all employees to work from home, even after the public holidays. At the same time, we already made a good deployment of hardware, so that every colleague can work remotely through the intranet and their laptops at home. ZA Bank operates as usual during the epidemic period, to provide customers with 24/7 banking services.

If possible, can you share with us your future projects and plans you have in store in the coming year?

Currently, we are still focusing on the Hong Kong market.

We are putting customers at the heart of our product design to solve their pain points and allow users to enjoy offerings that break the boundaries of time and conventions. One example of this is our full suite of 24/7 services, available in our one-stop mobile app.

Our ultimate goal is to make banking and financial services more user-friendly and support Hong Kong’s underserved population, which will in turn accelerate fintech innovation in the city and, at the same time, encourage traditional banks to up their game in Hong Kong, which will ultimately benefit all of the city’s residents and consumers.

What is your outlook on Hong Kong’s virtual banks for the next few years?

Hong Kong’s fintech sector is growing fast. With the full launch of other virtual banks in Hong Kong this year, as well as traditional banks beginning to embrace AI and cloud technology, fintechs are set to disrupt the traditional model of financial services and blur the lines between different sectors. At the same time, traditional banks are expected to adopt more technology-based solutions to manage costs and resources, and achieve operational efficiency amidst a rapidly evolving and increasingly competitive industry landscape.

As we look to the financial industry’s future, one thing is certain: change will be the only constant. The broad themes we are predicting are around the changing nature of risk, a more competitive environment and increasing digital transformation, all underpinned by a focus on data.

The development of virtual banks in Hong Kong will promote fintech application and innovation, enabling the expansion of banking services to people with different financial needs, to foster financial inclusion. This was also the original intention behind establishing ZA Bank.

Meanwhile, traditional banks will speed up the innovation of services, which leads to industry transformation. The action will eventually benefit end-users and the market itself. By Frances Gagua ASIAN BANKING AND FINANCE | DECEMBER 2020 15

INTERVIEW

Amidst a crisis, Hong Kong’s Mox Bank sees boundless opportunities The neobank has outlined a bold plan to kickstart a new generation of virtual-savvy customers.

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he current crisis may have upended operations of Hong Kong’s banking industry, but for Hong Kong virtual-only lender Mox Bank, it is also a time that is rife with opportunity.

“We saw that as a result of COVID-19 outbreak, that more and more people are living their lives virtually or online—whether it’s online shopping, for work, study or entertainment,” Deniz Güven, CEO of Mox Bank, told Asian Banking & Finance in an exclusive interview.

“We believe the pandemic has made many more consumers in Hong Kong to adopt and be comfortable in living their lives virtually, whether it’s shopping, dining, learning,” he later added.

The plethora of prospects that the new normal has opened for digital financial offerors aligns with Mox Bank’s proposition, whose name reflects the endless opportunities it plans to create with its customers—which the lender cheekily refers to as “Generation Mox.” Unlike other virtual banking propositions in APAC, Mox does not only target a single generation or segment, but intends to focus on providing personalised banking services for each individual customer’s life stages.

“Our research spoke of wanting savings and spending advice, based on their life stages, not how much they already have. They want advice to help them track and achieve their life goals. They want even better security and fraud monitoring in these times of e-commerce. They want more services and rewards out of their banks, and this is what we will initially focus on,” said Güven. He also revealed that prior to its beta launch, the bank—whose parent company is the British multinational finance giant Standard Chartered, in partnership with PCCW, HKT, and Trip.com—conducted surveys with over 2,000 people to learn more what they desire from the neobank.

Mox’s first project is launching Asia’s first all-in-one numberless bank card in partnership with Mastercard—a physical card for spending and ATM cash withdrawals and without any printed card numbers, expiry date, or card verifications. Instead, these could be accessed from the Mox banking app.

Asian Banking & Finance had a chat with CEO Güven to learn more about Mox Bank’s entrance in Hong Kong’s banking industry as well as its vision of growth for the bank in the coming years.

What was the idea behind the name “Mox”? How does the name of your bank represent how you want to position yourself in the banking industry?

Many folks have asked how we came about with our name 16 ASIAN BANKING AND FINANCE | DECEMBER 2020

Mox Bank’s research found customers were keen for savings and spending advice, based on their life stages, not how much they already had.

Deniz Güven, CEO, Mox Bank

and logo. Well, it was actually quite a simple journey. We researched, asked potential customers, we went through more than 2,000 naming suggestions, before we found the one we all like—Mox. Mox can mean many things. It reflects the endless opportunities we can create—Mobile eXperience; Money eXperience; Money X (multiplier), eXponential growth, eXploration. It’s all up for us to define, together. As for our logo and our visual design, they are inspired by the round shape of a Hong Kong dollar coin, which is also a nod to our roots. We take pride in being one of Hong Kong’s newest virtual banks, complementing Standard Chartered’s heritage of being Hong Kong’s oldest note-issuing bank with over 160 years of experience in serving the community.

What are your thoughts in being one of Hong Kong’s newest virtual-only banks? What is your outlook for the local virtual banking industry?

We are excited about the opportunities ahead. Despite the many retail banks available in Hong Kong, with the many online banking services available to consumers, we believe there are still gaps in banking services that people need today. Currently, there is an underserved customer base in Hong Kong.

We’ve been listening to what customers want, and we’ve

INTERVIEW been researching on what’s missing in banking. We spoke with over 2,000 people and they all tell us they want new and better experiences. They spoke of wanting savings or spending advice, based on their life stages, not how much they have. They want advice to help them track and achieve their life goals. And we saw that as a result of COVID-19 outbreak, that more and more people are living their lives virtually or online—whether its online shopping, for work, study or entertainment.

What’s important to note is that Mox is connecting banking into people’s everyday lives and shaping a new model that just might reflect the future of banking.

Banking has to be simple, intuitive and even delightful, to consumers.

What is Mox Bank’s charm point? How do you plan to establish your foothold in the industry amidst competition from other lenders?

We are in the business of trust and we take pride in being a subsidiary of Standard Chartered Bank and its heritage of over 160 years in serving the community. Our differentiator from other VBs is our customer experience and the partners we have, bringing new ways of rewards and spending. You need partners to build an ecosystem and diversify distribution channels, particularly for the service-led bank that Mox is conceived to be. We wanted Mox to become integral to people’s daily lives, so working with partners that had already achieved this, to create joint service offerings, was key to our value proposition.

Tell us more about your offerings. Who is your target customer base? What services does Mox Bank offer, or plan to?

Mox is simply a smarter, easier, delightful way to bank.

Everything we do is based on extensive research to identify what truly matters to you and to solve real pain points.

We will deliver a suite of retail financial services as well as lifestyle benefits all in one place, with the focus of providing financial well-being to our customers.

We are reaching out to the Generation Mox in Hong Kong. They’re a tribe of creative, curious and connected people, who want to do more, feel more, see more. They’re digitally savvy, regardless of age. They want to grow, individually, financially, as a community and a society.

For starters, we’re bringing to Hong Kong a whole new experience for savings and spending. We want to get customers to form good savings habits, and we will help them automate this. Customers can set up specific savings goals and be in a better position to track their progress, and focus on achieving them one by one. Savings Calculator and other tools help customers to automate saving habits.

Customers will earn daily interest.

Why launch an all-in-one numberless card?

When you open a new account with Mox, you’ll receive a virtual Mox card, with which you can actually start to conduct your banking immediately.

But there’ll be instances that you need a physical bank card, such as spending and ATM cash withdrawals. We partnered with Mastercard in coming up with our Mox

Mox Bank says its preliminary goal is on winning “heart share”, rather than market share.

Card, re-defining innovation, security and privacy. Our numberless bank card has no card numbers, expiry dates or card verification value (“CVV”). This helps reduce your risk of losing personal information, making it one less thing to worry about.

All card information can be securely accessed in the Mox app. And if you ever lose the card, simply and instantly freeze it in the app. Users can enjoy ATM services at over 2,000 Jetco ATMs in Hong Kong, and all ATMs globally that accept Mastercard cards.

If possible, can you share with us your future projects and plans you have in store in the coming year?

We will start by offering a unique experience in savings and spending, and over time will introduce other services as well.

We aim to introduce some market firsts to Hong Kong consumers. Together with Mastercard, Mox is the first bank in Asia to launch an all-in-one numberless bank card—a physical card for both spending and ATM cash withdrawals without any printed card numbers, expiry dates or card verification value (CVV). This helps reduce customers’ risk of losing personal information, making it one less thing to worry about. All card information can be securely accessed in the Mox app. And if our customers ever lose the card, simply and instantly freeze it in the app.

How has Mox Bank been received by the public so far?

In early May, we started to invite Hong Kong people to sign up on our website and get early access to our services. We would like to take this opportunity to thank the applicants for their tremendous support of Mox. This is very successful, as we have had a very large number of registrations. We look forward to creating Mox with them.

We are very happy with our progress so far, and we’re excited that the launch is gathering pace. We’re proud to say that the team has continued to build the bank, with a work-from-home model. I have to hand it to my team here. Their perseverance, passion and commitment to the cause. Despite being of different cultures, different experience sets, they hunkered down and didn’t let the pandemic affect target deadlines. By Frances Gagua

Mox Bank’s numberless card

ASIAN BANKING AND FINANCE | DECEMBER 2020 17

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Hong Kong’s only homegrown virtual bank uses data to win big WeLab Bank achieved 10,000 customers just 10 days after launch.

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eLab Bank believes that it’s parent company’s seven-year head start in the online financial services space—and in leveraging data analytics—puts it at an advantage in meeting Hong Kong banking customers’ needs.

Just 10 days after it publicly launched in July, it has immediately amassed 10,000 customers. Two months later they already count 20,000 uses in their debit card.

Though impressive, the statistics came as no surprise to WeLab: they consider themselves masters at moving quickly and efficiently, according to Adrian Tse, Chief Executive of WeLab Bank.

More than that, they immediately respond to their customers’ needs.

“We conducted multiple user research studies long before we have launched,” Tse told Asian Banking & Finance in an exclusive interview. “For example, we came up with GoSave because users have expressed their difficulties from participating in the incumbents banks’ deposit offers. They are not able to withdraw their money before the maturity date, and if they choose to do so, they will be penalized for their actions.”

One of the two unique products that WeLab Bank introduced upon launch, GoSave is a time-deposit product that “harnesses the power of the community,” Tse said. “More people joining GoSave means a higher interest rate. We added the “minibus” element, which has personal connections with our users, to make the experience more memorable.”

What makes it better is that you can enter the GoSave service for as little as HK$10 (US$1.30). Customers can also pull out their money at any given period without any penalties whatsoever.

Not only that, the bank is quick to embark on partnerships that meet their customers needs. Recently, they partnered with online food ordering service OpenRice upon noticing that 70% of the transactions in their debit card are online orders for food.

“This is exactly what makes us different from the others: that is, our ability to leverage technology. In all these, technology helps us collect the data and also allows us to build and promote other offerings to our customers,” said Tse. What was the idea behind the name “WeLab”? How does the name of your bank represent how you want to position yourself amongst customers and the industry?

Lab basically stands for “laboratory” where scientists conduct their experiments and projects. It represents 18 ASIAN BANKING AND FINANCE | DECEMBER 2020

WeLab Bank amassed 10,000 customers within 10 days of its public launch in July, 2020.

Adrian Tse, Chief Executive, WeLab Bank

our goal to do different “experiments” to help customers take control of their financial journey, so that they can have fun while growing their money. What we are doing is leveraging technology to redesign a solution that is suitable for the customers during their financial journey.

Whilst we started our journey in consumer lending in Hong Kong, and eventually expanded to China and Indonesia, our ambitions did not stop here. WeLab wants to open up additional channels to extend a broader range of financial services. When the Hong Kong Monetary Authority (HKMA), the regulator, decided to give out eight virtual bank licenses last year, we think this would be a good time to move into the banking territory because [what virtual banking represents] is exactly our objective when we leverage technology in our financial services: that is, to bring a very different banking experience to customers in Hong Kong. In the end we were fortunate to get one of the licenses, and we continue to bring joy to our customers through innovative products.

Can you tell us more about the founders of the bank?

What inspired them to launch WeLab? The founder is Mr. Simon Loong, who is also our Group CEO. He’s been in banking for over 15 years and is very experienced in the field. I worked with Simon back in

INTERVIEW Standard Chartered, where we got first-hand experience on how traditional banking is fulfilling people’s banking needs. We saw that the products that’s been offered by incumbents are unable to serve everyone’s needs, where it is our believe that everyone should have simple and equal access to credit.

Simon then started WeLab Group, where we leveraged big-data powered technology and our know-how in risk management to revolutionize lending: by delivering seamless, purely online lending experiences accessible 24/7 to underserved consumers.

What are your thoughts in being one of Hong Kong’s newest virtual-only banks?

The online business model is in our DNA. We are very well positioned to demonstrate a very different banking experience to Hong Kong customers and some of the specific characteristics that we have will allow us to deliver this experience.

As Hong Kong’s only homegrown virtual bank, we have a very deep understanding of what types of financial products Hong Kong customers need. We are wholly owned by the WeLab Group who has a seven years track record of delivering online financial services. As of today, we’ve hit 46 million individual customers.

As for how and why we grooved with 46 million customers: we have a startup mentality and we move very quickly. Launching WeLab Bank is an example. We got the license last April and then under just about 400 days, we have already launched the bank. The bank was launched in late July, and within 10 days we have already accumulated 10,000 customer applications, which is very exciting for us. That’s how quickly we move things.

How has WeLab Bank been received by its customers and the general public so far?

We launched in late July and in just less than two months, we have shown some good results. More than 60% of our customers have used two or more of our product or services. As of interview, we have over 10,000 of GoSave transactions and also over 20,000 transactions on our WeLab Debit Card, and they continue to grow on a daily basis. We were happy that our customers come back and use it repeatedly, showing strong interest to use our products. We hope to bring further innovation to the market in the coming years to come.

Tell us more about your other services.

We have another product, the WeLab Debit Card, which is a tap-and-go card that is the first numberless card publicly launched in the market. With the debit card, you will not overspend because you can only spend the balance that is in the account.

Also, when we did our survey and talked to customers, they told us that they want to make sure the card is secure and private.

The concept of a numberless card is that even if someone picked up the card or whilst the card is being given to someone in the restaurant to get the bill, nobody can get your personal details or card numbers.

WeLab Group was started with the view of leveraging big-data powered technology and its founders’ knowhow in risk management to revolutionise lending.

To complement the physical card, we have a virtual card in the app as well. When our customers download the app, when they’ve successfully open an account, they can go online and do their online shopping at any time that is convenient.

What is your outlook for Hong Kong’s growing number of virtual banks?

I think these are very exciting times. From a market perspective, Hong Kong’s banking sector is huge. It has an annual income of about US$51b and we think there is room for virtual banks to take a significant piece of the market share.

Customers have also shown their enthusiasm in trying out virtual banks, as seen in how we achieved 10,000 customers in less than 10 days.

What we also observed during the COVID-19 pandemic period is that people are willing to do things on the phone or online. In fact, they are trying to avoid going to branches or leaving their homes. This is how the pandemic has become an enabler or a catalyst for people to try and use virtual banking services. With even more innovation coming to the market, I think the outlook for virtual banks in Hong Kong will be incredibly exciting.

What’s next for WeLab Bank?

We have a strong product roadmap and will roll out features in the coming months. All of our features will be customer centric with the goal to help them manage, grow, and save their wealth.

Interestingly, when looking at our customer demographics after launch, we found out that 30% of our customers are aged 40 and above. This was a pleasant surprise since we thought the majority of our customers will be in the younger generation. This shows that age is not a limit for being tech savvy.

As we continue to build innovative products, we will continue to leverage big data analysis to better understand our customers, so that we can provide a tailor-made and diversified portfolio of products to better help them reach their goals. By Frances Gagua

WeLab Bank partnered with Mastercard to launch a numberless card last July.

(Source: WeLab)

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INTERVIEW

No ‘one-size-fits-all’ for mobile bank TMRW

UOB’s mobile-only bank makes use of personalization to attract Thailand and Indonesia’s tech-savvy generation.

T

he ASEAN region boasts of approximately 96% mobile phone penetration rate with a density of 967 per 1,000 regional residents, and 66% of which are smartphone use, according to a paper published by PwC. Separately, 60% of the ASEAN population are under 35 years old and are highly-connected, mobile-first consumers who do most things on smartphones.

With these in mind, Singapore financial giant UOB designed its first fully digital bank TMRW to serve the region’s digital generation. Unlike other banking apps, TMRW’s interface operates similar to a “feed” like Instagram or Facebook.

The app uses AI-technology, machine learning, and data analytics in order to better anticipate what their customers want and need. As Kevin Lam, head of TMRW Digital Group, explains, “the more a customer interacts with TMRW, the better TMRW understands the customer.”

“We did not build a one-size-fits-all digital bank. Instead, we designed TMRW to be nimble to ensure we address local requirements and are sensitive to the nuances in languages and cultures in each market, whilst ensuring that the core TMRW experience of offering simple, transparent and engaging experiences remains the same,” Lam added.

Already, just a year after it launched, TMRW achieved the third highest net promoter score (NPS) among all banks in Thailand as at April 2020 and is ranked number one in terms of NPS for credit cards.

Asian Banking & Finance spoke with Lam to learn more about the mobile-only bank TMRW. How does being a mobile-only bank make your organisation different from other digital banks in the Southeast Asia region?

We have designed a completely new business model for TMRW, ATGIE—which stands for Acquire, Transact, Generate data, Insights, and Engage—which focuses on customer engagement as the primary goal.

Our engagement-focused business model enables us to scale based on a customer base of loyal advocates. By acquiring and retaining customers who are highly engaged with the TMRW banking experience, they then become advocates for TMRW. In turn, these advocates will be more likely to recommend TMRW to their friends and family.

In the long run, our digital bank business model lowers the cost of acquisition and enables us to scale in Thailand and Indonesia as well as regionally as we expand to other ASEAN markets.

Can you expand more on your data-driven model?

How does this feature help personalise each customer’s experience with TMRW? We want to deepen our engagement with our customers 20 ASIAN BANKING AND FINANCE | DECEMBER 2020

UOB designed TMRW to be nimble to ensure it was sensitive to the nuances in languages and cultures of each market.

Kevin Lam, Head of TMRW Digital Group, UOB

through a personalised banking experience, so we invested in financial technology (fintech) solutions in the areas of AI, machine learning and data analytics to offer them a customised experience based on their wants and needs.

For example, our partnership with Meniga makes it easier for customers to recognise and to track their expenditure.

Our investment in and partnership with FINTECH firm Personetics powers TMRW’s insight engine which transforms transaction data into meaningful insights that anticipate our customers’ needs such as reminders to make bill payments or suggestions to tap personal financial management tools. In Indonesia, TMRW also taps an AI-driven credit assessment engine provided by Avatec. ai to assess the credit worthiness of customers by utilising alternative data and machine learning.

We are also the first bank in Southeast Asia to set up a dedicated Engagement Lab (eLab). This unit uses the latest technology and behavioural insights to deepen customer engagement. It adopts a test and learn approach to ensure that every digital conversation with a customer is consistently relevant, familiar and engaging to them, and easy to understand.

We have already set up Engagement Labs in Singapore, Thailand and Indonesia, and we are in progress to establish further eLabs resources across other ASEAN countries.

INTERVIEW track of their spending, savings and bill payments, and is the first bank in Thailand to provide each individual customer with insights specific to their transaction behaviour.

Recently, we also launched a real-time expense tracking feature in which participants can test and provide feedback to refine new TMRW features before they are launched to the larger customer base.

Through research, we found that Thailand’s digital generation also appreciates relevant guidance to help them keep track of and manage their finances better.With that in mind, we designed a money management game to help TMRW customers in Thailand meet their savings goals in fun-sized, achievable steps. The game encourages TMRW customers to save money and progress to higher levels.

The first question is always: “What is the customer’s need or pain point that needs solving?” If the current design does not answer that question, we go back to the drawing board.

Can you give us an estimate of when you believe you will start making a profit, if you haven’t already?

Our ambition is to achieve a steady-state NPS of above 60 and to operate at a steady-state cost-to-income ratio of 35% in the next four years.

TMRW debit card

Tell us more about your target customer base? What services does TMRW offer?

As millennials have less complex financial needs at their current stage in life, we started by offering TMRW customers a savings account and credit card bundle. By deepening engagement with our customers through an instinctive digital experience, we hope that they will want us to grow with them through their life stages.

Take opening a bank account in Thailand as an example.

TMRW redesigned the account opening process for our Thai customers so that they need not visit a physical branch. Instead, customers authenticate at one of the 350 digital kiosks that are located in high foot-traffic areas across Greater Bangkok. By tapping Thailand’s National ID database and its Sandbox Banking Initiative, TMRW became the first bank to offer customers both fingerprint matching and facial recognition capabilities for a speedier and safer account opening experience.

In Indonesia, we adopted a video call onboarding model in adhering to the different local regulatory requirements. As some of our customers faced connectivity and bandwidth issues faced, we created a text-and-video model that minimise dropped calls and data usage.

With these models in place, our customers can open a TMRW without having to visit a physical branch to do so.

With COVID-19 restrictions in place, this model is especially helpful to customers as they stayed home and stayed safe.

Our customer-centric approach also focuses on enabling our customers to manage their finances wisely. For example, we take away the hassle of our customers having to keep

With more customers staying home, we are seeing an increase in online spend.

For example, online retail spending among TMRW customers in Thailand doubled in June 2020 as compared with December 2019.

Has the pandemic affected your operations?

The COVID-19 pandemic has accelerated digital adoption among consumers and there are many banks that have fast tracked their digital transformation efforts in order to serve customers better during this time.

As a mobile-only bank, we have the digital capabilities to serve well the needs of our customers during this period.

With more customers staying home, we are seeing an increase in online spend. For example, online retail spending among TMRW customers in Thailand doubled in June 2020 as compared with December 2019. We are also seeing an increase in customers who choose to save during these uncertain times. In June 2020, deposits from our TMRW customers in Thailand grew by five times as compared with a year ago.

Amongst Southeast Asian markets what led to your decision to expand in Indonesia first?

We officially launched TMRW in Indonesia within 16 months of launching in Thailand. We were able to launch in two diverse ASEAN markets so quickly as TMRW is purposefully built on UOB’s standardised regional information technology (IT) infrastructure.

We have achieved several milestones in serving our TMRW customers in Thailand since launch and have incorporated learnings from Thailand to enhance the banking experience for our customers in Indonesia.

As a mobile-only bank equipped with technological capabilities in the areas of AI, machine learning and data analytics, we are able to serve well the growing digitally savvy population in Indonesia by providing them with a seamless, transparent and personalised banking experience that suits their needs. By Frances Gagua ASIAN BANKING AND FINANCE | DECEMBER 2020 21

FINANCIAL INSIGHTS: RESTRUCTURING

What should banks be doing to avoid repetitive overhauls with few results to show?

What banks are getting wrong in their restructuring plans Lenders are relying too much on past risk data and numbers instead of long-term growth prospects.

I

n February, HSBC declared that it would be undergoing yet another major overhaul that will see the lender shave more than US$100b in assets and cut 35,000 jobs from its 232,000-strong global headcount. The announcement may have stunned some, but it was also somewhat inevitable: just days after the announcement, the lender revealed that its profits plunged 53% in FY2019 due to high impairment charges and credit losses. This would be the third time that HSBC is restructuring in just a decade.

HSBC isn’t the only major bank undertaking a massive revamp, however. Just a month earlier, UBS cut 500 jobs in its Europe private banking arm. Last year, Deutsche Bank outlined a $8.29b plan—and shaved a quarter of its global staff in the process—that other big players called “radical” and “challenging”.

Australia’s Westpac have not made 22 ASIAN BANKING AND FINANCE | DECEMBER 2020

Banks tend to have a quite mechanical approach to restructuring and tend to neglect future growth potentials.

any grand pronouncements, but it has outlined a strategy to cut US$400m in yearly expenses. These lenders all reported shrinking margins and up to billions of losses in the past year.

Now, with the COVID-19 crisis plunging the global economy into a deep recession, more banks may face the decision of having to revamp their corporate structures to save costs and boost profits. Which begets the question: what should they be doing in an overhaul, exactly? What are they missing—and what must they do to ensure success and avoid repeating the process in a few years (and incurring another round of extra costs, in billions)?

Beyond the numbers One problem is that banks are being too mechanical and too past-oriented in their restructuring plans, according to Boston Consulting Group partner Tushar Agarwal: that is, focusing too

much on the numbers and historical risk data.

“Banks tend to make a quite mechanical approach—that is, based on the numbers only—for restructuring and tend to neglect future growth potentials and investment needed. We have seen banks in the past crisis [who] made a lot of restructuring and too much optimisation on their portfolio, but ended up losing their long-term growth engine,” notes Agarwal.

Lenders who are doing it right are those reviewing the riskiest parts of their loan portfolios, he said. These are the services involving mid-sized companies and small and medium enterprises (SMEs) who are the most vulnerable to sudden market fluctuations, such as the pandemic.

Agarwal warned not to abruptly let go of business lines, especially with the ongoing pandemic, but to instead optimise them.

FINANCIAL INSIGHTS: RESTRUCTURING

Joydeep Sengupta

German lender Deutsche Bank has outlined a ‘radical’ overhaul that will cut more than $55m of assets. (Photo source: Markus Bernet)

“Best practice banks are prioritizing review of the midcorporates and large SME businesses as they are most susceptible to the ongoing flux. But this is not the time to let go of business lines, but rather, a time of building the fundamental infrastructure needed to respond efficiently to economic relief policies as well as process the extraordinary volume of loan requests they are receiving,” he said.

Managing and mitigating credit risk remains core to a successful overhaul. However, lenders have the tendency to look back, and not forward, in devising their stress-test and risk-mitigation strategies.

“Since risk drivers related to the COVID-19 outbreak are not currently captured by credit ratings systems, traditional credit metrics and data sources will not drive the right decisions for renewals and new requests. Also, existing credit risk frameworks and models are largely built based on historical risk data, thus reflecting backward looking views,” Agarwal explained.

“To address that problem, banks need to adopt a new and more dynamic approach that applies data science and analytics.”

Amidst the ongoing crisis, Asian financial institutions have risen up to the challenge by designing specific interventions to better manage end-to-end credit risk, says Joydeep Sungta, senior partner at McKinsey.

“Asian financial institutions have designed specific interventions

to manage end-to-end credit risk.

Updated credit underwriting strategies may include, for example, a request for a COVID-19 contingency plan from corporate clients at origination,” noted Sungta.

“Similarly, sharper risk identification, monitoring, and measurement approaches can identify clients with higher vulnerability to primary and secondary effects of the COVID-19 outbreak and anticipate deteriorating creditworthiness,” he added.

Further, Sungta noted that Asian banks have explored options to quickly reorient resources from underwriting to monitoring and collection, including dedicated training sessions and outsourcing.

Data and analytics methodologies have also helped banks neutralise the impact of COVID-19 on capital, provisioning, and the existing stresstesting models.

Meanwhile, BCG’s Agarwal noted that most banks are currently focused on tackling immediate priorities such as the protection and well-being of their staff, streamlining expenses, and ensuring sufficiency.

But these activities only fall in the first part of BCG’s ‘Flatten-FightFuture’ framework. According to Agarwal, lenders should also begin to look beyond that.

“Forward-looking banks have already started to move towards ‘fight and future’ where they are now preparing for the recovery— rethinking the product offering

Ivan Tan

Tushar Agarwal

for a much more digital economy, reimagining the sales experience and exploring new operating models for the staff, including extended remote working. Senior management of cash-rich banks are also investing energy into exploring breakthrough medium-term ideas that can provide an edge to them in capturing new segments that they were earlier unable to,” he added.

Stating the obvious: digital, digital, digital Institutions who failed to ride in the digital wave of the last few years are now forced to play catch-up amidst this world of lockdowns and social distancing, whilst traditional lenders who have long established their technological capabilities have the chance to better learn just why the future is digital.

In Singapore, the pandemic crisis and the ensuing circuit breaker measures has led customers to seek out banking services digitally out of necessity, even those in the older age group, notes Ivan Tan, S&P Global Ratings analyst.

“The case for digital banking services in Singapore has become stronger due to COVID-19. A record number of digital banking transactions are taking place during the COVID-19 outbreak, pointing to a strong acceleration in fintech adoption. The number of customers who switched to digital banking have grown significantly, including those in the 60-80 age group,” he said.

“For example, more than 100,000 DBS Bank customers made their debut digital transactions from January to March 2020. Evidently, consumers who were initially resistant to digital channels are adopting out of necessity during these challenging times,” Tan added.

But lenders who were first to invest in digital also have yet to show for it, according to Tan. In fact, more costs may be necessary in the future. “On the flip side, the big Singapore banks that began their digital journey several years ago have yet to demonstrate significant cost savings or income boost. These benefits will accrue mainly from branch and staffing reductions, which ASIAN BANKING AND FINANCE | DECEMBER 2020 23

FINANCIAL INSIGHTS: RESTRUCTURING Economic profit generated by banks continues to slow down

Risk drivers related to the COVID-19 outbreak are not currently captured by credit ratings systems.

Source: Boston Consulting Group

will likely need sizable investments in digital innovation or solutions and information technology infrastructure,” Tan said.

“For now, the profitability and efficiency ratios of the Singapore banks we rate have remained flat, and they have largely retained existing traditional infrastructure such as automatic teller machines and branches,” Tan concludes.

Going digital doesn’t just mean revving up their digital services—it may also mean a significant revamp of work arrangements by allowing employees to work from home, for example, according to McKinsey’s Sengupta. “To effectively manage the future downside risk on revenue, banks should target becoming lower-cost franchisees by considering strategic cost programs that draw on multiple cost-saving strategies, including remote working,” he said.

Worthiness, necessity So are restructurings now imminent for most lenders given the expected period of low profits? Not necessarily, according to BCG’s Agarwal.

“Restructuring is not a necessity for the banks but it is good to define a clear strategy for their credit portfolio with a forward-looking view, and rebalancing their portfolio,” he said. For example, banks should be able to provide fresh viewpoints to their corporate clients, even through digital means such as Zoom or Microsoft Teams. “It is a good time to reignite the corporate relationship 24 ASIAN BANKING AND FINANCE | DECEMBER 2020

and be seen as a trusted long-term partner rather than a price-bidder.”

Those undergoing overhauls should look into investing in data analytics and digitising their operating models. For wholesale banking, for example, having just a lending-only proposition with their client base without getting revenues from cash, amongst others, is a lossmaking endeavour given the cost of credit and operational costs impact, according to Agarwal.

“Hence, investment in analytics to build a stronger early warning and digitization of the operating model would be critical to anticipate losses, reduce costs of operations and increase share of wallet,” he added.

Analysts agreed that banks may have to look for new revenue sources whilst considering how the pandemic may impact their work arrangements and corporate structure.

“Emerging consumer trends

HSBC announced its third restructuring in a decade in February.

include greater receptiveness to digital channels—particularly among digital-averse segments such as elderly or rural populations. After the crisis, employees may be more inclined toward remote-working arrangements, which will have repercussions on everything from real-estate costs and planning for information technology spending,” noted McKinsey’s Sengupta.

“Meanwhile, banks could face a prolonged period of lower profits and tighter balance sheets, reduced interest rates due to regulatory pressure, and increased operational costs due to new safety measures.

These combined factors can reshuffle priorities and point the way toward new ways of serving customers,” Sengupta added.

BGC’s Agarwal also noted that given the ongoing pressure on lenders to take on and provide credit, it is a time for bankers to explore other revenues sources, such as cash, trade and treasury services.

“And this is a good time for many of the challenger banks to invest resources into building capabilities given they have idle capacity internally as well as many of the promotional expenses and projects are on hold,” he added.

BGC’s Agarwal cautions on jumping the gun amidst the ongoing crisis. “Restructuring in response to short-term stimulus results in pushing the problem or issue to later rather than resolving it,” he claims.

“At the end, the purpose of restructuring is making both banks and industries healthier,” Agarwal concluded. By Frances Gagua

ASIAN BANKING AND FINANCE | DECEMBER 2020 25

RANKINGS: SINGAPORE

Singapore central business district skyline

Pandemic drives Singapore banks to accelerate digital offerings In the face of a crisis, the finance sector is scrambling. It needs to be both quick and creative.

T

he pandemic has been challenging for Singapore banks as they navigate their way through economic disruptions and changing demands.

In addition to implementing new work arrangements, banks also have to deal with their exposure to particular sectors which have been severely hurt by the crisis. But how has the banking industry been coping, and what have they learned from this so far?

Singapore Business Review’s annual Bank Rankings for 2020 revealed notable changes amongst the top banks in terms of employee numbers. DBS retained its number one spot with an employee count of over 12,000 as of April this year.

OCBC jumped four spots to clinch second place with 10,032 employees.

UOB fell one spot to third place but still maintained their employee count above 9,000. Standard Chartered, which shared the third 26 ASIAN BANKING AND FINANCE | DECEMBER 2020

spot with Citi a year earlier, slipped to fourth with 9,000 employees.

Rounding off the top five is Citi with 8,500 employees.

Despite benefitting from a relatively stable economic and political environment, banks still have to navigate a rough operating environment brought about by the pandemic. In particular, Singapore’s three major banks – DBS, UOB and OCBC – are in danger of asset quality and profitability losses due to their exposure to a decaying playing field, according to a Fitch Ratings commentary. Whilst the cracks may start to show in 2021, forecasted impaired-loan ratios are sitting at around 2.5%, higher than the current 1.5% impaired-loan ratio.

In early July, Fitch Ratings released another commentary placing the three banks on the negative rating watch due to the pandemic and the impact of the limited headroom in their

The crisis has instilled an urgent need for banks to be proactive and agile in times of these unforeseen circumstances.

viability-driven ratings. Further slowdowns or weaker recoveries in key operating markets may put additional pressure on their operating environments, it warned.

If anything, CIMB Bank Singapore chief executive Victor Lee told SBR that the crisis has instilled an urgent need for banks to be proactive and agile in times of these unforeseen circumstances amidst the pandemic.

“We need to adopt an agile way of working, such as conducting online workshops, looking into business process reengineering and complimentary virtual learning so that our teams are constantly upskilling in order for the transformation journey we embark on,” Lee explained.

Even if CIMB’s commercial banking segment has been rather resilient, its SME clients have been thoroughly impacted. In order to help their clients cope

RANKINGS: SINGAPORE Singapore banks: Q1 2020 net interest margins (NIMs)

Victor Lee

Source: DBS Group Research

with loan restructuring, the bank has put in place several measures such as deferment extension on both principal and interest until December 2020. Back in February, it rolled out its C-19 programme where eligible enterprises can avail of loans up to $5m, along with a favourable 2-3% interest rate over a five-year period.

It has also increased its e-supply chain financing programme with a limit of up to $100m (US$71.6m) in order to grant a sufficient working capital financing support for the suppliers community on the platform of CIMB’s e-procurement service provider partner.

Digitisation If there’s anything remotely positive about the current situation, it is that it has fast-tracked the adoption of digital payment methods, with the Lion City being considered as a trailblazer and a model across Asia Pacific. Singaporeans are now increasingly favouring contactless payment methods over cash, with 81% believing it is a better and cleaner way to do payments, according to a Mastercard survey.

On top of that, a SingSaver study revealed that 80% of Singaporeans will stick to online banking even after the pandemic subsides.

Interestingly, 69% aged 54 and older have gotten comfortable with using online banking tools, the same percentage as those aged 35 to 44 but slightly higher than those aged 44 to 55 (67%).

The Monetary Authority of Singapore (MAS) is expected to hand out up to five digital banking

licences to 14 eligible applicants this year. Traditional banks don’t seem to be too fazed by the incoming competition given that the sector is a “hard ground” for digital newcomers, a UOB Kay Hian analysis report noted, but a Moody’s report believes that small foreignowned lenders may have a hard time making the adjustment.

“Digital literacy is clearly on the rise, and it is heartening to see that all age groups are picking it up fast.

I don’t think that it will lead to the death of cash transactions, but I believe that the adoption of cashless transactions will surge, as customers are concerned about the hygiene levels when dealing with cash payments,” Lee said.

He also added that customers are also savvier when it comes to cashless payments and they trust that banks and merchants alike will implement tight security measures to ensure security on personal data.”

In order to fulfill their customers’ need for digital services, CIMB has partnered with local chatbot provider Pand.AI to develop its own chatbot named Eva that will assist business owners on enquiries regarding financial schemes that will help them through the crisis.

As most of their banking products and services can be accessed online, they have hired a team that will look into any gaps in their digital services that need to be improved.

“What works for us is that most of our products and services can be accessed online, and with only two branches, customers can bank with us on their mobile phones from anywhere that is convenient for

them,” CIMB’s Lee commented.

Maybank Singapore has also been taking advantage of the digital advent, being aligned with the Smart Nation initiative. The bank has granted initiatives to promote their online services such as cash rewards, waiving of fees for outgoing FAST and PayNow transfers.

To help businesses accept PayNow payments, the bank has collaborated with Liquid Group for an all-in-one QR payment terminal for merchants to generate a dynamic QR code for each individual customer to scan and pay using PayNow. Nevertheless, both lenders recognise that not everyone may be receptive to the digital disruption.

There will still be people who are sceptical about cashless payments due to security and data protection and would rather stick to using cash.

Sharing this sentiment, Maybank believes that education about cashless payments is indeed vital in ensuring safe digital transactions.

“Whilst we recognise the mature customer segment may prefer cash, the younger segment prefers to tap a bank card or scan their mobile phones to make a payment. Our aim is to ensure that no customer is left behind in this digital age by making our services user-friendly and educating our customers on how to transact digitally safely,” Manybank’s spokesperson added.

Road to recovery As the circuit breaker period eases, banks are eager to return to some semblance of past normalcy whilst maintaining contingency measures adapted as response to the pandemic. Branches are being cleaned and disinfected and customers are reminded to observe physical distancing measures. Staff are going back to their offices, albeit slowly and limited in number.

Looking forward, CIMB will embrace what it calls the “CHIDA approach”, Lee said, meaning that the bank will take on a “customerobsessed, high-performing, have integrity” attitude. Maybank will gradually scale up operations in addition to reopening some branches, as well as the resumption of select wealth and investment services, the the bank’s spokesperson stated. By Alyssa Divina ASIAN BANKING AND FINANCE | DECEMBER 2020 27

RANKINGS: SINGAPORE 2020 RANK

BANK

NUMBER OF EMPLOYEES (2020)

COUNTRY HEAD

2019 RANK

NUMBER OF EMPLOYEES (2019)

1

DBS BANK

>12,000

Shee Tse Koon

1

11,693**

2

OVERSEA-CHINESE BANKING CORP

10,032

Samuel Tsien

4

6,700

3

UNITED OVERSEAS BANK

> 9,000

Wee Ee Cheong

2

> 9,000

4

STANDARD CHARTERED BANK

9,000

Patrick Lee

3

9,000

5

CITI SINGAPORE

8,500

Amol Gupte

3

9,000

6

HONG KONG AND SHANGHAI BANKING CORPORATION

3,550

Tony Cripps

5

3,391

7

J.P. MORGAN CHASE & CO.

3,000

Edmund Lee

6

3,000

8

MALAYAN BANKING (MAYBANK SINGAPORE)

2,000

Dr. John Lee

8

2,000

9

CIMB BANK

1,300

Victor Lee

9

1,270

10

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

1,220

Jean-Pierre Michalowski

10

1,178

11

BANK OF CHINA

955

Cheng Jun

14

580

12

RHB SINGAPORE

737

Danny Quah

12

722

13

MIZUHO BANK

>700*

Guan Yeow Kwang*

13

700

14

STATE BANK OF INDIA

140**

Kishore Kumar Poladusu*

15

140

15

ICICI BANK

110

Anupam Verma

16

111

16

BANK OF INDIA

77**

17

77

17

UCO BANK

42**

18

42

TOTAL

62,363

LEGEND *DATA FROM BANK WEBSITE OR MAS **DATA RETAINED FROM PREVIOUS TABLE/RANKING

28 ASIAN BANKING AND FINANCE | DECEMBER 2020

Geetha Nagarajan*

Rajeev Gupta*

61,604

We Are Grateful for Your Trust Thank you for choosing Us as Your strategic partner, to help You grow Your business with Our complete nancial solutions across ASEAN

Bank CIMB Niaga is the award winner at ABF Corporate and Investment Banking Awards 2020 for:

Corporate & Investment Bank of the Year – Indonesia

Project Infrastructure Finance Deal of the Year – Indonesia

Syndicated Loan of the Year – Indonesia

ASIAN BANKING AND FINANCE | DECEMBER 2020 29

RANKINGS: HONG KONG

Hang Seng Bank has rolled out more than 140 innovations for its digital services in 2020.

Pandemic crisis speeds up online, mobile banking adoption by 200% Local banks are ramping up digital offerings by expanding their remote banking services.

C

hange had come to Hong Kong’s banking industry with the dawn of virtual banking, but never before had the lenders’ triedand-tested ecosystem been shaken as much as it had during the ongoing pandemic crisis. Now, banks are scrambling to fill up the cracks in their digital servicing capabilities to continue operations amidst a new world of face masks, health precautions, and social distancing—or else say adieu.

In Hong Kong Business’ 2019 Licensed Banks rankings, Hong Kong ans Shanghai Banking Corporation (HSBC) managed to maintain their headcount at 31,000, becoming the largest bank the list. Second placer Bank of China Hong Kong (BOCHK) reported staff numbers of 12,592, whilst Hang Seng Bank’s employee count is at 8,515. Standard Chartered (Hong Kong), who nabbed the fourth spot, had around 8,500 employees and 30 ASIAN BANKING AND FINANCE | DECEMBER 2020

A significant number of banking customers still greatly value the reassurance that comes from face-to-face assistance and advice.

fifth placer Bank of East Asia (BEA) Hong Kong reported 5,564 employees in the city. Further, Dah Sing Bank also reported a 2.4% YoY rise to 2,970 as of end-2019 over its 2018 figures.

Overall, the number of employees across 19 local licensed banks rose marginally by 1.87% to 92,545 as of April 2020 compared to only 90,844 in 2019, on the back of dramatic increases and contractions across lenders.

However, many of these numbers were reported before the full effect of the pandemic was expected to be felt, which could reflect by end-Q3 or even as late as Q1, 2021.

HSBC announced its plan to axe 35,000 workers globally from its more than 232,957-strong global fleet as part of its third major restructuring in a decade. Just in Q1, the lender also saw its pre-tax profits plummet 48% to $3.2b in Q1. “You will have seen that our profits fell in the first quarter, and

virtually all economic forecasts point to challenging times ahead,” Quinn said in a memo to staff in June. He added that layoffs were “even more necessary today”, as a result of the worsening business environment.

Near, far, wherever you are The past few months saw lenders roll out a plethora of new or improvements to their digital banking services as they strive to maintain close ties with their customers despite the physical distance imposed by lockdowns across the city.

Although BOCHK kept its more than 190 branches open, the bank actively encouraged customers to access services online by rolling out additional services.

“We have introduced a number of fee concessions for our electronic services and extended service hours of certain online banking services, such as forex exchange, setting up of

RANKINGS: HONG KONG time deposits, opening of savings and investment accounts, and activation of mobile banking and internet banking services,” a spokesperson from BOCHK told Hong Kong Business in an exclusive correspondence.

Hang Seng Bank, who nabbed the third spot in the rankings, revealed that it has rolled out more than 140 innovations and enhancements for its digital services in 2020. Many of these involve remote video and audio meeting capabilities.

“Whilst many may prefer to use online, mobile and automated channels for their day-to-day banking, a significant number still greatly value the human touch and reassurance that comes from face-to-face assistance and advice when dealing with more complex financial needs,” a spokesperson from Hang Seng Bank told Asian Banking & Finance.

The bank is currently using video conferencing app Zoom to have effective “face-to-face” meetings with their customers.

Overall, Hang Seng Bank reported a rise in its e-banking transactions, with a 50% increase in June compared with January. Average number of new e-banking registrations also rose by 110% during the same period.

Other banks reported a similar trend. BOCHK reported a 56% increase in total mobile banking transactions, and over 20,000 new US Stock Accounts since the year began— whilst the number of transactions for both setting up time deposits and securities trading online jumped by as much as 40%.

In an exclusive interview, Citi Hong Kong revealed that more than 77% of its clients are active users of their digital banking channels. The bank saw its institutional clients open over 1,000 accounts digitally in APAC, of which over 50% are from Hong Kong. Citi also noted that banking behaviours had already begun to change even before the pandemic struck, the latter which only hastened the inevitable.

“There has been a lot of talk on how COVID-19 will reshape the way we live, work, and do business. The current situation will only accelerate the broad shift to digital, which has already been transforming the

banking industry,” a Citi representative noted in response to queries.

“The pandemic has necessitated us to engage with each other digitally, and to a certain extent, digital is now the preferred way for clients to engage and bank with [Citi].”

BOCHK echoed a similar assessment of customer behaviour.

“The epidemic has become an unexpected catalyst in making more customers and businesses turn to digital channels,” a spokesperson stated, saying that they are working to digitalise their services to address customer needs anytime, anywhere.

Local lenders still have a lot to patch up with their digital and mobile banking capabilities, however. A recent report by consulting management firm Sia Partners noted that not a single Hong Kong mobile app made it into the top 10 best banking and personal finance apps globally.

Amongst local banks, Londonbased HSBC and Hang Seng Bank were identified as the top-performing apps in the city. On the other end of the spectrum are the apps of familyrun Hong Kong banks BEA Hong Kong and Dah Sing Bank.

Safety first It was not just the digital front that experienced a period of rapid change: now that lockdowns have been lifted, bankers and customers find themselves facing a new normal of social distancing and other strict health and safety measures being strictly implemented.

For banks, the biggest change lies in their workforce, with remote working becoming the new norm. When the infection rate first began to spike, Citi immediately heeded calls for social distancing and enabled over 90% of their staff to work from home. The arrangements continued until midMay, when the infection rate gradually decreased, prompting the lender to reduce its overall share of WFH staff down to 50%.

BOCHK also implemented a splitteam arrangement, with only essential staff at the office, whilst the remainder worked remotely from their homes.

Bankers now returning to the office are met with a plethora of new measures to combat the spread of

The epidemic has become an unexpected catalyst in making more customers and businesses turn to digital channels.

the virus. This meant an everyday life of face masks, constant temperature checks, and frequent handwashing.

Many will likely get used to working confined in transparent spaces, with plastic walls and working in halfempty premises.

Hang Seng Bank, for example, placed portable acrylic screens in their open bank counters. Citi is also reportedly planning to put plastic partitions in some workstations, whilst ramping up their cleaning schedules.

“Our premises cleaning protocols are elevated to include daily cleaning with disinfectant supplemented by hourly cleaning of all high touch areas, including elevator buttons, door handles, work cafés and pantries,” Citi’s spokesperson shared.

To the rescue Banks also saw themselves rising to help their pandemic-stricken customers weather the ongoing crisis—at the possible expense of asset quality. A report by Fitch early this year already expects lower profits for 2020, the crisis only compounding the earlier negative effects brought about by the local sociopolitical protests.

Many lenders offered mortgage and loan relief for their customers.

For example, BOCHK rolled out a moratorium for commercial and residential properties loans. The measure has since been extended to cover subsidised sale flats under the Hong Kong Housing Authority.

“This measure has been well received since its launch, with over 18,000 customer enquiries and 3,400 cases being approved,” the BOCHK spokesperson said.

Many of these measures were aimed to provide relief to small and medium enterprises (SMEs). BOCHK introduced a 100% loan guarantee that allowed SMEs to borrow as much as $4m (US$510,000). The bank has approved more than 3,100 applicants for the guarantee and recently launched a special loan scheme for SMEs without collaterals. Likewise, Citi announced a principal moratorium of up to six months for eligible mortgage clients, primarily small and medium enterprises (SMEs) who were the most impacted by the downtrodden economy. By Frances Gagua ASIAN BANKING AND FINANCE | DECEMBER 2020 31

RANKINGS: HONG KONG 2020 RANKING

BANK

Number of Employees 2020

Number of Employees 2019

2019 RANKING

CEO OR COUNTRY HEAD

1

HONG KONG AND SHANGHAI BANKING CORPORATION

31,000*

31,000

1

Peter Wong (Deputy Chairman and Chief Executive, Asia Pacific)

2

BANK OF CHINA (HONG KONG)

12,592

12,278

2

^

3

HANG SENG BANK LIMITED

8,515

8,523

3

Louisa Cheang

4

STANDARD CHARTERED BANK

6,500

6,000

4

Mary Huen

5

THE BANK OF EAST ASIA, LIMITED

5,564*

5,376

5

Adrian LI Man-kiu and Brian LI Man-bun

6

CITI HONG KONG

4,200

4,500

6

Angel Ng

7

DBS BANK (HONG KONG) Limited

4,000

4,000

7

Sebastian Paredes

8

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA)

3,187*

2,966

8

Wu Long

9

DAH SING BANK

2,970*

2,482

10

Hon-Hing Wong (Derek Wong)

10

CHINA CONSTRUCTION BANK (ASIA) CORPORATION

2,500**

2,500

9

Jun Zhang

11

OCBC WING HANG BANK

2,104

2,165

11

Wu Beng Na

12

CHINA CITIC BANK INTERNATIONAL

2,000

2,000

12

Bi Mingqiang

13

CHONG HING BANK

1800

1500

15

Jianxin Zong

14

CMB WING LUNG BANK (renamed from Wing Lung Bank)

1763

1,674

13

Hong Bo

15

SHANGHAI COMMERCIAL BANK

1,633

1,664

14

David Sek-chi Kwok

16

FUBON BANK

1,000

995

16

Raymond Lee

17

CHIYU BANKING CORPORATION

620**

620

17

Zheng Wei

18

PUBLIC BANK

564**

564

18

Tan Yoke Kong

19

TAI SANG BANK

33

37

19

Patrick Ching Hang Ma

TOTAL

92,545

90,844

*as of December 31, 2019 **figures retained from 2019 data ^ As of press time, BOCHK has not yet appointed a new CEO or Country Head. It will be announced in a later date

32 ASIAN BANKING AND FINANCE | DECEMBER 2020

FINANCIAL TECHNOLOGY: LENDELA moneylenders like Accredit, IFS Capital and Minterest, amongst its partners.

The platform is 100% free-of-charge for customers. Lendela gets a service fee once the borrower accepts an application using the platform.

Since launching in 2018, Lendela has processed more than 10,000 loans applications in Singapore and Hong Kong. The platform plans to expand its market over the next few months, with an announcement coming by the end of the year.

Lendela also plans to add-on to its customer identification services, as well as provide alternative and ‘actual’ credit scoring in the platform itself, whilst continuing to speed up and digitise the loan application process.

Nima Karimi, CEO and founder, Lendela

How Lendela matches up customers to lenders

The platform matches up customers’ loan needs from banks and lenders.

T

aking out a loan can be a daunting process for customers.

Inquiring across different banks and lenders already takes up days of surfing the net, hours of calls, and waiting at your local lender branch.

Then there comes the repetitive process of filling out application forms, waiting for your loan to be processed—all the while possibly not knowing that a better deal is just around the corner.

This was exactly what Nima Karimi, founder and CEO of Singapore-based loan matching platform Lendela, found when he first encountered the lending environment in Asia’s two biggest financial centers.

“Having worked at Scandinavia’s two largest loan platforms, I was surprised by the lack of any borrower-friendly platform in Singapore and Hong Kong. The high interest rates, a tedious process of applying for a loan and an overall lack of transparency made many borrowers turn to unlicensed money lenders or ‘loan sharks’,” he told Asian Banking & Finance in an interview.

Using his experience from working at two of Scandinavia’s largest loan platforms, Karimi moved full-time to Singapore in 2018 and founded

Customers need only fill out one online application form, which is then made available to Lendela’s partner banks and lenders.

Lendela. The online platform matches up the customer to various lending offers of banks and other licensed lenders in just a few clicks. Customers need only to fill out one online application form, which was then made available to Lendela’s partner banks and lenders where the applicant fulfils all of the required qualifications.

“Within 24 hours, the applicant will be presented with multiple offers and can immediately make a choice and proceed to sign the final loan documents,” added Karimi.

Their partners include leading banks such as Standard Chartered and HSBC, as well as well-established licensed

Match-up challenges That is not to say, however, that everything goes smooth-sailing when matching up customers and lenders.

Karimi shared that lenders’ lack of transparency and simplicity in their loan process, as well as their slow adoption of a 100% digital application procedure, remains a significant challenge for the process.

For example, there is still a lack of acceptance of digital signatures, which inhibits a 100% digital application for platforms by Lendela—the final signing still needs to be done offline.

Karimi added that fintech companies should have access to credit reports, which in turn will help them explain to their customers what their credit situation is.

“Also, a lack of effective ways to stop unsolicited marketing by lenders seems to foster illegal advertising and lending which in the end hurts the consumer,” he concluded.

By Frances Gagua.

ASIAN BANKING AND FINANCE | DECEMBER 2020 33

FINANCIAL TECHNOLOGY: SPENMO

Mohandass Kalaichelvan, co-founder, Spenmo

How Spenmo helps businesses secure direct loans The platform also allows merchants to effectively manage expenses.

T

racking operational expenses such as invoices, receipts, and employee salaries can already be a daunting task for micro, small and medium enterprises (MSMEs).

What’s more, they also have to secure loans from banks and alternative lending platforms, something that is already a chore in itself especially for those just starting out and looking to increase their credit score.

What started as a way to help small businesses with their cash flow landed them in a position to assist them with their financing needs as well, Spenmo co-founder Mohandass Kalaichelvan said. Launched in 2019, the Singaporebased startup provides MSMEs with corporate cards to easily track expenses, obtain financial reports and digitise spending, in addition to granting them direct connections to lenders in Southeast Asia.

Spenmo has previously received seven-figure funding from Rocket Internet. In 2020, the company was chosen by American seed money startup accelerator Y Combinator for its Summer 2020 Batch, securing $150,000 in funding. It has also been backed by angel investors from 34 ASIAN BANKING AND FINANCE | DECEMBER 2020

Without the right tools and education, many business owners are utilizing their personal accounts to conduct business transactions, and vice versa.

Google, Netflix, Go-Jek, StashAway, and Alibaba.

“Being able to centralise the spending data of small businesses meant that we were able to provide lenders with in-depth information on how businesses were spending their money, and act as an additional metric for credit assessment, therefore greatly improving businesses’ chances of getting a loan,” he explained.

In an exclusive interview with Asian Banking & Finance, Kalaichelvan discusses the pain points of the lending sector, the signs that should tell businesses to seek alternative lending platforms, how businesses can make themselves attractive to lenders, and how traditional and alternative lenders can partner to ensure that they uphold the best interest of clients.

What pitfalls in the lending sector did the pandemic-caused economic fallout expose? How do you plan on solving, or at least mitigating, those?

Many MSMEs have continued to blur the lines between company and personal spending. Without the right tools and education, many business owners are utilizing their

personal accounts to conduct business transactions, and vice versa. What this pandemic has done is exposed the flaws involved in this method of cash flow management. With cash flow streams fragmented and muddled up, banks and lenders have a hard time determining the creditworthiness of clients. Not to mention that such practices often do not leave a positive impression of the business professionalism in the first place.

As a result, otherwise credit-worthy customers may end up being turned away from receiving loans.

With Spenmo, micro, small and medium-sized businesses are provided with an ever-growing suite of services that allow them to centralise the company’s spending, while saving costs for MSMBs as well. This allows for a clearer, more in-depth assessment of the company’s creditworthiness. The bigger vision for Spenmo is to use the data from companies’ spending to inform creditworthiness and connect them to the best lenders in the region.

Despite increased innovation and technological adaptation within the banking sector, banks still take a number of weeks to revert back on applications. This has been further exposed by the pandemic, with the sudden influx of applications doubling or even tripling the wait-time involved in the application process.

Spenmo is trying to increase this by increasing business’ awareness of alternative financing options which have much quicker turnaround times than banks. Additionally, with our centralized spending platform, companies are able to easily reflect their spending habits, which in turn allows financial institutions to expedite the credit appraisal process without having to follow a papertrail which can be extremely time-consuming.

When are bank loans non-beneficial for businesses? Are there any specific red flags that should let them know that they have to seek elsewhere?

What some companies don’t know is that each application for any sort of credit bank or financial institute (CC, personal bank loan, corporate bank loan) results in a hard pull of the applicant’s personal CBS report from

FINANCIAL TECHNOLOGY: SPENMO SME loans form an integral part of the economy

Source: CGAP

the banks. These pulls show up on the individual’s CBS report subsequently as an “enquiry”. Although having made a few enquiries will not affect your credit, multiple pulls from several institutions may start to negatively affect the Individual’s credit rating.

As such, if the company has made a number of applications to banks for loans to no avail, it may be in their best interest to hold off on making more applications to banks and reassess their options. This is when an alternative lender may come into play wherein applications do not actually show up on their CBS reports due to the nature of these lenders.

Each bank has their own minimum requirement for a loan application.

Although similar, there are some that have a lower or higher threshold for certain requirements like annual turnover. As such, these should be considered prior to any applications made to decide if the company’s viable for a bank loan in the first place.

How can businesses make themselves attractive to lenders, especially those who are just starting out and looking to increase their credit score?

The first and most controllable way to improve your business’s credit-worthiness is to ensure that shareholders themselves have a strong credit standing. For shareholders, the rationale behind this is that it would be hard for them to trust a business to make repayments if the owners themselves are not able to make commitments in ensuring that their finances are in order. Having no credit

history itself is also not a positive sign.

As such, a simple thing that business owners with no prior debt can do is to get a credit card and load some of their existing monthly expenses onto it, and obviously make payments on-time.

Firstly, ensure that all company expenses are well accounted for.

The easy way to do this is with an expense policy. Companies will be able to pre-allocate funds by making accurate projections. Additionally, businesses owners should ensure that the company is able to make monthly expense payments. Spenmo can help solve these issues by providing full accountability and visibility. This will help avoid bank overdrafts due to unaccounted expenses as much as possible, which can hurt your company’s credit-worthiness.

On that note, there are two things a company should always consider when getting a loan: ability and willingness to pay back. A company’s ability to pay is equivalent to how much money is in its bank account and the future projections of the business. Its willingness to pay is

The first way to improve a business’s creditworthiness is to ensure that shareholders themselves have a strong credit standing.

defined by whether they will be able to pay back the loan on time. These are huge indicators to a lender if a business is a credit-worthy customer.

It was mentioned that traditional and alternative financing options are not necessarily working against each other. In that case, how can the two work together to ensure that clients’ interests are protected?

Currently, there is still a disconnect between the alternative lenders and banks. Clients who are rejected by banks are not made aware of the other options available to them, and sometimes drop off, having to either close down completely or turn to less viable alternatives.

One way to close this gap would be an aggregating platform which puts power into the hands of business owners by showing them where their business stands and precisely what their options are.

What improvements have you been rolling out in response to the growing need for remote work?

Teaming is a feature that we recently rolled out. It involves multi-layered management of the company’s funds therefore providing more autonomy to employees on their funds allocated, while still maintaining that same level of visibility on company spending to higher management.

As such, employees no longer have to request approval or seek funds directly from the company’s administrative team but are able to work within their teams to decide how best to allocate and utilize funds. This works well within the current social framework where companies are physically fragmented and more silo-ed. By Alyssa Divina

Spenmo interface

ASIAN BANKING AND FINANCE | DECEMBER 2020 35

SEGMENT REPORT: CONTACTLESS PAYMENTS

Contactless payment methods are rising in popularity amidst health and safety concerns. (Photo by Richard Tanzer Fotografie, Wikimedia Commons)

Contactless payments ramp up amidst virus concerns More than half of card users globally now wipe their hardware clean after use.

O

ne positive spin that can be taken from the ongoing coronavirus pandemic is that it accelerated the rise of the digital economy, particularly contactless payments. In Q1 2020, there was a 40% jump in contactless payments globally as customers looked for the fastest way to pay without touching cash or point-of-sale terminals, Mastercard CEO Ajay Banga said during the firm’s earnings conference call for that quarter.

As consumers grew more conscious about virus transmission through physical contact, it should no longer be a surprise that hygiene was the primary driver of the shift. A separate Mastercard study revealed that 70% of respondents globally believe that contactless is the safer way to pay, with 80% in Asia Pacific believing that it is a cleaner payment method than cash. More than half (51%) even wipe their payment cards clean after every use.

Conversely, it’s important to note that digital payment methods were already widespread in the region even before the pandemic hit, with 36 ASIAN BANKING AND FINANCE | DECEMBER 2020

The incorrect assumption that cash is free shows a lack of understanding of how digital payments work.

digital payment transactions on track to exceed US$1t by 2025, according to a 2019 study by Google, Temasek, and Bain & Company. Specifically, Singapore and Australia are proving to be digitally mature markets where cashless adoption has already been on the rise, said Safdar Khan, Mastercard executive vice president & division president for Southeast Asia Emerging Markets.

Accordingly, an overwhelming 76% of Singaporeans and 67% of Australians say that cashless is now their preferred way to pay, compared to 72% in the whole APAC region. Malaysia is also making huge strides towards going cashless with almost half (48%) making more contactless payments, Khan said, citing Mastercard’s own IMPACT Studies 2020.

Meanwhile, Chavi Jafa, Visa Asia Pacific head of business solutions, expects a 42% penetration rate for contactless payments in Vietnam and 39% in Indonesia.

Crossing barriers However, some sectors may still be slow in letting go of their bills and

coins. For example, older clients may show hesitation in adapting cashless transactions, said Standard Chartered Singapore head of retail banking Dwaipayan Sadhu. Traditions can also hinder people from going fully cashless, specifically in Singapore as a large group of clients still prefer to go to physical branches to exchange for new physical notes during Chinese New Year and Hari Raya festivities.

For Khan the misperception that cash is free shows a lack of understanding of how digital payments work, and concerns about privacy and financial information security may be turning off people from going digital. And as with any new product or service, it will always be the upper 10% who will get to try it for themselves first and afterwards growth turns speedy, noted Jafa.

On the upside, the cashless trend is inevitable and is here to stay. Standard Chartered noted a 30% jump YoY in volume of digital transactions made in the Lion City in March. Even their older clients are gradually hopping in on the trend; their “silver” customers aged 55 and above have been ramping up their FAST transfers by 45% YoY in Q1, and online credit card bill payments skyrocketed by over 20% YoY in the same period.

Another positive effect of the pandemic is that it pushed small and medium-sized enterprises (SMEs) to adopt digital payments almost immediately, according to Sadhu.

“SMEs have been the hardest hit in this pandemic, having been initially caught off-guard and lacking the skills, knowledge, and access they needed to take their business online at rapid pace,” Khan said.

For small businesses, being able to receive digital payments is just as essential as making them, Jafa said, due to customers getting more and more acclimated to e-commerce.

Cash management should also be considered as businesses still have to adequately manage their working capital amidst the pandemic.

On top of that, small business owners usually have limited time or resources to accumulate digital tools as most of it is spent on running their businesses and accounting for sales numbers, she noted.

SEGMENT REPORT: CONTACTLESS PAYMENTS and at the same time use it as a credit Having access strengthen their online resilience, Khan line to pay suppliers and benefit from to the digital believes that countries must apply a an interest-free credit needed for a three-pronged approach that is approeconomy certain period of time, Jafa explained. enables priate for consumers, businesses and “The Business Card comes with organisations: protect personal inforbusinesses data that can then be used by busimation, secure all digital transactions, to automate nesses effectively to gain further and help entities defend themselves processes insights into their spending. It can against attackers. and free up further help reduce some of the rec“We have long been committed to resources. onciliation that may be required for protecting people at every point in a them just from a business managetransaction journey. This has been at ment perspective,” she added. the core of what we do and has enabled The firm has also collaborated with us to successfully create and implement mobile shopping platforms Shopify innovative technologies, solutions, and and Boutir to help businesses estabmeasures, including leading EMVCo lish online presence and grant them standards such as tokenization and corporate and business cards with a authentication,” he explained. subscription, on top of its partnership Businesses also have to be open with IFundWomen to train Indian and communicative to their customwomen-owned SMEs. Moreover, ers. Enterprises should put customers’ Visa and its partners have piloted interests first and exemplify in their More than half of Asians now wipe their tap-to-phone solutions in Malaysia recovery processes how issues are cards after every use. (Source: Mastercard) with other APAC markets such as resolved, Sadhu stated.

Australia, Hong Kong, India, Taiwan For instance, Standard Chartered Khan agrees that having access to and Vietnam to follow.

Singapore, sends regular updates to the digital economy enables businessFor their part, Standard Chartered clients on what the bank is doing to es to automate processes and free up protect their finances and gives tips on resources that can be allotted to other has rolled out CardsPal, its credit card platform venture with Mastercard, how clients can better protect themoperational aspects. which collates all deals offered by selves from financial crimes.

To address issues regarding trust banks and issuers in Singapore and Another key to maintaining trust is and security, businesses of all sizes allows a user to optimise their card for a business to provide a convenient should guarantee that secure digital spending. Whilst enabling contactless adoption to its customers, with the payments will be the core focus of payments is not currently its focus, confidence that it’s going to be endtheir operations, he said.“By digitizing the bank is steadily enhancing the app to-end secure for them, Jafa said. Visa and implementing secure payments, to cater to customer needs, a spokescontinues to hold talks with its banking businesses will be able to continue person said. partners as a way of sharing business building trust with their consumpractices on how to improve cyberers while driving revenues and new Keeping transactions secure security, and have been increasingly customer acquisitions.”

With digital transformation posits a working on their tokenisation capabiliConsidering these pain points, sinister underbelly: cyberattacks. ties as a response to rising e-commerce Mastercard, Visa, and Standard CharTo combat cyber pain points and transactions. By Alyssa Divina tered have all devised programmes and partnerships in order to help individuals and enterprises cope with Majority of Singaporeans have switched to contactless card providers the changing times. For instance, Mastercard have partnered with DBS in Singapore for the DBS Logistics P-Card to provide SMEs in the Lion City with a near contact-free solution for payments and collections at container depots.

Back in 2018, its global trade platform Mastercard Track was integrated into the country’s National Trade Platform which would expedite epayments between buyers and sellers.

Visa has rolled out numerous initiatives that would assist SMEs across the region throughout the pandemic.

Using the Visa Business Card, merSource: Mastercard chants can manage working capital ASIAN BANKING AND FINANCE | DECEMBER 2020 37

COUNTRY REPORT: JAPAN

Regional banks can now own 100% stock from trading companies (Photo source: Wikimedia Commons)

Japan’s regional banks gain lifeline with regulator’s strategy switch FSA’s revised guidelines allow regional lenders to own up to 100% stock in trading companies

J

apan’s financial industry faces its biggest overhaul in decades as its regulator looks to ease its infamously stringent regulations to aid its struggling regional banks—as well as solve the crisis of low profits and negative interest rates that has plagued the country for years.

The deregulation includes the abolishment of the inspection manual and the relaxation of banks’ business scope regulations. The latter allows banks to own more than 5% of the voting stock of operating companies, according to a set of new policies outlined by the Financial Services Agency (FSA).

“The operating environment surrounding regional banks remains harsh due to structural issues such as reduced lending margins and declining populations, as well as intensifying competition in the days of digitalization,” Japan’s FSA told Asian Banking & Finance in an exclusive 38 ASIAN BANKING AND FINANCE | DECEMBER 2020

Regional banks will be exposed to the risk of impairment of their investments, which in turn could weaken group capital ratios.

correspondence in August.

“Amidst these circumstances, the conventional banking business model of competing simply through higher volume is approaching its limits, and we believe that regional banks need to build sustainable business models that would ensure their soundness into the future and enable them to perform financial intermediation on an ongoing basis,” the regulator added.

Under the policy package published

by FSA in October 2019, banks may now take larger capital stakes in companies carrying out regional revitalisation projects. Similarly, holding more than 5% up to 100% of voting stock of regional trading companies can also be approved from the same month. Some banks have already gotten approval, according to the FSA. But Moody’s Investors Service analyst Tomoya Suzuki cautioned against this move, saying that it may only serve to expose regional lenders to more risk.

“Regional banks will be exposed to the risk of impairment of their investments, which in turn could weaken group capital ratios,” Moody’s Suzuki has warned.

On the other hand, Natixis chief economist for APAC Alicia GarciaHerrero echoed a more optimistic sentiment, saying that the FSA is regulating the business activities that the banks and trading companies will engage in.

“Because the regulator will pay close attention to potential conflict of interests with the banking business. the impact on the health of the financial sector is likely to be small,” GarciaHerrero said.

She added that FSA likely foresees that trading companies will be permitted to promote and distribute local specialties at a national level. This change is unlikely to increase overall risk to the banking business, according to Garcia-Herrero.

COUNTRY REPORT: JAPAN One of the aims of the programme is to promote local SME business, which could in turn increase sales and demand for loans.

Bank of Japan (Photo source: Wikimedia Commons)

However, the move could also delay applying more serious reforms in the local banking industry.

“Regional banks are in secular decline with stagnating regional economy and low interest rates.

Therefore, this development could end up delaying serious reforms by applying, for example, corrective actions, and exacerbate the current problems,” she explained.

Similar to Moody’s Suzuki, GarciaHerrero warned of the possibility of regional banks could end up taking

more credit risks than they should.

“One of the goals is to successfully promote local SME business, which could in turn increase their sales and hence demand for loans to finance the rising demand,” she noted.

Breaking free Perhaps most important of the changes is the abolition of the bank inspection manual, which had long been criticised for limiting banks’ operations. The inspection manual required local lenders to provide for bad loans based

on a lender’s past performance.

The manual was first launched in 1999, when Japan was in the brink of a financial crisis due to the high number of bad loans, a result of companies defaulting as land prices abruptly fell.

Whilst the inspections and supervision based on the inspection manual made a huge contribution to resolving the non-performing loan problem at the time, it has since then been criticized for being past-oriented and for possibly impeding accurate estimations of future losses.

Instead, the FSA announced a set of new approaches and methodologies for lending practices.

“Amongst them, we provided financial institutions with viewpoints for more accurately estimating provisions based on their lending policies and risk profiles of loan portfolios. In particular, regarding non-impaired loans, we have set out a roadmap for relying not only on past performance, but also for accurately reflecting recognized credit risks, including current and future information, in provisions.”

The CIMB COVID-19 financial business scheme has won the

Singapore International Initiative of the Year for Supply Chain Financing We are proud to support our clients and grow their business to greater heights.

FORWARD

Your Business ASIAN BANKING AND FINANCE | DECEMBER 2020 39

COVER STORY

Asian Banking & Finance Awards holds first ever digital awards presentation

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ver 100 exceptional banks from 30 countries were recognised at the 2020 Wholesale Banking Awards, Retail Banking Awards, and Corporate & Investment Banking Awards held digitally from 3 August to 21 August.

For the first time, the awards were handed via visual presentation to the winners due to the pandemic. Winning companies were also interviewed throughout the whole month of August to share their thoughts on winning in the most prestigious banking awards in Asia.

This year’s nominations were judged by a panel consisting of Liew Nam Soon, ASEAN Managing Partner, Markets at Ernst and Young; Ho Kok-Yong, Partner, Leader, Financial Services SEA & Singapore at Deloitte & Touche LLP; John Dovaston, APAC Financial Services Leader at PwC; Chia Tek Yew, Head of Financial Services Advisory at KPMG, Gabriel Seow, Partner – Financial Services Group, Singapore; Justin Tan, APAC Financial Services Partner at Mazars; and Sean Choo, APAC Financial Services Partner at Mazars.

“As we have seen in this year’s winners, banks were still able to navigate and up their game even during the pandemic. We are looking forward to seeing how they will continue to provide the best service to clients in spite of these very difficult times” said Tim Charlton, publisher of Asian Banking & Finance magazine.

Below is a list of all the winning companies. Congratulations!

RETAIL BANKING AWARDS 2020 WINNERS ABA Bank Mobile Banking & Payment Initiative of the Year - Cambodia Affin Bank Berhad Insurance Product Innovation of the Year - Malaysia Start-up Banking Initiative of the Year - Malaysia Agribank Domestic Retail Bank of the Year - Vietnam Corporate Social Responsibility & Green Program of the Year - Silver Mobile Banking & Payment Initiative of the Year - Vietnam Al Amal Microfinance Bank Microfinance Product of the Year - Yemen Alliance Bank Malaysia Berhad Branch Innovation of the Year - Silver AmBank Group SME Bank of the Year - Malaysia Ardshinbank CJSC Domestic Retail Bank of the Year - Armenia Digital Banking Initiative of the Year - Armenia Online Banking Initiative of the Year - Armenia ATFBank JSC Domestic Retail Bank of the Year - Kazahkstan 40 ASIAN BANKING AND FINANCE | DECEMBER 2020

au Jibun Bank Mobile Banking & Payment Initiative of the Year - Japan Axis Bank Domestic Retail Bank of the Year - India Baiduri Bank Domestic Retail Bank of the Year - Brunei Bank for Investment and Development of Vietnam JSC. (BIDV) SME Bank of the Year - Vietnam Bank Islam Malaysia Berhad Digital Wallet Initiative of the Year - Malaysia Strategic Partnership of the Year - Malaysia Bank of Ayudhya PCL. Mortgage and Home Loan Product of the Year - Thailand Bank of China (Hong Kong) Limited Mobile Banking & Payment Initiative of the Year - Hong Kong The Bank of East Asia, Ltd. Domestic Retail Bank of the Year - Hong Kong Strategic Partnership of the Year - Hong Kong Bank SinoPac Marketing & Brand Initiative of the Year - Taiwan Service Innovation of the Year - Taiwan BANQUE POUR LE COMMERCE EXTERIEUR LAO PUBLIC (BCEL) Mobile Banking & Payment Initiative of the Year - Laos BDO Private Bank Wealth Management Platform of the Year - Philippines BDO Unibank (Foundation) Financial Inclusion Initiative of the Year - Philippines Blom Bank Domestic Retail Bank of the Year - Lebanon Corporate Social Responsibility & Green Program of the Year - Bronze Financial Inclusion Initiative of the Year - Lebanon Cambodian Public Bank Domestic Retail Bank of The Year - Cambodia CB Bank SME Bank of the Year - Myanmar China Banking Corporation Mobile Banking & Payment Initiative of the Year - Philippines CIMB Bank Philippines Marketing & Brand Initiative of the Year - Philippines Digital Banking Initiative of the Year - Philippines CIMB Thai Bank Public Company Limited Consumer Finance Product of the Year - Thailand Wealth Management Platform of the Year - Thailand Citibank Singapore Limited International Retail Bank of the Year - Asia Pacific Credit Card Initiative of the Year - Singapore Commercial Bank of Ceylon PLC SME Bank of the Year - Sri Lanka PT. Bank Commonwealth Wealth Management Platform of the Year - Indonesia DBS Bank Ltd Digital Banking Initiative of the Year - Singapore Digital Wallet Initiative of the Year - Singapore Mobile Banking & Payment Initiative of the Year - Singapore Open Banking Initiative of the Year - Singapore Wealth Management Platform of the Year - Singapore DBS Bank (Taiwan) Credit Card Initiative of the Year - Taiwan Dutch-Bangla Bank Limited Domestic Retail Bank of the Year - Bangladesh

East West Banking Corporation Consumer Finance Product of the Year - Philippines New Consumer Lending Product of the Year - Philippines Ho Chi Minh City Development Joint Stock Commercial Bank Mid-sized Domestic Retail Bank of the Year - Vietnam HNB FINANCE Ltd Marketing & Brand Initiative of the Year - Sri Lanka Website of the Year - Sri Lanka Hong Leong Finance ASEAN Finance Company of the Year HSBC Asia Pacific Credit Card Initiative of the Year - Hong Kong HSBC Wealth Management Platform of the Year - Hong Kong HSBC Bank (China) Company Limited International Retail Bank of the Year - China HSBC India Service Innovation of the Year - India HSBC Philippines Credit Card Initiative of the Year - Philippines HSBC Sri Lanka International Retail Bank of the Year - Sri Lanka HSBC Bank Vietnam Ltd Digital Banking Initiative of the Year - Vietnam ICICI Bank Rural/ Cooperative Bank of the Year - India Mobile Banking & Payment Initiative of the Year - India JS Bank SME Bank of the Year - Pakistan KBZ Bank Domestic Retail Bank of the Year - Myanmar Digital Wallet Initiative of the Year - Myanmar Mobile Banking & Payment Initiative of the Year - Myanmar Maybank Investment Bank Berhad Online Securities Platform of the Year - Malaysia Maybank Kim Eng Securities Pte Ltd Online Securities Platform of the Year - Singapore Maybank Domestic Retail Bank of the Year - Malaysia Digital Banking Initiative of the Year - Malaysia Mobile Banking & Payment Initiative of the Year - Malaysia Online Banking Initiative of the Year - Malaysia Maybank Singapore Limited Automobile Lending Initiative of the Year - Singapore Marketing & Brand Initiative of the Year - Singapore National Development Bank PLC Banking for Women Initiative of the Year - Sri Lanka Branch Innovation of the Year - Bronze Domestic Retail Bank of the Year - Sri Lanka OCBC Bank ASEAN SME Bank of the Year OCBC NISP SME Bank of the Year - Indonesia OJSC Optima Bank Domestic Retail Bank of the Year - Kyrgyzstan Ping An Bank Domestic Retail Bank of the Year - China Gold and Precious Metals Bank of the Year - China

PrimeCredit Limited Finance Company of the Year - Hong Kong RHB Bank Berhad Credit Card Initiative of the Year - Malaysia Mortgage and Home Loan Product of the Year - Malaysia Saigon-Hanoi Commercial Joint Stock Bank Insurance Product Innovation of the Year - Vietnam Strategic Partnership of the Year - Vietnam SANASA Development Bank PLC Rural/ Cooperative Bank of the Year - Sri Lanka Digital Wallet Initiative of the Year - Sri Lanka Financial Inclusion Initiative of the Year - Sri Lanka Security Bank Corporation Investment Product Innovation of the Year - Philippines Standard Chartered Bank (Hong Kong) Limited International Retail Bank of the Year - Hong Kong Digital Banking Initiative of the Year - Hong Kong Standard Chartered Bank (Taiwan) Limited Digital Banking Initiative of the Year - Taiwan International Retail Bank of the Year - Taiwan State Bank of India Core Banking System Initiative of the Year - India State Bank of India Maldives Employer Award of the Year - Bronze Core Banking System Initiative of the Year - Maldives Service Innovation of the Year - Maldives Taishin Bank Domestic Retail Bank of the Year - Taiwan Mobile Banking & Payment Initiative of the Year - Taiwan New Consumer Lending Product of the Year - Taiwan Strategic Partnership of the Year - Taiwan The Siam Commercial Bank Public Company Limited Domestic Retail Bank of the Year - Thailand Debit Card Initiative of the Year - Thailand Service Innovation of the Year - Thailand uab bank Employer Award of the Year - Silver Financial Inclusion Initiative of the Year - Myanmar Strategic Partnership of the Year - Myanmar Union Bank of the Philippines Domestic Retail Bank of the Year - Philippines Open Banking Initiative of the Year - Philippines Start-up Banking Initiative of the Year - Philippines PT Bank UOB Indonesia Digital Banking Initiative of the Year - Indonesia United Overseas Bank (Thai) Public Company Limited Employer Award of the Year - Gold International Retail Bank of the Year - Thailand United Overseas Bank Ltd Domestic Retail Bank of the Year - Singapore Financial Inclusion Initiative of the Year - Singapore Product Innovation of the Year - Singapore Banking for Women Initiative of the Year - Singapore Branch Innovation of the Year - Gold Viet Capital Bank Marketing & Brand Initiative of the Year - Vietnam Vietcombank Core Banking System Initiative of the Year - Vietnam Vietnam Public Joint Stock Commercial Bank Credit Card Initiative of the Year - Vietnam YES BANK Corporate Social Responsibility & Green Program of the Year - Gold ASIAN BANKING AND FINANCE | DECEMBER 2020 41

COVER STORY CORPORATE & INVESTMENT BANKING AWARDS 2020 WINNERS

National Bank of Pakistan Corporate Client Initiative of the Year - Pakistan Innovative Deal of the Year - Pakistan

Aktif Yatırım Bankası A.S Innovative Deal of the Year - Turkey Allied Bank Limited Green Deal of the Year - Pakistan Syndicated Loan of the Year - Pakistan

NDB Investment Bank Limited Corporate & Investment Bank of the Year - Sri Lanka

ARMECONOMBANK Corporate & Investment Bank of the Year - Armenia

National Development Bank PLC Innovative Deal of the Year - Sri Lanka PNB Capital and Investment Corporation Equity Deal of the Year - Philippines

Bank for Investment and Development of Vietnam JSC. (BIDV) Corporate Client Initiative of the Year - Vietnam

PT. Bank CIMB Niaga, Tbk. Corporate & Investment Bank of the Year - Indonesia Syndicated Loan of the Year - Indonesia Project Infrastructure Finance Deal of the Year - Indonesia

Bank Islam Malaysia Berhad Innovative Deal of the Year - Malaysia Project Infrastructure Finance Deal of the Year - Malaysia

QINVEST LLC Investment Product Initiative of the Year - Qatar Innovative Deal of the Year - Qatar

Bank Muscat Corporate & Investment Bank of the Year - Oman Debt Deal of the Year - Oman Equity Deal of the Year - Oman

RHB Investment Bank Berhad Green Deal of the Year - Malaysia

BDO Capital & Investment Corporate & Investment Bank of the Year - Philippines Green Deal of the Year - Philippines BPI Debt Deal of the Year - Philippines Mergers and Acquisitions Deal of the Year - Philippines Bualuang Securities PCL Corporate & Investment Securities Firm of the Year - Thailand Equity Deal of the Year - Thailand CTBC Bank Mergers and Acquisitions Deal of the Year - Taiwan Project Infrastructure Finance Deal of the Year - Taiwan DBS Bank Ltd Corporate & Investment Bank of the Year - Singapore Corporate Client Initiative of the Year - Singapore Equity Deal of the Year - Singapore Green Deal of the Year - Singapore Far Eastern International Bank Green Deal of the Year - Taiwan GULF INTERNATIONAL BANK Innovative Deal of the Year - Bahrain Habib Bank Limited Corporate & Investment Bank of the Year - Pakistan Debt Deal of the Year - Pakistan ICICI Bank Corporate & Investment Bank of the Year - India Corporate Client Initiative of the Year - India Land Bank of the Philippines Innovative Deal of the Year - Philippines Corporate Client Initiative of the Year - Philippines Maybank Investment Bank Berhad Equity Deal of the Year - Malaysia Debt Deal of the Year - Malaysia Mergers and Acquisitions Deal of the Year - Malaysia MCB Bank Limited Equity Deal of the Year - Pakistan Syndicated Loan of the Year - Pakistan Meezan Bank Limited Project Infrastructure Finance Deal of the Year - Pakistan 42 ASIAN BANKING AND FINANCE | DECEMBER 2020

SB Capital Investment Corporation Project Infrastructure Finance Deal of the Year - Philippines Syndicated Loan of the Year - Philippines Siam Commercial Bank Corporate & Investment Bank of the Year - Thailand Green Deal of the Year - Thailand Taipei Fubon Commercial Bank Co., Ltd. Mergers and Acquisitions Deal of the Year - Taiwan Syndicated Loan of the Year - Taiwan Taishin International Bank Innovative Deal of the Year - Taiwan Taishin Securities Co., Ltd Equity Deal of the Year - Taiwan U Microfinance Bank Limited Microfinance Syndication Deal of the Year - Pakistan UOB Innovative Deal of the Year - Singapore Mergers and Acquisitions Deal of the Year - Singapore Project Infrastructure Finance Deal of the Year - Singapore Syndicated Loan of the Year - Singapore Debt Deal of the Year - Singapore YUANTA Securities Corporate & Investment Securities Firm of the Year - Taiwan

WHOLESALE BANKING AWARDS 2020 WINNERS Abu Dhabi Commercial Bank UAE Domestic Trade Finance Bank of the Year Allied Bank Limited Pakistan Domestic Initiative of the Year for Green Banking Bahrain Islamic Bank Bahrain Domestic Initiative of the Year for Open Banking Bangkok Bank Thailand Domestic Trade Finance Bank of the Year Bank for Investment and Development of Vietnam JSC. (BIDV) Vietnam Domestic Foreign Exchange Bank of the Year Bank of Ayudhya PCL. Thailand Domestic Technology & Operations Bank of the Year Thailand Domestic Initiative of the Year for Supply Chain on Blockchain

ASIAN BANKING AND FINANCE | DECEMBER 2020 43

COVER STORY Bank of China (Hong Kong) Hong Kong Domestic Trade Finance Bank of the Year Hong Kong Domestic Cash Management Bank of the Year Bank of the Philippine Islands Philippines Domestic Foreign Exchange Bank of the Year Bank SinoPac Taiwan Domestic Technology & Operations Bank of the Year BANK UOB INDONESIA Indonesia International Cash Management Bank of the Year Banque Misr Egypt Domestic Cash Management Bank of the Year Egypt Domestic Trade Finance Bank of the Year BDO Unibank Philippines Domestic Cash Management Bank of the Year Cathay United Bank Taiwan Domestic Cash Management Bank of the Year CB Bank Myanmar Domestic Cash Management Bank of the Year Myanmar Domestic Trade Finance Bank of the Year CIMB Bank Berhad, Singapore Branch Singapore International Initiative of the Year for Supply Chain Financing CTBC Bank Taiwan Domestic Trade Finance Bank of the Year DBS Bank (Indonesia) Indonesia International Foreign Exchange Bank of the Year DBS Bank (Taiwan) Taiwan International Cash Management Bank of the Year Taiwan International Technology & Operations Bank of the Year DBS Bank Ltd Singapore Domestic Project Finance Bank of the Year Singapore Domestic Technology & Operations Bank of the Year

OCBC Al-Amin Bank Berhad Malaysia International Initiative of the Year for Green Financing Malaysia International Project Finance Bank of the Year OCBC NISP Indonesia Domestic Cash Management Bank of the Year PT Bank Mandiri (Persero) Tbk. Indonesia Domestic Trade Finance Bank of the Year RHB Banking Group Malaysia Domestic Foreign Exchange Bank of the Year Rizal Commercial Banking Corporation Philippines Domestic Initiative of the Year for Sustainable Financing Saigon-Hanoi Commercial Joint Stock Bank Vietnam Domestic Initiative of the Year for Corporate Credit Support Vietnam Domestic Trade Finance Bank of the Year Taishin Bank Taiwan Domestic Initiative of the Year for M&A Portal Turk Ekonomi Bankasi A.S. Turkey Domestic Cash Management Bank of the Year United Overseas Bank (China) Limited China International Trade Finance Bank of the Year UOB Brunei International Project Finance Bank of the Year UOB (Thai) PCL Thailand International Trade Finance Bank of the Year UOB Malaysia Malaysia International Trade Finance Bank of the Year YES BANK India Domestic Trade Finance Bank of the Year India Domestic Cash Management Bank of the Year India Domestic Technology & Operations Bank of the Year

Habib Bank Limited Pakistan Domestic Project Finance Bank of the Year Pakistan Domestic Trade Finance Bank of the Year Hang Seng Bank Limited API Project of the Year JSC Bank CenterCredit Kazakhstan Domestic Technology & Operations Bank of the Year KASIKORNBANK Thailand Domestic Cash Management Bank of the Year KBZ Bank Myanmar Domestic Initiative of the Year for Mobile Payments

Affin Bank

Lao Viet Joint Venture Bank Laos Domestic Technology & Operations Bank of the Year Maybank Investment Bank Berhad Malaysia Domestic Initiative of the Year for Green Islamic Financing Malaysia Domestic Project Finance Bank of the Year Mutual Trust Bank Ltd Bangladesh Domestic Project Finance Bank of the Year National Development Bank PLC Sri Lanka Domestic Cash Management Bank of the Year Sri Lanka Domestic Initiative of the Year for Mobile Banking Sri Lanka Domestic Project Finance Bank of the Year 44 ASIAN BANKING AND FINANCE | DECEMBER 2020

au Jibun Bank

ASIAN BANKING AND FINANCE | DECEMBER 2020 45

COVER STORY

Baiduri Bank

PT. Bank CIMB Niaga, Tbk.

Bank Sinopac

Bank Sinopac

BANQUE POUR LE COMMERCE EXTERIEUR LAO PUBLIC (BCEL)

Bank CenterCredit JSC

BDO Unibank

Cathay United Bank

PT. Bank CIMB Niaga, Tbk. 46 ASIAN BANKING AND FINANCE | DECEMBER 2020

The Bank of East Asia, Ltd.

CIMB Bank Singapore

CIMB Bank Philippines

HSBC Asia Pacific

CIMB Bank Philippines

1

PA201377

註：1. 只適用於總貸款額（包括現有貸款餘額）HK$50,000或以下並親臨分行提取指定私人貸款之客戶。詳情請向本公司查詢。安信信貸有限公司擁有對貸款審批及任何爭議之最終決定權。

COVER STORY

CIMB Thai Bank

CIMB Thai Bank

China Banking Corporation

Taishin Securities Co., Ltd.

East West Banking Corporation

Far Eastern International Bank

Far Eastern International Bank

Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank)

Far Eastern International Bank

HSBC Asia Pacific

Citibank Singapore Limited

HSBC India

48 ASIAN BANKING AND FINANCE | DECEMBER 2020

HSBC India

The Hongkong and Shanghai Banking Corporation Limited

HSBC Philippines

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ASIAN BANKING AND FINANCE | DECEMBER 2020 49

COVER STORY

HSBC Philippines

HSBC Sri Lanka

PrimeCredit

HSBC

Standard Chartered Bank (Taiwan) Limited

50 ASIAN BANKING AND FINANCE | DECEMBER 2020

RHB Bank

Standard Chartered Bank (Hong Kong) Limited

Siam Commercial Bank

Union Bank of the Philippines

HSBC Vietnam

Standard Chartered Bank (Hong Kong) Limited

U Microfinance Bank Limited

UOB

UOB

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EQUITY DEAL OF THE YEAR - TAIWAN

Taishin Securities continues to be one of the top underwriters in Taiwan

T

he IPO of HOTAI FINANCE CO.was the largest deal since the implementation of a competitive auction system in Taiwan. This deal also set remarkable milestones in Taiwan’s capital market, including “The largest number of quantity submitted in bids in Taiwan’s IPO history” and “The largest number of institutional investors’ participation in Taiwan’s bidding history”. HFC literally became a sensation in Taiwan’s capital market and went viral on stock market news in 2019. The success of this deal lies not only in steady profit of HFC, but also in capability of the lead underwriters: Taishin Securities.

With abundant advisory and capitalraising experiences, Taishin Securities continues serving different types of listed firms and corporate clients by offering various services including IPO, SPO, financial advisory, mergers and acquisitions, etc. As a subsidiary of Taishin Financial Holding Co., Ltd., Taishin Securities makes good use of group synergy by providing clients with direct and indirect finance between banks and securities. This strategy supports clients’ financing needs with comprehensive investment banking services.

For the past few years, Taishin Securities has always been the top three underwriters in Taiwan. In 2019, Taishin Securities was rewarded by the Taiwan Stock Exchange for raising the largest amount of capital and handling most numbers of IPO cases in the capital market. With a prestigious reputation, Taishin Securities served 54 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

as lead underwriter for the IPO of many subsidiaries of domestic holding firms such as Hotai Motor CO., LTD., Acer Inc., China Airlines, Ltd., TECO Electric & Machinery Co., Ltd..

“Taishin Securities not only pushes its underwriting service forward, but also proactively develops its other services.”

Speaking of underwriting business, it needs long-term preparation and assessment before a successful IPO. Taishin Securities never restricts itself by choosing specific industries to be its target. On the contrary, Taishin Securities conducts professional industry analysis and

investigates companies to understand their strengths and prospects. In this way, Taishin Securities discovers potential clients and guides them to establish an internal control system to meet the criteria of securities listings. Taishin Securities would also introduce suitable financial and strategic investors for clients in advance of the IPO. With a compelling equity story and multichannel marketing, Taishin Securities attracts the right investors in main pools of capital with the right market timing, promoting the value of the company to be recognized by the majority. Through the guidance process, Taishin Securities maintains close partnerships with clients and extends service to other business units. Therefore, for many listed companies that are underwritten by Taishin Securities, they will prioritize Taishin Securities whenever they need fund raising or other financial needs.

“Diligence” is one of the essential reasons that makes Taishin Securities successful. Devoting time and effort to the underwriting market, Taishin Securities not only pushes its underwriting service forward to a diversified and international investment banking level, but also proactively develops venture capital, mergers and acquisitions, private equity, and other services. By providing complete investment banking services, Taishin Securities looks forward to enhancing its service and quality and becoming the superior investment bank in Asia Pacific.

COVER STORY

56 ASIAN BANKING AND FINANCE | DECEMBER 2020

INTERNATIONAL RETAIL BANK OF THE YEAR - CHINA

HSBC fulfills customers’ ambitions as a bank in the pocket and more in grasp

M

ainland China’s HSBC has been helping retail customers fulfil their ambitions and build a sustainable future, by putting borderless banking and world class wealth management in customers’ pockets, combined with exceptional people who bring it to life.

As the leading international bank in mainland China, HSBC supports customers with their banking and wealth needs across about 50 cities. Its Wealth and Personal Banking aims to provide greater access to a broader range of wealth management capabilities for mainland China’s personal customers, as well as a seamless journey as they grow their wealth and advance in life stages.

HSBC targets to further enhance its financial service solutions in five focused areas, namely family protection, investment, education, retirement, and legacy, in order to cater to the growing needs of the mass affluent and high-net-worth (HNW) segments, particularly clients with international needs.

“HSBC is committed to bring forward looking digital capabilities and competence to present an integrated ‘Human + Digital’ wealth journey for our customers” Human + Digital Despite the impact of COVID-19, HSBC has made solid progress with mainland China wealth and personal banking business in the past months. HSBC has strengthened its international propositions and opened the first sub-branch focusing on serving customers’ international needs in Shanghai.

With increasing post-pandemic demands amongst the mass Chinese affluent, HSBC upgraded its premier propositions with more comprehensive and innovative family offerings. Jade Legacy total solution was also launched to serve HNW clients with “digital tools + professional services” to tap postpandemic legacy planning needs.

HSBC China’s distribution of Qualified Domestic Limited Partnership (QDLP) scheme was also the first amongst foreign banks to facilitate qualified HNW investors’ 58 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

Richard Li, Executive Vice President and Head of Wealth and Personal Banking, HSBC China

investments in offshore traditional and alternative investments for portfolio diversification.

“More customers around the world are getting switched on to digital amidst the COVID-19 pandemic. Our technology is meeting a demand for ‘contactless wealth management’, and HSBC is committed to bring forward looking digital capabilities and competence to present an integrated ‘Human + Digital’ wealth journey for our customers,” said Richard Li, Executive Vice President and Head of Wealth and Personal Banking, HSBC China This March, HSBC took the lead amongst foreign banks in rolling out the Smart Mobile Onboarding journey for main accounts across the country. The new process significantly

enhanced account opening efficiency, under the premise that tightened risks control measures are in place, and helps minimise face-to-face account handling time at the branches.

In June, HSBC was the first foreign bank in mainland China to introduce a “wealth bot” called Wealth Assistant, a virtual relationship manager available around the clock to support customers in making investment decisions. The bot uses natural language processing, a form of artificial intelligence, to interpret customers’ questions, and provide an appropriate response. Together with Wealth Assistant, HSBC launched a number of user-friendly digital tools on mobile banking, collectively offering a fully digitalised and immersed, one-stop wealth experience.

GBA opportunities As the largest international bank in the Greater Bay Area (GBA), HSBC is wellpositioned to capture opportunities in the developing international first-class bay area.

Wealth Management Connect has strategic importance for retail investors in the GBA to expand their investment opportunities and diversify their portfolio.

Moreover, the bank aims to further enhance its capabilities to assist and provide personalised solutions for its clients.

“We will be a stronger, more digital, and more customer-focused bank in mainland China because of our strong sense of purpose, our strategy and our brilliant people,” added Richard.

ASIAN BANKING AND FINANCE | DECEMBER 2020 59

INTERNATIONAL RETAIL BANK OF THE YEAR - SRI LANKA

HSBC Sri Lanka continues to be the bank of choice for global minded customers

HSBC Sri Lanka Nadeesha Senaratne talks about how the bank adapts to the needs of customers by easing international connectivity.

I

n the ever changing world of banking, the need for more personalised solutions is increasing more now than ever. HSBC Sri Lanka continues to evolve to curate products to meet the changing financial needs of customers, enabling them to thrive.

Drawing on a 128-year legacy in Sri Lanka, HSBC holds a strong track record in modernising conventional banking and innovating throughout its history, as the leading foreign bank in the country.

HSBC has been a catalyst for setting digital trends in the banking industry in Sri Lanka, having introduced the very first Automated Teller Machine (ATM) in Sri Lanka in 1986, electronic online banking through its Hexagon system in 1991, and commercialized credit cards making it accessible and safe. It has also introduced new features added to the consumer centric promotions—Cardholder Dines Free, Cardholder Stays Free, and Cardholder Flies Free—that is extremely popular amongst cardholders to date.

Since then, HSBC has further consolidated its position and continued to develop and revolutionise the market with many more firsts.

HSBC, as the dominant player in the affluent customer segment in Sri Lanka, launched the flagship HSBC Premier proposition in 2001, which opened up a world of international banking services for customers.

Since then, the world has changed significantly. The ‘new normal’ shows how Sri 60 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

Lankans are looking for added security of their investments and securing a better future for their children. They also expressed a need to be better connected via borderless global banking services and the flexibility to move money across geographies and access banking from anywhere, in a convenient way.

This led HSBC to reposition its flagship Premier proposition this year, to meet the evolving financial needs of customers and offer an array of benefits and services through a bank in your pocket, borderless banking and HSBC Premier Rewards. Further, HSBC Premier has a dedicated team of premier relationship managers and specialists who are vastly experienced in financial planning and retail banking products, as well as can provide suitable solutions and advice for customers’ day-to-day banking needs.

“We understand that the needs of our customers are ever changing and we need to adapt accordingly. Which is why we have enhanced our Premier proposition to focus on what matters most to our customers – ease of international connectivity and financial support for their families. We will continue to develop products and solutions that will engage Premier customers and their families a lot more and help them meet their financial goals, here and abroad.” said Nadeesha Senaratne, country head of wealth and personal banking, HSBC Sri Lanka.

HSBC has enabled customers to simply walk out of the branch with the ‘bank in their pocket’ by opening an account in less than an hour and begin transacting digitally almost instantaneously. The bank’s ‘borderless

banking’ services also allow customers to transact in real time with access to their overseas premier accounts through Global View/Global Transfer as well as Global Transfer Friends and Family service.

Building on its already popular HSBC Rewards platform, HSBC has consolidated its rewards programme to offer customers curated dining and immersive lifestyle experiences that are extended to their family.

“We will continue to develop products and solutions that will engage customers and their families a lot more and help them meet their financial goals, here and abroad.”

Understanding that families often face tough choices when planning for overseas higher education for their children, leveraging HSBC’s international connectivity in 64 markets, HSBC stands ready to serve customers’ borderless banking needs.

With over 20,000 Sri Lankans studying overseas at any given time, HSBC Premier introduced the country’s first fully-integrated International Student Proposition in 2019 to support the education goals of aspiring students. The new proposition enables pre-departure account opening with a suite of international banking services, to help facilitate the overseas education journey with peace of mind.

KEY MILESTONES 1986

Introduced ATM’s to Sri Lanka

1991

Introduced electronic online banking via HSBC Hexagon system

1994

Commercialised Credit Cards in Sri Lanka

2002

Launched FALCON - first fraud detection system

2002

Launched HSBC Rewards programme for customer loyalty

2004

Launched CHIP card technology for credit cards

2004

Launched 0% interest installment scheme

2004

Introduced Third Party payment points

2007

Introduced Cross border account opening services

2009

Introduced Real Time Cross Border Transfers (Global Transfers)

2012

Launched the first Visa Signature credit card

2017

Launched HSBC Mobile App with Biometric verification

2018

Introduced Visa Platinum Cashback Credit Card

2019

Launched the first ‘Rewards’ Credit Card

INTERNATIONAL RETAIL BANK OF THE YEAR - HONG KONG DIGITAL BANKING INITIATIVE OF THE YEAR - HONG KONG

Standard Chartered Hong Kong further gears up its digital banking services

Ong Lay Choo Managing Director, Head, Retail Banking, Hong Kong

S

tandard Chartered Bank - Hong Kong has received both the International Retail Bank of the Year and Digital Banking Initiative of the Year Awards for Hong Kong in the Retail Banking Awards 2020. This is the third consecutive year that the bank has received the International Retail Bank of the Year - Hong Kong award.

“In Hong Kong, clients have many good choices of who they wish to bank with.

Therefore, it is critical that we deliver an outstanding proposition and service to our clients, combining the best of Human Touch & Digital experiences,” said Ong Lay Choo, Head of Retail Banking of Standard Chartered Bank - Hong Kong.

With ‘focusing on clients’ needs, digitizing with a human touch’ as its core philosophy, the bank integrated human & digital in its process to provide the best customer experience across all channels.

The bank stayed true to their philosophy in their efforts as they saw their mobile banking users doubling in just 2 years’ time.

The bank continued to record a strong growth in H1, with a 38% YoY increase in mobile active customers, as well as a 43% YoY increase in all digital transactions across servicing, payments, and wealth management (WM) transactions.

62 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

Standard Chartered Hong Kong drives up digitally active client numbers through multiple innovations Over the last few years, the bank has prioritised providing customers convenient access to their day-to-day banking, as well as staying in control of their wealth management needs with the right market information at their fingertips.

Customers can now make appointments and interact with RMs within the comfort of their own homes. Standard Chartered Hong Kong rolled this out at the height of the pandemic, called My RM, a digital wealth channel for clients to connect with their designated RMs via online banking or SC Mobile app. The bank has also developed a user-friendly wealth management platform, enabling clients to make investments roundthe-clock.

Online/Mobile FX allows 24/7 foreign exchange with personalized watchlist and price alert functions, as well as a market unique membership rewards program.

Earlier this year, the bank also adopted the use of AI technology in chatbot to help clients with simple enquiries and

“It is critical that we deliver an outstanding proposition and service to our clients, combining the best of Human Touch & Digital experiences.” connect clients to a live agent immediately when needed. Clients can also install a SC Keyboard on their mobile phone to send money to friends or merchants via SC Pay (Faster Payment System) and instantly check balances.

The bank also partnered with JETCO and became the first bank to launch QR Cash cardless cash withdrawal service in March 2019, in which a mobile phone can replace a debit card to withdraw cash from the ATM machines.

“Clients welcome the idea with more protection on security in mobile, setting the instruction in advance and faster experience on ATMs having less steps to input,” said Annie Chen, Managing Director, Head of

Digital Banking & Personal Segment, Retail Banking at Standard Chartered Bank - Hong Kong.

Delivering the best of human touch and digital experiences Standard Chartered Hong Kong recognises that clients’ needs are changing, and it must keep up with it.

“One great example of a change in our customer’s behaviour is that they are using digital a whole lot more,” said Ong. “We will continue to invest in delivering the best of Human Touch and Digital experiences,” said Ong, adding that the bank will leverage on data analytics to deliver even greater personalisation experiences for clients.

Furthermore, the bank aims to strengthen its digital capabilities in wealth management, along with the launch of Wealth Connect within the Greater Bay Area.

Lastly, Chen notes that the bank plans to further expand its ecosystem through partnerships to extend our reach to clients.

“We will bring in new partnerships later this year to help us increase our reach to clients, and multiple projects are already underway as we continue to make banking simpler and better,” added Chen.

Annie Chen Managing Director, Head, Digital Banking & Personal Segment, Hong Kong

ASIAN BANKING AND FINANCE | DECEMBER 2020 63

DOMESTIC RETAIL BANK OF THE YEAR - SINGAPORE FINANCIAL INCLUSION INITIATIVE OF THE YEAR - SINGAPORE PRODUCT INNOVATION OF THE YEAR - SINGAPORE BANKING FOR WOMEN INITIATIVE OF THE YEAR - SINGAPORE BRANCH INNOVATION OF THE YEAR - GOLD

Hangout@UOB with Singapore Polytechnic students

L

ocated within Singapore Polytechnic, Hangout@UOB is the first banking space for the youth, designed, managed, and operated by the youth. UOB’s approach to Hangout@UOB was to collaborate with the different members of SP’s ecosystem to create a space that serves the needs of the polytechnic’s community.

UOB gave the students free reign to decide on the aesthetic and functional design elements of the branch such as the layout, colours, furniture styles and the use of gamification for engagement. The first step in the collaboration involved 40 lecturers and students from different schools such as Business and Media, Arts and Design coming together to create a space to call their own. They participated in Design Thinking workshops alongside teams from the bank to identify the features within the space that would suit the needs and interests of the polytechnic community.

The 4-week design process enabled the students to put into practice the skills they have learnt in school. The bank then built the space based on the final concept presented by the students.

Learning on the job Hangout@UOB is the result of an ongoing collaboration between UOB and SP to provide students with the opportunity to gain vital work experience and to build a 64 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

mentor students and to promote learning at the workplace.

“At UOB, we have a strong emphasis on training and developing our people and are delighted to be able to extend this to the students at Singapore Polytechnic.

Through their internship at the new Hangout@UOB branch concept, students gain experience in areas such as finance, customer experience management and marketing. The opportunity to work at the branch also provides them with an understanding of the customer journey across both physical and digital channels and how we engage customers through an omni-channel approach. We hope that through the experience, the students will stand out for the skills and knowledge they have gained from working with us when they secure their first role out of school,” Janet said.

strong foundation for their careers. The branch is managed by SP students from the School of Business under the supervision and mentorship of UOB. These students will complete a 22-week stint as interns at

We hope that through the experience, the students will stand out for the skills and knowledge they have gained from working with us. the branch during which they are trained in different aspects of branch management from operations and customer experience to risk and compliance.

UOB’s Head of Group Channels and Digitalisation Janet Young said Hangout@ UOB provides the opportunity for the bank to

Designed by students for students In keeping with the SP students’ need for digital engagement, the branch has a digital wall which uses artificial intelligence (AI) for social engagement. The bank is the first in Singapore to enable AI for social engagement in a branch. Students can play interactive digital games that use facial and body recognition technology to complete different challenges such as matching their facial expressions with emoticons that appear on-screen.

The students also wanted Hangout@ UOB to be a social space where they could interact with one another between lectures. As part of this, Hangout@ UOB will be used as a venue for student outreach programmes such as financial literacy workshops and talks with experts in innovation, entrepreneurship, and career guidance.

A concept space that is able to hold events, activities and workshops for students

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BANKING AND FINANCE | DECEMBER 2020 65

MID-SIZED DOMESTIC RETAIL BANK OF THE YEAR - VIETNAM

HDBank takes lead in Vietnam’s retail market

HDBank has been honored with the second and back-to-back award in Asian Banking & Finance for its impressive results in the retail segment.

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sian Banking & Finance is the prestigious Asian financial magazine, annually conducting independent polls and presenting awards to businesses meeting its criteria and operating in the region.

HDBank was again awarded this year, along with big names in the region and Vietnam, such as CIMB, OCBC, Citibank, Agribank, Vietcombank, BIDV, HSBC, Standard Chartered, etc.

The “Best Domestic Retail Bank” award was conferred to HDBank based on its 2019 business results in all trades—including operation size, business network, services and solutions for individual customers, utility products and services, market contributions, as well as objective customer reviews, in which retail took the spot light.

HDBank’s achievements both in general and retail are the result of processes in implementing its orientation to become a leading bank in retail, consumer, and small and medium enterprises (SMEs). HDBank has implemented this orientation strategy and reached to the top of the market with a strong financial foundation and outstanding network underpinned by its M&A capacity.

From that emerged a unique ecosystem with customer data covering finance, consumption, retail, aviation, and energy, as well as diversified products and services meeting the needs of each individual, 66 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

households, or SMEs across the country. At the same time, its market share and clientele are also constantly growing.

In the individual loan side, HDBank registered a strong growth with various products such as agriculture loans, business loans, car loans, and secured consumer loans.

HDBank also offered competitive interest rates, revolving around the orientation of

HDBank’s achievements are the result of the bank’s processes to become a leading bank in retail, consumer, and SMEs. Green Bank – pro-environment protection.

In the meantime, retail and consumption via Digital Bank - Happy Digital Bank are well promoted.

Strongly investing in digital transformation, HDBank provides many services applying modern technologies to offer customers more benefits and facilities via mobile banking and internet banking as well as digitalizes internal processes and transactions in the attempt to become a digital and paperless bank.

In addition to the excellent performance in retail loan, HDBank is also a forerunner in

the service of opening enterprise accounts totally online with digital signatures and the first bank in Vietnam to join TradeAssets Trade Finance E-marketplace, to connect and process trade finance transactions on blockchain application platforms. Recently, the bank deployed a global payment query service via Swift GPI, allowing customers to quickly and accurately get updates of the status of international money transfer transactions.

Actively implementing all programs to support customers to handle the difficulties and overcoming the COVID-19 pandemic, HDBank maintained sustainable development momentum Q2, with its semi-annual cumulative profit reaching VND2,908b, and the NPLs remained below 1.1% - the lowest in the entire industry.

CONTACT Ho Chi Minh City Development Joint Stock Commercial Bank 25bis Nguyen Thi Minh Khai, Ben Nghe ward, district 1, HCMC Contact Number: (+84) 19006060 Fax Number: (+8428) 62 915 900 Email: info@hdbank.com.vn Website: www.hdbank.com.vn

ASIAN BANKING AND FINANCE | DECEMBER 2020 67

DOMESTIC RETAIL BANK OF THE YEAR - THAILAND DEBIT CARD INITIATIVE OF THE YEAR - THAILAND SERVICE INNOVATION OF THE YEAR - THAILAND CORPORATE & INVESTMENT BANK OF THE YEAR - THAILAND GREEN DEAL OF THE YEAR - THAILAND

Siam Commercial Bank (SCB) provides a wide array of financial products and services to meet the needs of a broad range of customers. patients to make payments without queuing.

As one of the leading universal banking groups in Thailand, SCB garnered five awards at the prestigious Asian Banking and Finance Awards 2020.

Domestic Retail Bank of the Year SCB uses its customer-centric core capabilities to extract customer insights, innovate segment-based financial solutions, and leverage hyper-personalization modules to deliver personalized value propositions and seamless digital experiences via the ‘SCB EASY App’.

SCB also rolled out the personalized financial management called “JUST FOR YOU” which offers personalized savings, spending and investment insights, and transaction reminders via the SCB EASY App. Customers can also fulfill their borrowing needs anytime anywhere 24/7 via ‘DEEJUNG Credit Card/Revolving Credit Line Utilization’ and ‘SCB-ONE Digital Lending Experience’.

Cardholders needing cash can convert unutilized credit lines into cash and choose flexible repayment terms, as well as easily turn itemized amounts into installment plans.

Debit Card Initiative of the Year PLANET SCB, a hybrid debit-prepaid card for a cashless society, lets SCB cardholders go cashless and convert or top-up to 13 foreign currency wallets at preferred FX rates, avoiding the need to carry cash. Cardholders can make payments in any currency using the VISA debit network without paying foreign exchange fees and withdraw foreign 68 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

currencies worldwide. Cardholders can also shop online in any currency using locked-in rates on PLANET SCB or debit networks with no markup fee, and manage all transactions via the SCB EASY App 24/7.

‘‘Toward the vision of becoming ‘the Most Admired Bank’, SCB is committed to creating balanced value propositions for all stakeholders including customers, employees, shareholders, regulators and society.’’

Service Innovation of the Year The Smart Hospital Project is led by SCB in collaboration with Thailand’s Top two public hospitals, Siriraj and Ramathibodi Hospitals.

This project boosts the customer experience by leveraging technology and innovation, allowing patients to obtain new patient Hospital Numbers, manage appointments on-line, receive queue alerts, check personal health information, and make on-line payments seamlessly via the SCB EASY App. Its self-service payment kiosks also allow

Corporate and Investment Bank of the Year SCB’s Investment Banking Department helped bring several landmark transactions to market in 2019, raising over THB70b across various equity offerings. SCB Securities acted as joint book-runner and joint lead underwriter for the initial public offering of Asset World Corporation.

Additionally, SCB was advisor for GPSC’s acquisition of GLOW, the largest ever acquisition in the Thai power industry.

SCB was also advisor to the Digital Telecommunications Infrastructure Fund’s (DIF) asset acquisition and capital raising effort, spearheaded by SCB’s retail and high net worth investor base.

The wide array of deals successfully completed in 2019 further highlights the SCB Investment Banking Department’s ability and expertise with REITS, Infrastructure Funds, Equities, Bonds, and Block trades.

Green Deal of the Year As SCB integrated sustainability practices into its business strategy, the bank is committed to creating economic and social stability in parallel with conserving the environment. This goes beyond sustainability in SCB context but also related to the finance and banking services that it provides to clients. Amongst other functions within SCB, Capital Markets Function under the Wholesale Banking has been engaging with many large corporates to promote Green financing and had successfully arranged the Green Bonds for BTS Group Holding PCL amounting THB13b in May 2019.

In many ways, this was a key milestone for Thai Capital Markets as the first Thai Green Bonds offering to institutional and high net worth investors and the largest Green Bonds ever issued in Thailand. This transaction also promoted financial inclusion and creating shared value between the issuer and its investors beyond traditional fund-raising alternatives. SCB is committed to the path toward sustainable banking and will continue to engage the capital markets in the broader context.

ASIAN BANKING AND FINANCE | DECEMBER 2020 69

MARKETING & BRAND INITIATIVE OF THE YEAR - PHILIPPINES DIGITAL BANKING INITIATIVE OF THE YEAR - PHILIPPINES

Changing the Philippine banking landscape through technology

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n just a little over 18 months in the country, CIMB Bank Philippines leads in making significant changes in the Philippine banking landscape. Using an all-digital, mobile-first approach, the bank managed to onboard 2.5 million customers through the CIMB Bank PH app.

What sets CIMB Bank apart from other key players in the country is its accessibility to the normal, everyday Filipino. By simply downloading the CIMB Bank PH app, anyone can sign up for a bank account in less than ten minutes, minus the extensive requirements traditional banks usually ask from their customers.

“At the core of our services and offerings is the desire to give our customers the power to manage their own money. Now anyone can open a bank account safely and securely without having to walk into a physical branch,” said CIMB Bank Philippines Chief Executive Officer Vijay Manoharan.

CIMB Bank gives importance to providing top-notch financial products to the nation’s unbanked. By lessening the hurdles in setting up a bank account, many Filipinos were able to open their very first savings account all 70 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

through their mobile phones. In fact, 30% of CIMB’s customer base is composed of individuals who are entirely new to the banking landscape.

“Our all-digital banking platform was designed to bring banking to more Filipinos, who otherwise may not have been able to access formal banking services,” Manoharan added.

Apart from the convenience and accessibility that CIMB offers to their customers, the bank makes sure that their depositors get the best value for their money.

With one of the best market interest rates, UpSave account holders can enjoy higher interest on their savings without any required minimum balance and lock in period.

UpSave depositors can also enjoy 1600% more on their savings as CIMB offers a special interest rate promo of 4% p.a. This promo is available to all UpSave account holders with balances of at least PHP100,000.

Additionally, the bank also provides them with a hefty life insurance coverage which is equal to their average daily balance of up to PHP1m for free.

To address the Filipinos’ needs to get access to their finances easily, CIMB also offers a free VISA payWave Card to their Fast Account holders. All they need to do is to deposit at least PHP5,000 to their account in order to receive their debit card straight at their doorstep. Customers may use this card for online payments to 46 million merchants worldwide and in over 25,000 ATMs

“Banking should be fast, simple, and convenient where Filipinos wouldn’t be needing a physical bank branch” nationwide free of charge.

Along with deposit accounts, CIMB Bank empowers many Filipinos by leveraging them financially through the CIMB Personal Loan. Unlike ordinary bank loans, customers no longer have to go through a tedious application process nor fall in line just to submit their requirements. Instead, they only need to submit one valid ID and one pay slip in order to borrow as much as PHP1m. All these

can be done through the CIMB Bank PH app.

Through this consumer-friendly and straightforward approach, CIMB managed to help 51% of their Personal Loan customers in securing their first-ever bank loan. Additionally, Personal Loan also helps Filipino small business owners and entrepreneurs to get enough capital for establishing or expanding their businesses.

Furthermore, CIMB strengthens its presence in the market by forging partnerships with other FinTech companies to build a solid digital platform banking strategy. Its partnership with GCash, the leading digital wallet in the country, enabled many individuals to get access to financial tools. Through the Save Money Feature on the GCash app, also known as GSave, users can start building their savings safely and securely with CIMB Bank’s competitive interest rate.

“Banking should be fast, simple, and convenient where Filipinos wouldn’t be needing a physical bank branch. This recent pandemic as an eye-opener has further shown the way to go all-digital as we see further demand in digital banking,” Manoharan said, emphasizing on how CIMB Bank’s services proved to be critical in the present situation.

“We are humbled by the two wins in ABF Retail Banking Awards—Marketing & Brand Initiative of the Year - Philippines, and Digital Banking Initiative of the Year - Philippines—and are honored to have been recognised in just our first year in the market” Manoharan added, “We owe many of our milestones to our customers for trusting in us and to believe in the future of digital banking as we embark on transforming the banking landscape in the Philippines.

We also look forward to empowering more Filipinos and giving them all the benefits of a having a bank account and convenient access to credit ” “Filipinos deserve better value and returns from their bank. We at CIMB PH, hope with our all-digital mobile first bank, everyone can open a bank account without any hassle, anytime, anywhere, safe and securely, and with our best in market savings interest rates of up to 4%, our customers can start their savings journey with us,” said Manoharan.

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ASIAN BANKING AND FINANCE | DECEMBER 2020 71

TRANSFORMING CIMB THAI’S CONSUMER BANKING ARM INTO A KEY INDUSTRY PLAYER

Tan Keat Jin shares the key achievements and what lies ahead for CIMB Thai Bank’s awardwinning Consumer Banking business.

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IMB Thai Bank’s Senior Executive Vice President, Head of Consumer Banking Tan Keat Jin notes that the bank has become one of the retail market leaders— both on wealth and theretail credit.

On the wealth side, CIMB Thai stands out as the first issuer of the product structure and the most active in the secondary market bonds. Therefore, when clients think of wealth, CIMB Thai’s name will be one of the names that pops up.

CIMB Thai has set a goal to become a leading Wealth Management business, with a diverse selection of wealth and investment products, coupled with a highly personalized client service for its CIMB Preferred segment—for clients with AUM

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of ฿3m and above. The bank has partnered with eight asset management companies to offer a broad range of mutual fund products via an open architecture platform. These efforts have been recognised with CIMB Thai clinching the Wealth Management Platform of the Year (Thailand) award from Asian Banking & Finance.

On the other hand, the bank is also making great progress on the credit side, from taking the customer-centric approach to designing the credit program that meets all client needs. CIMB Thai uses risk-based pricing strategy to give back low and reasonable interest back to clients. Making its presence known amongst the clients who are looking for a home loan or refinancing, CIMB Thai’s name is also one of the names on the client’s choices.

Moving forward, the bank aims to be the leader of consumer products. CIMB Thai has made a notable digital transformation by introducing both Digital Wealth and Digital

“CIMB has been relentlessly developing our apps, both on the Wealth and Lending side.

Clients who used to go to the branches are now more open to much more accessible and convenient Digital Bank.”

Lending products and services into its clients’ journeys.

On the Digital Banking front, CIMB is one of five banks to exit the Bank of Thailand’s sandbox for conducting eKYC and likely to

exit the NDID (National Digital ID) sandbox by end of 2020.

Furthermore, CIMB aims to strengthen its wealth proposition by leveraging digital channels to make it more convenient for clients to purchase funds via app. In addition, CIMB Thai clients will also be able to purchase insurance via the app by Q1 2021.

In addition, CIMB Thai has started enabling the loan application process via its mobile app, for both personal loans and auto loans. Through its collaboration with Chinese fintech 9F, clients can now apply for personal loans within a limit of ฿12k to ฿60k per person with lower interest rates than credit cards. Whilst the current process still requires a bank messenger to pick up physical documents, clients will be able to send applications directly via the app when CIMB exits the NDID sandbox, likely to be by end of 2020.

For auto loans, clients can now also apply via the CIMB Thai Auto app by selecting the car model, year, as well as the desired loan size.

“We have recently launched the Chill D Savings Account, our first truly digital product, with the goal of attracting new-to-bank clients. There are three key propositions that make Chill D special— First is zero fees, everything is free including Chill D debit cards with no annual or sign up fees, and free unlimited cash withdrawals at any banks’ ATM machines.

Second, the Chill D Savings offers a maximum interest of up to 2% p.a., which is highest in the market. Third is convenience, with clients no longer having to go to a bank branch to open an account. Clients can also authenticate at any 7-Eleven nationwide with more than 12,500 locations. CIMB Thai has set its sights on 500,000 signups for the Chill D Savings accounts,” said Tan Keat Jin. “CIMB has been relentlessly developing our apps, both on the Wealth and Lending side. This has resulted in total transactions growing by more than 2.5 times, the majority of which comes from the mobile app. This shows that clients who used to go to the branches are now more open to Digital Bank which is much more accessible and convenient,” he added.

CONSUMER FINANCE PRODUCT OF THE YEAR - THAILAND WEALTH MANAGEMENT PLATFORM OF THE YEAR - THAILAND

THE SECRET TO AN AWARD WINNING WEALTH MANAGEMENT PLATFORM

A conversation with Dusanee Klewpatinontha, Head of Wealth & Preferred Segment, CIMB Thai Bank.

CIMB Thai may not be a big bank in the conventional sense; however, its strength lies in the ability to leverage its ASEAN-wide regional platform, as well as a strong offering of investment products.

Growing the wealth business is no easy task, but the bank has managed to record strong annual growth year in year out. People tend to associate ‘Wealth’ with just deposit or mutual funds, but in reality, there is so much more. For example, CIMB Thai is the first

bank in Thailand to make structured notes available to its preferred clients by making the minimum ticket size more manageable, at ฿1m.

“We also have a wide selection of bonds— to be able to sell ฿15b worth of bonds in a single IPO is a testament to the strong interest from our clients. We are also able to refer our clients to our regional businesses such as Singapore – a key edge for clients looking to diversify their investment portfolio,” said CIMB Thai Bank Head of Wealth & Preferred Segment Dusanee Klewpatinontha.

“I think other banks are wary of product cannibalization, so they might not have as many products available on shelf. In contrast, we take a client-centric approach because

“Clients often ask why do we invest so much time and effort with one-on-one sessions. Well, we want to win their hearts.” ultimately we want what is best for our clients,” she added.

Aside from its products, CIMB Thai takes great pride in providing exceptional service.

For example, it has organized over 200 one-on-one workshop sessions with clients, educating them about Inheritance Tax planning.

“I personally conducted these sessions in Bangkok as well as in the upcountry. It gave me the opportunity to get to know my clients better, to understand their needs and be able to recommend products truly suited to them,” said Dusanee.

“Our clients often ask why do we invest so much time and effort with these one-onone sessions when we are not making any money out of it? Well, we want to win their hearts.”

This past year CIMB Thai also launched My Wealth, a new system that consolidates client data from multiple platforms into a single dashboard. The record of clients’ past purchase is readily available on My Wealth, which helps the bank’s sales team to create a personalised client investment portfolio.

More importantly, My Wealth’s alert system notifies clients when their deal reaches maturity. My Wealth allows CIMB Thai’s sales staff to provide its clients with a true end-to-end service. CIMB Thai also has a dedicated data management team working behind the scenes to analyze client investment profiles to recommend better products that suit the clients’ needs.

WHY CLIENTS CHOOSE CIMB

Mrs. Varang Chaiyawan Director & First Senior Executive Vice President, Thai Life Insurance PCL. “CIMB’s reputation as a renowned regional bank led me to become a customer of CIMB Preferred. Even with high expectations, I was still

impressed with the tailored advice and personalized service offered by my relationship manager. My career in the insurance industry often requires me to look from the macro perspective, but when it comes to my personal investment portfolio, I need a consultant who can reliably keep me upto-date on opportunities as the market moves. I appreciate my relationship manager’s expertise, can-do attitude and ability to drive results that match my investing preferences. CIMB’s attentiveness to customer needs is unmatched and is what sets them apart from other bigger banks.”

Mr Viroj Lerthirunvibul Partner at T.S.C. Siam Construction Company Limited “What impresses me most about CIMB Thai is the sheer number of financial products they have available on shelf, the selection is bigger than

other banks in my experience.

Additionally, their sales staff is very knowledgeable and they take the time to educate clients to help them better understand the products. As a client, I rely on my Relationship Manager to open doors to exciting investment opportunities, they have done a great job anticipating my needs and recommending products that suit my investment preference.

When I first became a CIMB client around 10 years ago, I only had a deposit account. Now I have everything from insurance, bond, deposit, mutual funds, as well as structured products. I think I have every single product CIMB has available on shelf.”

ASIAN BANKING AND FINANCE | DECEMBER 2020 73

DOMESTIC RETAIL BANK OF THE YEAR - SINGAPORE

UOB leads innovations in the wealth advisory services

UOB’s digital car loan launch with car dealership partners

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OB took home the Domestic Retail Bank of the Year 2020 at the recently concluded Retail Banking Awards 2020, presented by Asian Banking and Finance magazine. The event honours the most outstanding banks and financial institutions that have introduced groundbreaking products and services that empowered them to successfully adapt with the rapidly evolving tech landscape.

UOB’s omni-channel strategy places customers at the centre to ensure that their every banking need and preference is met.

With a strong understanding of customers’ preferences, UOB provides its customers a choice in how they engage with the bank.

Its award-winning mobile app UOB Mighty, which combines banking services, contactless payments and rewards in a single app, continues to set the standard for mobile banking apps, enabling customers to bank, pay, and enjoy rewards and benefits according to their preferences.

“To meet both the lifestyle and financial needs of our customers, we also draw on the capabilities of our partners, forging ecosystem partnerships,” said Jacquelyn Tan, Head of Personal Financial Services Singapore, UOB. UOB launched digital car loans with car dealership partners to reduce application and approval times, as well as the UOB Home Solution which includes an Instant Online Property Valuation tool, Singapore’s first bank-backed online valuation tool and the GetBanker service.

Apart from homebuyers, the bank also helps homeowners meet their utility needs 74 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

through the UOB Utility Marketplace, where customers can search and sign up for the best deals. The bank also leverages artificial intelligence, machine learning, and data analytics for its proprietary predictive analytics engine to provide a personalised customer experience at new Wealth Banking Centres.

In 2019, the bank also launched Mighty Insights as part of the revamped UOB Mighty.

It was the industry’s first AI-driven digital banking service which provides personalised insights that enable our customers to track their savings and expenses effortlessly.

Within the app, customers can receive

“With a strong understanding of customers’ preferences, UOB provides its customers a choice in how they engage with the bank” personalised alerts on their finances.

“As UOB continually improves its wealth advisory services, we have also rolled out various digital tools to help our customers make informed investment decisions and meet their wealth goals effectively,” added Jacquelyn. These tools include a purposebuilt digital wealth advisory platform called Portfolio Advisory Tools (PAT).

UOB’s wealth advisers are equipped with the PAT, which draws upon 12 years of historical market data to simulate through data visualisation the expected performance

of investment portfolios against various economic scenarios, and enables wealth advisers to help customers gain deeper insights into their investment portfolios and to have more meaningful conversations with them.

Furthermore, the bank’s wealth advisers also use digital tools such as the UOB Portfolio Explorer and UOB Insurance Explorer to manage customer investments.

UOB also has a strategic alliance with Grab to encourage the use of digital services amongst ASEAN consumers, allowing UOB card members to enjoy special promotions and privileges when paying for Grab services with their UOB cards.

Moreover, the bank collaborated closely with Prudential across its ASEAN network to provide protection and wealth solutions to meet the fast-growing and changing needs of consumers of these markets.

One of this is the launch of Nickelodeon Academy of Smarts in 2019, which encourages children to learn about themselves through different activities based on their natural talents or ‘Smarts’, together with Prudential Singapore and Nickelodeon Asia. Through the Nickelodeon Academy of Smarts, parents are able to discover their child’s natural talents and partner with UOB to create a financial plan to nurture the development of their child.

Aside from this, UOB also partnered with Prudential Singapore to launch the UOB Lady’s Saving Account to help women protect their health and wealth.

The UOB Lady’s Savings Account was designed to make it easy for women to grow their savings and to protect their health concurrently. This is said to be Singapore’s only financial solution for women which offers health insurance whilst they save, and provides account holders with up to S$200,000 coverage for six types of female cancers.

Apart from providing cancer coverage, the UOB Lady’s Savings Account also offers complimentary health screenings and preferred medical consultation rate from a panel of 500 clinics in Singapore.

“With the UOB Lady’s Savings Account, our customers can have peace of mind knowing that their health and saving needs are being met,” said Jacquelyn.

Leading, Trusted. Enabling Growth.

ASIAN BANKING AND FINANCE | DECEMBER 2020 75

WEALTH MANAGEMENT PLATFORM OF THE YEAR - HONG KONG

HSBC FlexInvest – Break your stereotypes on investment!

HSBC HK Mobile Banking app allows users to access 10 funds with zero transaction costs and low platform fees

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ech savvy, ambitious and curious, the younger generations never stop exploring opportunities—the latest offers, hot topics, and popular services. Social media like Facebook and Instagram provide massive amounts of information every day. It’s true that most of you recognise the importance of managing wealth.

As the saying goes, the smart always invest before spending what’s left.

Wealth accumulation is a crucial step in achieving your life goals. But what stops you from doing this? Newer investors cite common worries and obstacles, ranging from lack of funds to transaction fees to complicated mechanisms for deriving profits, to an overwhelming choice of products.

Despite being eager to grow savings, many young would-be investors feel lost in making their first move in financial planning, lacking confidence to enter the market. In fact, you don’t have to begin with a large investment amount or something too complicated. Have you ever imagined starting with just HK$100—around the cost of a lunch set?

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Start off with simple, low-cost investments.

Now you can access 10 funds on the HSBC HK Mobile Banking app, selected specially to give you access to the most important markets and asset classes.

Often, financial products will charge a fee for each transaction, so that every trade will have a small cost that, together, could impact on the value of your portfolio. But HSBC FlexInvest is different. It has zero transaction costs* and low platform fees, giving you the flexibility to change your mind with no extra costs. In fact, FlexInvest is designed so that small investors can carry out more trades. And we’re also waiving the monthly fees for customers with an average balance below HK$10,000!

Only when your portfolio value is between HK$10,000 and HK$200,000 will you be charged a small flat rate fee of HK$28 per month. And for portfolios above HK$200,000, there is a standard rate of 0.8% per annum. We believe that being

FlexInvest is designed so small investors can carry out more trade and to give access to the most important markets and asset classes transparent about the charging mechanism removes some of the fears of investing and makes it affordable for new investors.

And, so long as you have an integrated

investment account at HSBC, you can start investing with FlexInvest.

Easy-to-understand fund selection process.

You can easily compare and choose from the 10 funds on FlexInvest by looking at 1-year return, performance charts, risk levels and the funds’ key features.

Once you have decided, you can set up a monthly investment plan or make a oneoff investment in just a couple of simple steps. There are nine index funds and one money market fund especially designed for FlexInvest, each with different risk levels. It’s always important that you understand how much risk you’re willing to take and we’ll show you how each fund compares to your Risk Profile. We’ve selected the funds specially to gain exposure to the key markets and build a portfolio, across equities, bonds and cash.

Award-winning platform for unit trust purchase.

With FlexInvest, you can feel confident investing in your future regardless of how much you start with or your level of experience. And you don’t have to take our word for it. FlexInvest has already been awarded “Wealth Management Platform of the Year in Hong Kong” by the Asian Banking & Finance Retail Banking Awards 2020. And thousands of other investors like you have already started investing with FlexInvest. Why not give it a go?

Investment involves risk. This article does not constitute in any form of recommendation / solicitation by HSBC.

ASIAN BANKING AND FINANCE | DECEMBER 2020 77

DIGITAL BANKING INITIATIVE OF THE YEAR - TAIWAN INTERNATIONAL RETAIL BANK OF THE YEAR - TAIWAN

Standard Chartered Bank Taiwan wins top honors at the annual Asian Banking and Finance Awards 2020

Standard Chartered’s Kate Lin on the bank’s growth in Taiwan’s retail banking space.

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tandard Chartered Bank Taiwan Limited won two coveted awards presented at the recently concluded Retail Banking Awards 2020 by the Asian Banking and Finance magazine. Standard Chartered Bank Retail Banking outperformed its peers and won the Best International Retail Bank of the Year 2020 - Taiwan, and the Best Digital Banking Initiative of the Year 2020 – Taiwan.

“We are delighted to receive this commendation from Asian Banking and Finance”, said Kate Lin, acting CEO and Head of Retail Banking of Standard Chartered Bank Taiwan; “This is the testimony to the efforts to reinvent and digitize the business model with a human touch. It also reinforces the right strategy of focusing on clients which encourages the team to continue to provide best services to our clients and further fulfill their unmet needs. This is particularly important during recent tough times that the team has a strong commitment to support clients to navigate through volatile global market conditions.”

Standard Chartered Bank has been operating in Taiwan for decades, and the franchise continues to thrive with its innovative and distinct business strategy.

In recent years, Standard Chartered Taiwan Retail Banking business has been resilient in

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driving returns given its focus on customer experience and cost-efficient growth of its franchise, getting the top spot amongst all international banks in Taiwan.

In 2019, Standard Chartered Bank Taiwan Retail Banking posted significant growth in both income and operating profits with a strategic focus on high-net-wealth and affluent segments, driven by underlying wealth management growth, coupled with double digit growth in its lending products.

“Banks have a role to play by helping people manage their money and providing tools that make banking easier” The key determinant behind the strong numbers is the customer-centric approach and the bank’s vision to deliver service with a personal touch.

“We talk and listen to the clients; we position them at the heart of our transformation journey, and we partner with them towards their wealth and life aspirations by offering personalized advice and solutions at different life stages,” said Lin. Weighing on the growth potential of

Taiwan’s retail banking space and digital partnerships development, Standard Chartered Group has put significant investments in technology infrastructure upgrades in the market to pave the way for a larger corporate culture transformation. As technology reshapes the banking industry, Standard Chartered believes a disruptive mindset is critical to the bank’s ambition to make banking simpler, faster and more convenient.

By embarking on a customer-centric and digital-first strategy, Standard Chartered Taiwan Retail Banking has launched numerous innovative banking solutions in 2019. The one being most well received are the SC Taiwan LINE official account and SC Keyboard Banking in 2019. Embedded within SC LINE official account is AI powered chatbot, Stacy, that provides 24/7 instant and interactive support with the know-how to fulfil customer requests and solve problems, ranging from latest product offering to credit card payment, and reward points inquiries.

Meanwhile, SC Keyboard Banking is an industry leading keyboard based social media payment capability in Taiwan, which allows users to make transactions and view account balances without interrupting their social moments, empowering clients’ digital capability in an easy and seamless way and has received broad and positive feedback from clients.

Moving forward, Standard Chartered Bank Taiwan Retail Banking pledges to expand its digital capability by partnering with fintech, technology, as well as ecommerce companies to build an ecosystem and attract the younger digital native customer.

“People around the world have been hit by the economic impact of the pandemic.

Banks have a role to play both by helping them manage their money and providing tools that make banking easier so they can focus on leading the way to recovery,” added Lin. Standard Chartered Bank Taiwan Retail Banking will continue efforts at culture transformation enabling their staff to become future compatible and explore new ways of working to further encourage innovation at the workplace.

Think Clients Innovate Future International Retail Bank of the Year

Digital Banking Initiative of the Year

Your Best Retail Bank Partner

As an international bank with the largest network in Taiwan, Standard Chartered aims to offer individuals and corporate clients full-scale banking services by leveraging our global resources and professional advisory capability, and aspires to become the Bank of Choice in the market. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed always.

Our digital transformation is aiming to provide a distinctive digital banking experience for our clients, by helping them live the way they want and connect with the Bank in the way they prefer in the digital era. We have a clear vision to build an end-to-end digitalized bank and have a digitally-enabled channel ecosystem that seamless interlocks within SC and with external ecosystems.

ASIAN BANKING AND FINANCE | DECEMBER 2020 79

CONSUMER FINANCE PRODUCT OF THE YEAR - PHILIPPINES NEW CONSUMER LENDING PRODUCT OF THE YEAR - PHILIPPINES

EastWest wins two awards for its Singapore Airlines KrisFlyer Mastercard

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astWest won two awards at the 2020 Asian Banking and Finance Retail Banking Awards for the EastWest Singapore Airlines KrisFlyer Mastercard, a best-in-class co-brand credit card for travel. The Bank won the Consumer Finance Product of the Year and the New Consumer Lending Product of the Year awards for the Philippines.

The multi-awarded EastWest Singapore Airlines KrisFlyer Mastercard gives the best spendto-miles conversion that allows cardholders to earn more miles for every purchase. Available in Platinum and World variants, cardholders earn up to three KrisFlyer miles for every Php45 and Php36 spend, respectively.

Cardholders can also enjoy as much as 6,000 bonus KrisFlyer miles upon reaching the minimum spend within three months of card activation, and as much as 15,000 anniversary bonus KrisFlyer miles upon reaching the minimum spend of PhP200,000 within twelve months from card approval date, and between anniversary dates thereafter, along with other perks.

The curated co-brand credit card is the result of the first-of-its-kind partnership between KrisFlyer;

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“This award is a testament of our continued efforts to understand our customers’ needs through products and services that are most suitable to the market”

the frequent flyer program of the Singapore Airlines Group, and EastWest; a top universal bank in the Philippines. It enables cardholders to experience Singapore Airlines’ worldrenowned service and leading cabin products on its international network.

This is the second consecutive year that EastWest bagged the Consumer Finance Product of the Year award for the Philippines. Last year, EastWest Auto Loan also won this prestigious award, in addition to the Automobile Lending Initiative of the Year award.

These recognitions show EastWest’s continuing commitment to provide the best services to customers through innovative loan products that will help them achieve their dreams and aspirations.

“We are truly proud that our consumer lending products have been consistently recognized by an esteemed institution as the best products in the country. It is a testament of our continued efforts to understand our customers’ needs and promptly address them through products and services that are most suitable to the market,” said Jacqueline S. Fernandez, EastWest Senior Executive Vice President & Chief Lending Officer.

PROCASH

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DOMESTIC RETAIL BANK OF THE YEAR - MYANMAR

Myanmar’s Cashless Future Hinges on Digital Security

KBZ Bank drives the growth of mobile wallets in Myanmar through KBZPay

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s one of the final frontier markets in the world, Myanmar is transitioning from an era where banking was once for the elite, to now, where banking needs to be accessible to everyone.

The banking sector, however, is not yet fit for purpose or for growth. Myanmar is still a cash-based society, where up to 99% of all financial transactions in the country are done via cash. Access to and awareness of financial and digital services remains limited, with almost 4 in 5 people in Myanmar (80%) not owning a bank account.

With the introduction of mobile wallets, this is all beginning to change.

Across Myanmar, people from all walks of life are now using phones to manage their finances. Mobile wallets have heralded a new era in the development of Myanmar’s digital economy.

Progress in this regard is clear as the uptake of mobile financial services in Myanmar snowballs. Since launching in 2018, KBZPay, the country’s leading mobile wallet, has facilitated more than US$5.9b in transactions.

Growth shows no signs of slowing with transactions between 1 January and midAugust of this year reaching US$3.6b, an increase of 75% on the total transfer volume seen in all of 2019. This progress was in part due to the COVID-19 lockdown and stay-athome measures but also reflects broader industry growth and lifestyle trends.

Since April, the free, instant, 24/7 money transfers between registered KBZPay users rose 87% in transaction volume and

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162 percent in transaction value. These results indicate that using a mobile phone to perform financial transactions is becoming second nature to many in Myanmar.

An unfortunate side-effect of this progress is a rising number of cybercriminals targeting mobile wallet apps, with identity

“KBZPay is committed to leading the industry’s digital safety and security standards.” fraud and password theft becoming more frequent both in Myanmar and internationally. These risks threaten to derail the growth and adoption of mobile wallets and other digital financial services in the country.

So, are mobile wallets really safe? The good news is that due to the lower likelihood of them being lost or stolen, mobile wallets are generally more secure than physical wallets. And, with the advancements that KBZ Bank and other players in fintech are helping to drive, mobile wallets in Myanmar are only going to become even safer.

Since launching in 2018, the financial security of our six million users has always been our highest priority. We have worked hard to combat the threat of scammers and fraudsters and have introduced many industry-first safety features.

Ours is the first mobile wallet app in

Myanmar to use facial recognition as a part of the customer onboarding process.

It also is the only mobile wallet in Myanmar to display the name of the person set to receive a transfer when a phone number is entered. This added layer of security ensures that money goes to the right person.

A PIN protects all accounts and users can track transactions in the app. On top of this, a unique, one-time password must be generated before a user logs in on a new device.

Our safety practices extend to the 290,000 KBZPay agents and merchants across the country. All merchants must go through our rigorous onboarding process, and users can check the name of the merchant they are sending money to using the in-app QR code reader. This feature ensures a payment is going to the right place.

True financial inclusion can only come through digital literacy, a key element of which is an understanding of cybersecurity. With that in mind, we are working hard to educate our customers on how to keep themselves and their money safe in the digital economy.

This is in-line with KBZ Bank’s broader commitment to keeping people and their finances safe both online and off, through the COVID-19 pandemic and beyond. Our 18,000 staff on the ground engage with thousands of customers weekly to guide them on tips for using KBZPay safely and protecting their finances.

The importance of good “digital hygiene” is enforced through the KBZPay tutorials that are continuously being shared on social media and can be viewed in the new app version – KBZPay 3.0.

The work of protecting our customers will never end, and KBZPay is committed to staying on the leading edge of the industry when it comes to our safety standards. We do not underestimate the role that financial security will play in making full financial inclusion in Myanmar a reality and are confident that our efforts and investments in this area will pay off well into the future .

ASIAN BANKING AND FINANCE | DECEMBER 2020 85

DOMESTIC RETAIL BANK OF THE YEAR - CHINA GOLD AND PRECIOUS METALS BANK OF THE YEAR - CHINA

Ping An Gold Bank : Air corridors connect the world leasing, consignment, pledge, liquidation, warehousing, intermediator, interbank cooperation, enquiry, import-export, etc.

We have been conducting gold-importing, agency trading, proprietary trading and goldleasing in a sorted-out manner.

From 2014 to 2019, our gold trade ranked in SGE’s top 10. Our platinum and silver trading also ranked among the top list in SGE. Just in 2019, ALGO trading went into operation and has notably improved the trading ability.

Ping An Bank commits in offering a more stable and excellent service to customers thanks to the new AI trading system.

Ping An Bank offers diversified financial services for retail and corporate customers.

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usiness Model and Product Innovation makes Gold Bank a big hit In September 2014, we took the lead in launching the brand “Gold Bank”, which was based on physical gold, focusing on gold monetization, providing the product and service valued and settled in gold, establishing a gold balance sheet, as well as an asset pool to satisfy the clients in all dimensions. This “Gold bank” brand has drawn great attention since then.

For Gold Bank businesses, retail customers can use the “gold account”, which is similar to an RMB account, to complete deals, which may include gold purchase, fixed deposit, automatic investment, finance, exchange, transfer, pledge, and etc.

ALGO trading earned great feedbacks from clients In 2019, the gold price experienced drastic fluctuation. In order to meet the demands of institutions and individuals, Ping An Bank offered ALGO trading designed to catch market fluctuations better. This is managed by professional teams from Asset Management Division and HQ Financial Markets SBU, market risk, and operating risk controllable.

ALGO trading provides support for multiple trading channels—trade-on platforms, such as Shanghai Gold Exchange (SGE)—to facilitate investors in integrating operations.

It can also achieve market display, trading operations, and the organic integration of trading information.

ALGO trading can also provide convenient trading operations, such as support for custom interface layout and a variety of quick 86 ASIAN BANKING AND FINANCE | DECEMBER 2020 2019

order operations. In addition, new algorithmic trading and monitoring functions are added to assist investors in order to stop profits and losses, automatic order breaking, as well as other operations.

“In 2019, we innovatively developed ALGO trading, which provided better financial experience to our customers.”

Extraordinary floor trading ability and fintech help customers seize the opportunity As one of the initial financial members of SGE, Ping An bank has been qualified to develop the business of proprietary trading, agency trading, physical & paper commodity trading,

Future development direction: Gold Smart Recycle In order to meet the demand of people selling their own gold bullions, coins, or jewelries, Ping An Bank offers “Ping An Gold Smart Recycle.” This initiative helps people sell their gold online or call for homedelivery service through the following steps: • Submit an application online: First, you need to fill an application form online and upload several pictures of the gold production. Ping An Gold Smart Recycle system will inspect the file and make preliminary estimation on quality and price.

• Wait for pick-up: Second, after your application is approved, a courier will be sent to your home to pick-up the gold.

• Test and pay: Lastly, your gold will be sent to our refinery for a series of tests. You will receive payment from Ping An Bank afterwards.

The bank took the lead in launching Gold Bank in September 2014, drawing great attention from costumers.

INDONESIA DOMESTIC CASH MANAGEMENT BANK OF THE YEAR

Velocity@OCBCNISP: Taking Corporate Banking to A New Level •

OCBC NISP launched Velocity@OCBCNISP to simplify banking processes.

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owadays, consumers and businesses are taking advantage of the mobile banking and internet banking applications, which not only provides convenience for daily use, but also improves their productivity.

There are many characteristics of banking technology shown in the digital era, being progressive and agile are amongst the few most important factors.

For institutions, the need to grow through technology in order to survive the fast-paced competition has become a critical requirement for business leaders.

Understanding these requirements of digital banking, Bank OCBC NISP launched Velocity@OCBCNISP mobile version, an application specifically tailored for businesses to adapt and adjust to the fast-paced competition.

Velocity@OCBCNISP not only provides convenience and simplification of banking processes, but also benefits business actors to carry out financial management, such as Online FX (FX transaction with a real-time and competitive exchange rates), convenient

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billing and taxes payment, payroll disbursement, as well as time deposit account registration and purchasing.

Velocity@OCBCNISP mobile—a development of the Velocity web version—, is a comprehensive banking solution which provides the freedom

“Velocity@OCBCNISP mobile makes business transactions are as easy and comfortable as personal transactions.”

to transact anywhere at any time. It supports business customers and decision makers who prioritize fast & convenient mobility. Velocity@ OCBCNISP mobile makes business transactions as easy and comfortable as personal transactions. Through Velocity@OCBCNISP mobile, they could perform their banking needs with more;

Flexible Velocity@OCBCNISP mobile differs from its retail banking counterpart with its highly customizable, simple-tocomplex features catering to different business sizes, as well as a full array of balance inquiry from current account to trade outstanding & wealth management portfolio.

• Easy Velocity@OCBCNISP mobile could also perform most of the bank’s branch offices functions with a single and multi-level user access. Customers could simply operate the application on their mobile phone anytime, anywhere.

They could also do a foreign exchange with a special rate towards Rupiah.

It also provides a more economical transaction cost with a longer period of deadline and a real-time information on balance and account mutation.

• Safe Customers are served with not only hassle-free applications, but also with a guaranteed security. We secured Velocity@OCBCNISP mobile with SHA 256-bit SSL encryption protocol and 2-factor authentication, to give an optimum transaction security. Business customers could also track their transaction as Velocity@OCBCNISP mobile notified\s them via email. It does also secures the transaction with Token as the transaction authorization Bank OCBC NISP, as a trusted partner to enrich quality of life, always prioritises stability through its prudent principle. Thus, through Velocity@ OCBCNISP mobile, we aspired to also share added value, as we carefully built an app that could answer business customers’ financial needs so they could perform their business stability with an easier, safer, and more flexible way. By going digital, nothing could really put businesses on hold, even during challenging times like we are facing today.

This is our time to drive Indonesia’s economy by becoming one of Indonesia’s business leaders. So, are you ready to #MoveForward with OCBC NISP?

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MERGERS AND ACQUISITIONS DEAL OF THE YEAR - SINGAPORE INNOVATIVE DEAL OF THE YEAR- SINGAPORE PROJECT INFRASTRUCTURE FINANCE DEAL OF THE YEAR- SINGAPORE DEBT DEAL OF THE YEAR- SINGAPORE SYNDICATED LOAN OF THE YEAR- SINGAPORE

UOB leads the region as a trusted advisor

With the focus set squarely on client’s needs, the UOB team was able to come up with a solution for Keppel Infrastructure Trust’s acquisition financing at both the fund and asset level financing within a very tight timeline.

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n supporting its clients’ cross-border growth ambitions and fund raising efforts, UOB’s unique combination of local market presence, established global network, strong capital market expertise and comprehensive suite of financing solutions saw it emerge as the most awarded bank at the Asian Banking & Finance Corporate and Investment Banking Awards 2020.

UOB took out five awards, namely the Mergers and Acquisitions Deal of the Year, Innovative Deal of the Year, Project Infrastructure Finance Deal of the Year, Debt Deal of the Year and Syndicated Loan of the Year. These awards are testament to UOB’s customer-centric approach, the strong relationships it has forged with its clients and the trust that those clients have placed in the Bank.

UOB’s capabilities were demonstrated through its role in the strategic alliance between Thailand’s Siamgas & Petrochemicals PCL (Siamgas) and Tokyo-based Mitsuuroko Group Holdings, which was the basis for UOB being given the Mergers and Acquisitions Deal of the Year award. UOB was the financial advisor to the deal sponsor, Worawit Weeraborwornpong, Founder, Chairman and CEO of Siamgas, and led the discussions for all aspects of the deal, from generating ideas for the strategic alliance, to determining the valuation and pricing structure, negotiating the agreement, executing and finalising the trade, and preparing the public presentation. Key to the success of this deal was UOB’s understanding of the client’s business plans, the bank’s deal structuring capability, and its strong network capabilities across its franchise.

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UOB’s innovative approach to structuring Keppel Infrastructure Trust’s acquisition financing of Australian firm Ixom Group saw it win the Innovative Deal of the Year award. Core to UOB’s ability to devise a tailored financing solution across the debt and equity capital structure was its entrepreneurial spirit. With the team’s focus set squarely on the client’s needs, they were able to create a solution for the acquisition financing at both the fund and asset level financing within a tight timeline.

“UOB remains steadfast in its support of clients despite economic and geopolitical uncertainties.”

Strong deal structuring capabilities solidifies UOB’s role The bank’s expertise in coming up with the most relevant solutions also helped in solidifying its role as a trusted adviser to its clients. The bank has built a strong track record in the Debt Capital Market (DCM) bond space, successfully executing 12 of the 14 largest transactions in 2019. In addition, UOB was involved in all five Singapore Dollar (SGD) AT1 bank issues in 2019 and executed debut SGD issuances for a number of issuers such as ST Telemedia Global Data Centres and ESR Cayman.

In particular, for its role in CapitaLand Treasury Limited’s SG$800m 3.15% 10year fixed rate bond, UOB received the title of Debt Deal of the Year. UOB acted as joint lead manager and bookrunner for the deal, which was at the time the largest

bond issue from a real estate issuer since 2001.

UOB also continued to gain market share and dominate in the DCM Loan space, topping the 2019 Singapore Mandated Lead Arranger (MLA), Singapore Bookrunner and ASEAN Bookrunner league tables by Bloomberg, Refinitiv and Debtwire.

The Project Infrastructure Finance Deal of the Year was awarded to Malaysia’s Refinery and Petrochemical Integrated Development Project. UOB acted as bookrunner and MLA for the US$9.5b syndicated senior secured term loan facility. The deal demonstrated UOB’s ability to unite the relevant teams such as product partners and industry specialists from across its network to deliver on the client’s expectations.

Beyond ASEAN, UOB has also been active in other Asia Pacific DCM Loan markets such as Hong Kong. The bank acted as the MLA, Underwriter and Bookrunner to solely underwrite and to syndicate a HK$9.17b (about S$1.6b) acquisition financing facility for a consortium led by Blackstone Group L.P., Gaw Capital Partners, and Board Street Investment. The deal, which won the Syndicated Loan of the Year, was the largest retail portfolio transaction out of Hong Kong in 2019.

Whilst economic and geopolitical uncertainties continue to weigh upon the market, UOB remains steadfast in its support of clients. As this year’s Asian Banking & Finance awards attest, through its comprehensive suite of investment banking solutions and established regional network, UOB is well-positioned to help its clients optimise their fundraising efforts so as to meet their strategic objectives.

CONTACT

United Overseas Bank Limited 80 Raffles Place #03-01 UOB Plaza 1 Singapore 048624 Email: GIB@UOBgroup.com Website: https://www.uob.com.sg/ corporate/index.page

ASIAN BANKING AND FINANCE | DECEMBER 2020 91

ALLIED BANK WINS

GREEN DEAL OF THE YEAR - PAKISTAN & SYNDICATED LOAN OF THE YEAR – PAKISTAN IN THE ABF CORPORATE & INVESTMENT BANKING AWARDS 2020

ALLIED BANK WINS

PAKISTAN DOMESTIC INITIATIVE OF THE YEAR FOR GREEN BANKING IN THE ABF WHOLESALE BANKING AWARDS 2020 Playing our part in supporting sustainable development and renewable energy projects with our Green Banking offerings.

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We are proud to stand at the forefront of fighhng poverty through economic enablement of the unbanked populaaon of Pakistan.

Naaonwide

200 Branches

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U Microfinance Bank Ltd. (U Bank) is a wholly owned subsidiary of Pakistan Telecommunicaaon Company Limited (PTCL) – EEsalat Company. The bank has a network of more than 200 branches, across 183 ciies and rural areas in Pakistan and offers a wide range of microfinance loans, deposit products and branchless banking soluuons.

Download U Bank Digital App +92-51-111-282-265 www.ubank.com.pk

/UMicrofinanceBankLimited

ASIAN BANKING AND FINANCE | DECEMBER 2020 93

OPINION

PEIYING CHUA

Will open banking be the next wave of transformation in Asia’s financial industry?

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pen banking is emerging as a key trend and the next ‘wave’ of digital transformation in global financial markets. At its core, it is focused on data sharing, which is enabled through application programming interfaces (APIs) which make it possible for two different systems to ‘share’ information with each other. Simply put, this means that consumers will have greater control over their financial data and who to share it with. An example of this in practice would be a mobile banking application that enables users to see all of their financial information and spending habits (across different bank accounts) on one interface.

Developments in the APAC region Over the past few years, we have seen regulators in the APAC region take steps to encourage and at times even mandate financial institutions to adopt open banking practices. In Australia, the Consumer Data Right legislation has been passed, which empowers consumers to instruct their banks to share their data with accredited data recipients.

In Hong Kong, as part of its goal to move Hong Kong into a new era of ‘Smart Banking’, the Hong Kong Monetary Authority has also rolled out a framework requiring retail banks to adopt open APIs. The aim is to enable third party providers to access financial product information, and gradually increase this access to other types of information, such as customer acquisition and transactional processes.

“It is crucial for regulators to strike an appropriate balance between consumer protection and innovation.”

PEIYING CHUA Financial Regulator Partner Linklaters Singapore

Regulators in other jurisdictions have also been generally supportive. In Singapore, the Monetary Authority of Singapore (MAS) has not mandated open banking, but it has taken concrete steps to facilitate its development. Last year, the MAS published a consultation paper on proposed revisions to its Guidelines on Technology Risk Management and included a section on API development – an example of the balance it aims to strike between facilitating innovation and imposing risk management controls. Japan has also passed amendments to its Banking Act, requiring that banks make efforts to open up their APIs to electronic settlement agency service providers.

This is in line with Japan’s Financial Services Agency’s Financial Digitalization Strategy, which aims to encourage financial institutions to implement technology in their businesses.

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Benefits and potential concerns However, the development of open banking is not without concerns for traditional financial institutions, particularly regarding compliance with their existing legal and regulatory requirements. For example, the sharing of consumer data may conflict with banking secrecy obligations. Open banking may also pose issues from a data protection perspective.

Nevertheless, such concerns should not be a major barrier to the growth of open banking. For instance, a common statutory exception to banking secrecy requirements is for disclosure with the customer’s prior consent. In some cases, banking secrecy and data privacy laws may need to be modernised to permit data sharing and open banking. Solutions do also exist for the liability issue – one solution adopted in Australia and the UK is to directly regulate data recipients, which provides clarity around liability and compliance obligations and improves the security and stability of the ecosystem. It is crucial for regulators to gain a clear understanding of the benefits and risks of data sharing and to strike an appropriate balance between consumer protection and innovation.

It is also important to note that open banking has the potential to bring plenty of benefit such as the digital transformation of financial institutions, particularly in their legacy business strategies and operations. There will also be opportunities for new partnerships and collaborations between more traditional financial institutions and fintech companies who can bring different perspectives and technologies to the table.

Going forward Given the rapid rate of development in the technological sphere, financial institutions should recognise that an openness to innovation in their business is key to long-term survival in today’s financial industry. It is generally expected that open banking will continue to develop in the future, particularly in light of technological advances, changes in market demand and increasing growth of a younger, tech-savvy generation. Going forward, regulators can play a key role in the implementation of open banking in their jurisdictions. Issuance of legislation and guidelines can provide welcome clarity and guidance to financial institutions, as they navigate new technologies and the uncertainty around liability amidst ongoing requirements in key areas such as banking secrecy, data protection, technology risk management and cyber security.

OPINION

SANDEEP AGGARWAL

Impact of COVID-19 on Indian Banks

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he COVID crisis has resulted in an unprecedented disruption to the economic activity, and will lead to major changes in operations of most industries, including banks. Given below are some views on how banks will need to adjust to the new reality once situation stabilises and economic activity starts resuming normal operations. While this note has been made keeping India in mind, most conclusions will be valid for other emerging economies as well.

There are certain industries which will take longer to rebound – so banking exposures to these industries need to be carefully monitored – examples would be travel, tourism, hotels, airlines. There are other industries which will be affected less and would rebound faster, like pharmaceuticals, e-commerce, FMCG. Products: due to disruption in supply chains, most businesses are likely to see a much longer working capital cycle. As the economy is coming out of the crisis, there will be sufficient production capacity, but the availability of working capital could act as the lubricating oil or an impediment in that process. In the mediumterm, businesses are likely to keep a higher buffer of current assets like raw material and inventories. In general, businesses will keep more of their assets in liquid funds, even if that means some sacrifice in terms of return on assets. For all these reasons, banks are likely to see significant increase in demand for their working capital financing, cash “We may see a trend management, trade finance and towards bank branches being transaction banking products.

Larger corporates will like to downsized to smaller setups keep committed but undrawn with fewer employees.” credit lines from banks – to that extent, banks’ ALM will need to become more dynamic.

Since the focus in the short-term will be on stabilisation of existing operations and conservation of liquidity, there may not be much demand for term loans for capital expenditure.

However, term loans for refinancing and for core working capital requirement will continue to be in demand.

Small and Medium Enterprises are the backbone of Indian economy, and they are bearing the brunt of the current situation, on all SANDEEP AGGARWAL fronts – raw materials, supply chain, customers, Managing Director, employees, working capital. The Banks’ divisions Lastaki Advisors Pvt. Ltd.

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which deal with SME clients, will see a big spurt in demand for funds and other banking services, as these SMEs try to bring their businesses back towards normalcy.

There will likely be a pent-up demand for auto loans and other personal loans, which the banks will need to meet as the situation normalises.

Demand for commercial vehicles will increase only in the medium-term once the economic activity reaches the pre-Covid levels. Housing finance will remain subdued, since individuals would postpone purchase of real estate for some time. Due to fall in interest rates across the economy, there would be demand by borrowers (both individuals and businesses) to refinance their older, high-cost loans.

There will be many firms who will not be able to survive this crisis and will default on their obligations, and may even go bankrupt. This will be especially true for firms in industries which would be significantly impacted (few mentioned above) as also those which were highly leveraged.

Hence the restructuring and stressed assets divisions of the banks will have their hands full for a few years.

Deposits: post-Yes Bank episode, Indian banking system has been seeing a flight-toquality of deposits, whereby depositors are shifting funds out of smaller banks. This has been beneficial to all large banks – both government and private. This trend will continue.

Indian government and RBI will be pumping in substantial liquidity into the system, to enable availability of requisite credit to corporates and individuals. This will lead to a fall in interest rates, and the trend has already commenced.

Such fall in interest rates will have a significant impact on banks’ ALM, treasury activities, and most parts of the banking business. Globally, governments in USA and all large economies are on a similar path, so liquidity is unlikely to be a concern for quite some time.

Banks have been trying to push their retail customers towards online banking and other digital channels as much as possible, and rely less on branches. Covid crisis will give a push to these efforts – we may see a trend towards bank branches being downsized to smaller setups with fewer employees. Government banks will need to make their digital offerings more customerfriendly, and bring them in line with the private sector banks.

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Digital transformation for today’s challenging landscape

Our customers tell us that they need to use transformative digital strategies to remain relevant in today’s challenging financial landscape. Strategies that will allow them to improve operational control, reduce costs, build new revenue streams, mitigate risk and comply accurately with regulation.

To help you make the journey towards digital transformation, we provide a range of solutions for the transaction lifecycle. AI and Blockchain technologies are now embedded in all of our solutions, which are also available in a variety of deployment models.

Digital transformation. Reaching the summit just got a little easier.