Asian Banking & Finance (October-December 2021)

Issue No. 104 DISPLAY TO 31 DECEMBER 2021

THE 2021 ASIAN BANKING & FINANCE AWARDS RECOGNISED THE MOST EXCEPTIONAL BANKS ACROSS APAC Asian Banking & Finance

BANK RAYA ZONES IN ON INDONESIA’S GIG ECONOMY THE PHILIPPPINES’ FINANCIAL DIGITISATION AMBITIONS: BSP WHAT’S IN STORE FOR THE CRYPTO INDUSTRY WITH CHINA’S ANTAGONISM? WHY THE ISLAMIC BANKING SECTOR WILL BE THE BIGGEST WINNER POST-COVID

FROM THE EDITOR PUBLISHER & EDITOR-IN-CHIEF

Tim Charlton

PRINT PRODUCTION EDITOR

Jeline Acabo

COMMERCIAL EDITOR COPY EDITOR PRODUCTION TEAM

GRAPHIC ARTIST

ADVERTISING CONTACTS

ADMINISTRATION

Janine Ballesteros Tessa Distor Frances Jade Gagua Djan Magbanua Simon Engracial

Karisse Coderes karisse@charltonmediamail.com

Accounts Department accounts@charltonmediamail.com

ADVERTISING EDITORIAL

I

t’s our highly anticipated awards issue! Head over to page 36 where we celebrate the achievements of hundreds of banks across the region for their exceptional commercial banking, retail banking, and wholesale banking initiatives at the Asian Banking & Finance Awards 2021.

advertising@charltonmedia.com abf@charltonmedia.com

We chatted with Deputy Governor Mamerto Tangonan of Bangko Sentral ng Pilipinas on the goal of pushing up financial inclusion across the Philippines by hingeing on the launch of the national ID and QR payment system.

Jumio Asia’s Vice President Frederic Ho also weighs in on building successful Philippine digital banks and warns to get it right on the first try or fade under a bad reputation. Read the full interviews on pages 16 and 20.

We also highlight China’s antagonistic stance on cryptocurrency mining activities as it deals a massive blow to the global crypto mining industry. Islamic banks adhering to Shariah laws, ethics, and values are also gaining popularity amongst the Millennials and Gen Zs. Read the full stories at pages 24 and 26.

Read on and enjoy!

SINGAPORE Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533 +65 3158 1386 HONG KONG Charlton Media Group Hong Kong Ltd 19/F, Yat Chau Building, 262 Des Voeux Road Central Hong Kong. +852 3972 7166 www.charltonmedia.com

PRINTING Asia One Communications Group 13/F, Asia One Tower, 8 Fung Yip Street, Chai Wan, Hong Kong

Tim Charlton Asian Banking & Finance is a proud media partner and host of the following events and expos:

Can we help?

Editorial Enquiries If you have a story idea or just a press release please Email: abf@charltonmedia.com and our news editor will read it.

Media Partnerships please Email: abf@charltonmedia.com and put “partnership” on the subject line and it will forward to the right person.

Subscriptions Email: subscriptions@charltonmedia.com Asian Banking and Finance is published by Charlton Media Group.

All editorial is copyright and may not be reproduced without consent. Contributions are invited but copies of all work should be kept as Asian Banking and Finance can accept no responsibility for loss. We will however take the gains. *If you’re reading the small print you may be missing the big picture   

ERRATUM Asian Banking & Finance erred in the July-September 2021 issue on the Singapore Bank Rankings with the rankings and figures of the following banks: United Overseas Bank Limited (UOB), OverseaChinese Banking Corporation Limited (OCBC), Citibank Singapore Limited, and Standard Chartered.

For the full corrected Singapore Bank Rankings, visit the digital version at: https://issuu.com/charlton_media



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

ASIAN BANKING AND FINANCE | Q4 2021 1

CONTENTS

36

COVER STORY GET TO KNOW THE WINNERS OF THE ASIAN BANKING & FINANCE AWARDS 2021

INTERVIEW

RETAIL BANKING 08 Artificial intelligence and advanced analytics are key to open banking

VOX POP 10 What do SMEs expect from modern

16 PH’s financial digitisation ambitions: BSP

20 Building successful digital banks in

BRANCH WATCH 11 Citi opens new Busan office to expand securities services to the KSD

24

COUNTRY REPORT WHAT’S IN STORE FOR THE DECENTRALISED CRYPTO INDUSTRY WITH CHINA’S ANTAGONISM?

EVENT COVERAGE

12 Bank Raya zones in on gig economy

payments solutions in 2021?

16

INTERVIEW PH’S FINANCIAL DIGITISATION AMBITIONS: BSP

the Philippines

FINTECH WATCH

86 Mitigating risks and ensuring regulatory compliance through Nexis Diligence

88 How to combat fraud in a hybrid banking environment

90 How financial firms can take climate action beyond CSR campaigns

23 Currenxie for a better cross-border payment platform

28 Siam Commercial Bank’s restructuring highlights Thai banks’ need for complexity

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 | MARCH 2019 Singapore 069533

For the latest banking news from Asia visit the website

www.asianbankingandfinance.net

Visit crealogix.com | Visit crealogix.com |

Leveraging Leveraging financial financial ecosystems: ecosystems:

5 5 myths myths debunked debunked When it comes to leveraging financial ecosystems to maximise commercial When it comeswhat to leveraging financial ecosystems to maximise commercial opportunities, are the common myths and what is the reality? opportunities, what are the common myths and what is the reality?

1

MYTH MYTH “We don’t need an eco“We don’t needstrong an ecosystem – we're system – we're strong enough without it”

enough without it”

2

REALITY REALITY There are benefits from

There are benefits from ecosystems, including ecosystems, including increased customer increased new customer retention, forms of retention, new forms of revenue generation and revenuecosts generation and reduced reduced costs

MYTH MYTH “Ecosystems can slow

“Ecosystems can slow growth and innovation” growth and innovation”

33

MYTH MYTH “It’s too expensive to

“It’s too to foster andexpensive maintain an foster and maintain an ecosystem” ecosystem”

REALITY REALITY that transform Companies

REALITY REALITY Modern digital banking

Companies that transform into ecosystem-centric into ecosystem-centric businesses experience new

Modern digital banking engagement platforms engagement platforms allow you to create

businesses experience new sources of innovation that sources of innovation that drive growth

allow youwhere to create structures structures where ecosystems can grow and

drive growth

ecosystems can grow and prosper, with little technical prosper, with little technical effort effort

4 4

MYTH “We can’t cover MYTH everything ourselves “We can’t cover in one ecosystem” everything ourselves

in one ecosystem”

55

MYTH “We’re MYTH too small to make this successful” “We’re too small to make

this successful”

REALITY

REALITY

Yes, you can – working with REALITY partners.

You–don’t needwith to Yes, you can working

Open banking and open REALITY wealth are not just large Open banking andfor open

be strong You in every of partners. don’taspect need to service provision be strong in every aspect of

tier 1 banks networks wealth are–not just for large enable small – and mid-sized tier 1 banks networks

service provision

organisations provide enable small to and mid-sized aorganisations full range of relevant to provide

Take action now Take now about Talk toaction CREALOGIX Talk to CREALOGIX realising your digitalabout realisingfaster your digital roadmap and more successfully at roadmap faster and solutions@crealogix.com more successfully at solutions@crealogix.com

services a full range of relevant

services

At CREALOGIX, we work with banks and financial institutions every day to leverage At CREALOGIX, the value with of ecosystems, innovation every and personalise we work banks and accelerate financial institutions day to leverage customer We’re ready to innovation help address the key the value experience. of ecosystems, accelerate and personalise challenges for your digitalisation customer experience.

We’re readyproject. to help address the key

challenges for your digitalisation project.

ASIAN BANKING AND FINANCE | Q4 2021 3

News from asianbankingandfinance.net Daily news from Asia MOST READ

BANKING TECHNOLOGY

ISLAMIC BANKING

INFORMATION TECHNOLOGY

Why Malaysian banks are spending more on financial wellness apps

Expect more mergers amongst SEA, South Asian Islamic banks

Digitalisation creeps into Singapore banks’ non-tech roles

About 64% of Malaysian retail banking decision-makers said their company is increasing spending on digital and engagement financial wellness initiatives—the highest in APAC.

Expect more Islamic banks to consolidate in South, Southeast Asia, and those in countries that are part of the Gulf Cooperation Council as the sector seeks to improve revenue generation and cut costs, reports Moody’s.

As the year progresses, banks will likely only continue to go into a ‘reform and transform’ path, spurred by the granting of digital bank licenses, according to a study by Randstand Singapore.

RETAIL BANKING

CARDS & PAYMENTS

Security Bank CEO Sanjiv Vohra on future-proofing a bank

‘Buy now, pay later’ speaks to convenience for the unbanked

For the head of one of the Philippines’ oldest banks, the key to thriving in the future is not just in digitisation and realignment of long-term goals: it’s in offering a customer-centric banking journey.

The rise of BNPL in the Philippines not only speaks to its convenience but also to the population’s willingness to manage their budgets more optimally, according to Robocash Group chief executive officer Sergey Sedov.

4 ASIAN BANKING AND FINANCE | Q4 2021

MARKETS

China deems 19 banks ‘too big to fail’ The People’s Bank of China placed the D-SIBS in four buckets in order of their systemic importance. These 19 institutions account for over 60% of system banking assets as of June 2021, according to a report by Fitch Ratings.

ASIAN BANKING AND FINANCE | Q4 2021 5

THOUGHT LEADERSHIP ARTICLE

Meeting the challenges of SME Banking during the COVID-19 pandemic Understanding the needs of SMEs is key to a bank’s sustainability—and even success—during the current crisis. lack of engagement between the two.

According to a research study made by Strand: • 69% of SMEs see banks as a utility provider and only 8% view banks as a business partner • 43% of SMEs are considering switching to a challenger bank • 16% were open to exploring other providers, with more than two-thirds open to non-traditional lenders that can give them a faster loan approval process before the COVID-19 crisis happened

Karsten Kemna, Managing Director (APAC) at CREALOGIX

T

he COVID-19 pandemic has caused massive economic disruption that has severely tested the strength and resilience of many businesses. With global economies experiencing the biggest public health crisis in history, many businesses have been compelled to close down as lack of cash, decreases in sales, difficulties in loan installment payments, complications in bank financing and changes in consumer behaviour have proliferated.

The result has been weakened economic conditions that have challenged the banking industry and inflicted massive instability in financial systems.

If there’s one thing that SMEs have learned from this crisis, it’s the urgency to adopt digital strategies to manage and improve their sustainability. Yet this assertion in using technology and digital servicing has been anchored in place even before the pandemic.

A study made by Accenture revealed that technology—particularly software and services that enhance their website and digital marketing—has been the number one area of investment for SMEs before and during the COVID-19 pandemic. What’s interesting is that the percentage gap before and during the 6 ASIAN BANKING AND FINANCE | Q4 2021

pandemic isn’t significantly huge: Prior to COVID-19, 61% of SMEs have already been investing in technology—after the pandemic, the figure only increased to 64%.

However, what the crisis has done is magnify SMEs’ interest in expanding their businesses online. Prior to the pandemic, ASEAN SMEs ranked the need to continue digitalising as their fourth most important approach (49%) and the improvement in customer experience as their top priority (63%). The COVID-19 outbreak resulted in a significant priority shift, with SMEs across the region recalibrating their strategies to focus on digitalising as their top priority (60%), with improving customer experience dropping to third place (52%).

Repositioning future-ready SME banking services As SMEs focus on regaining a more secure foothold, banks should take this opportunity to act as a partner/enabler to help these businesses emerge stronger even during the pandemic.

An EY survey found 37% of SMEs wanted to increase the level of engagement with their banks. Despite this, traditional banks often regard SMEs as too costly or risky to serve, resulting in

The results show that banks need to improve their SME digital service offerings to remain competitive. To do this, they need to focus not only on the SMEs’ financial needs, but also their entire business process. Here are three

key areas they should consider:

of digital automation and efficiency.

Rethinking the strategy of going beyond 1. Enhance digital channels and tools banking, banks can equip SMEs with a in banks new level of SME digital banking that is The expectations of SME banking have more than providing valuable banking elevated and evolved through the services, enabling them to grow and pandemic, and banks need to be more succeed. creative in meeting their needs with a wider range of services via digital 3. Improve personalisation in banks channels, including access to credit, Consumers exposed to digital technology flexibility of loan repayments, and are aware of how technology can facilitating face-to-face meetings in a provide them with more personalised digital setting. experiences. According to Salesforce, SME banking services could offer 52% of customers expect financial the same type of SME platforms with institutions to always personalise offers, relevant data-driven insights and and 66% expect them to understand analytics. Banks will be able to predict their unique needs and expectations. when a capital injection is needed and Those days when personalisation was tailor appropriate loan offerings. limited to special offers and promos Banks have to leverage their digital have long gone. Now, it has expanded capabilities to support SMEs against to include the entire customer journey non-bank challengers and alternative itself—from purchasing to customer lending providers by building meaningful engagement, to transaction, buying relationships, increasing touchpoints frequency, and cross-selling, to product and making hybrid services such as loyalty and customer retention. video chats with relationship managers According to Strands, 40% of SMEs available. cite “lack of personalisation” as a reason to leave. When banks fail to provide 2. Offer holistic solutions: The them with the kind of personalised “Going Beyond Banking” Concept financial management services that Banks should also go beyond banking they want, the likelihood of turning by offering holistic solutions to improve to challengers and fintechs becomes e-commerce. Consulting firm Oliver greater.

Wyman lists the following suggestions: Creating a seamless and consistent • Improve e-commerce (growth and customer engagement experience via all sales) through different platforms channels enables banks to personalise like online sales and marketing, your service to end users, whilst making customer insights it easy for them to interact via the • Manage cash flow with enhanced channel of their choice. digital lending process, accounting Banks should consider adopting these forecast, automated alerts, and etc. ideas: • Create various payment transactions that include mobile, e-wallets, and other digital payments Mobile-first • Manage logistics through data Reaching key target capture, cross-logistics, and online groups, particularly the legal and shipping services younger generation, • Improve productivity by using with a focus on app Enterprise Resource Management development that aims (ERP) solutions, customer document to ensure a positive user and sales management software, experience and customer etc. centricity • Offer lending solutions like supplier and buyer financing, discounts, retailer cash advances, and more CREALOGIX provides a holistic, modular, digital platform—including all the necessary business logic—that enables banks to achieve new levels

Conversational banking Offering on-demand access to a relationship manager, enabling the delivery of personalised advice that builds trust and enhances relationships

UX/UI Simplifying the customer journey and making frequently used functions accessible via mobile devices, with more intuitive and less redundancy of steps to perform tasks to enhance satisfaction

Final Word The SME segment is growing strongly as a main driver of economic growth in the region. When left to fend for itself—compounded with dwindling capital during the pandemic—there is an increased likelihood that SMEs will feel the most impact, resulting in sudden closures or bankruptcy.

As there are many challengers, with non-bank and BigTech players disrupting the market, the only way that banks can stay competitive is to accelerate innovation and adopt digitisation strategies. This can be complemented by working with technology partners with scalable, agile solutions that allow faster time-to-market.

At CREALOGIX, we focus on enhancing personalised experience, accelerating innovation and leveraging ecosystems in developing our solution, steered by customer demand, market insights and digital trends. With our technology, we enable banks to grow their existing business and take advantage of upselling and cross-selling opportunities. You can learn more by visiting our website: https:// crealogix.com/en/solutions

As SMEs focus on regaining a more secure foothold, banks should act as a partner/enabler to help them emerge stronger during the pandemic ASIAN BANKING AND FINANCE | Q4 2021 7

RETAIL BANKING: THE BANK OF THE FUTURE

Artificial intelligence and advanced analytics are key to open banking

These accelerated innovations are essential for banks to move towards global transformation.

To foster continuous improvement beyond the first deployment, banks must augment homegrown AI models and talents

O

pen banking in markets such as Australia, Hong Kong, the Philippines, and Malaysia still has a kind of anxiety around it. However, with markets, such as Singapore, whose regulators show strong support as well as supportive players, it may as well be a matter of time, Irene Xu, director of banking practice for SAS Asia Pacific Global Industry Practice, observed.

“In this region (Asia Pacific), we can expect open banking as the next biggest disruptive force in the financial services industry not only due to the fast rise of the extensive digital economies but also that we have observed very strong support from many local regulators in this region, with the intention to bring more competitive and better financial products and services to the community,” Xu said.

Before the move to open 8 ASIAN BANKING AND FINANCE | Q4 2021

Open banking is the next biggest disruptive force in the financial services industry

banking, Xu stressed the importance of leveraging data and the use not only of artificial intelligence (AI) and machine learning (ML) but also advanced analytics (AA).

McKinsey partners, Renny Thomas and Violet Chung, believe that lenders will need to move towards an enterprise-wide road map for deploying AA and ML models that would also include plans to embed AI in business processes.

They stressed that to establish a robust AI-powered decision layer, banks will need to shift from attempting to develop specific use cases and point solutions to an enterprise-wide road map for deploying AA and ML models across entire business domains.

“In addition to strong collaboration between business teams and analytics talent, this

requires robust tools for model development, efficient processes (e.g., for re-using code across projects), and diffusion of knowledge (e.g., repositories) across teams. Beyond the at-scale development of decision models across domains, the road map should also include plans to embed AI in business-as-usual processes.

Often underestimated, this effort requires rewiring the business processes in which these AA/AI models will be embedded; making AI decisions ‘explainable’ to endusers, and a change-management plan that addresses employee mindset shifts and skills gaps,” they added.

Thomas and Chung said that to foster continuous improvement beyond the first deployment, banks also need to establish infrastructure (e.g., data measurement) and processes (e.g., periodic reviews of performance, risk management of AI models) for feedback loops to flourish. Additionally, banks will need to augment homegrown AI models and talents.

Four layers of AI banking To become AI-first, banks must invest in transforming capabilities across all four layers of the integrated capability stack: the engagement layer, the AIpowered decisioning layer, the core technology and data layer, and the operating model, Thomas and Chung explained.

The first layer will entail reimagining customer engagement as customers expect banks to be always present in their end-user journeys as well as know their context and needs no matter where they interact with the bank, and to enable a frictionless experience.

Second, building the AI-powered decision-making layer will enable delivering personalised messages and decisions to millions of users

RETAIL BANKING: THE BANK OF THE FUTURE longer required to submit paper documents or financial statements, leading to a significantly reduced turnaround time of two to three working days.

Platforms Crucial for A Bank’s Success

Irene Xu

Violet Chung Source: McKinsey & Co.

and thousands of employees, in near real-time across all platforms.

The third and fourth layers will strengthen the core technology and data infrastructure and transition to the platform operating model.

“Whilst most banks are transitioning their technology platforms and assets to become more modular and flexible, working teams within the bank continue to operate in functional silos under suboptimal collaboration models, which often lack alignment in terms of goals and priorities,” Thomas and Chung explained.

Innovation for SMEs Xu said that AI, ML, and deep learning help harness data for business decisions, address gaps, and have a deeper understanding of their customers. A particularly interesting area for her is in the small and medium enterprise (SME) businesses.

“Traditionally, I will say that small and medium enterprises see a lot more difficulties in terms of accessing finance, getting additional capital, and funding because they are often associated with higher risks, insufficient information, or lack of collateral. Based on what we have seen in the past, it can be as high as 50% of SMEs getting rejected when applying for loans. It’s a very unpleasant experience and the whole process can be lengthy

and laborious,” Xu said.

Banks in the early stages of adopting AI and automation have undergone a significant change and have now optimised the customer experience. Xu shared an example of the Mizuho Bank in Japan which launched a new service called Mizuho Smart Business Loans in 2019.

“Under this service, the bank has internal data, as well as external information to understand customer transactions, particularly on deposit information. From there, it helps them understand the company’s ability to repay the debt,” Xu explained.

Additionally, the bank also adopted application programming interfaces or API and automation processes so that SMEs are no

Renny Thomas

Banks’ global transformation Xu pointed out that API will certainly play a very critical element in the development of open banking.

“From that perspective, regulatory requirements are very much driven by the local regulators and vary from market to market. One of the key things that we are seeing is probably, very soon we will see much more standardised API regulations at the global level which will help players have much better access at a significantly lower cost,” Xu said.

Banks should leverage the adoption of data analytics, cloud computing as well as other real-time capabilities to provide services in real-time.

“Lastly, in the areas of security, privacy, and fraud detection, the main concerns are how data can be governed, how data privacy is secured whilst information is being shared amongst banks, and how third-party providers can guarantee protection just in case attackers try to take advantage. It’s certainly important for banks to look at the right infrastructure and capabilities to ensure they can identify thirdparty API model vulnerabilities, as well as using AI and machine learning to prevent and detect fraud quicker,” Xu concluded.

API will play a critical element in the development of open banking

ASIAN BANKING AND FINANCE | Q4 2021 9

VOX POP

What do SMEs expect from modern payments solutions in 2021?

DIGITAL PAYMENTS

Sandeep Malhotra Executive Vice President, Products & Innovation, Asia Pacific, Mastercard: As SMEs rushed to shore up their digital operations, they grappled with challenges: how to keep revenue coming in whilst minimising expenses and cutting complexity.

To keep revenue flowing, businesses should give consumers multiple payment options to ensure that their preferred payment method is, available—whether that’s a card, QR code or digital wallet. By maximising convenience and choice for consumers, businesses can more easily convert sales across omnichannels.

Finally, digital platforms need to do more than process payments—they must also plug into broader infrastructure that supports other aspects of a business’ operations.

Morgan Browne CEO, Enterpryze: We will not see a return to pre-COVID days when it comes to payments. Instead, we’ll witness consumers being specific with what kind of digital payment they prefer using.

This will influence or inspire SMEs to include various payment solutions to cater to their demographics’ evolving needs. We’ll see SMEs demanding better user interfaces, smoother support, and generally a better digital experience. SMEs also understand that, now more than ever, any payment solution must continually be accessed rain or shine by their consumers. Transaction and middleman fees will also be scrutinised by SMEs with a finer comb. Some SMEs do not see the need for credit cards and their high processing fees as even their consumers are used to paying with QR codes.

Sharon Lourdes, Xfers: “Payments is the act, by an end-customer, of paying for a good or service they have received from an SME. For us, in the industry, it is important to not lose sight of this primary role of payments. The impact of the global pandemic has driven consumer behaviour online, forcing many SMEs to confront the need to digitise or die. With fierce competition breaking out on the online turf, a seamless payment process is a deciding factor between a consumer reaching the check-out page, or leaving in frustration for a competitor. The survival of a business depends on their agility in integrating payment methods favoured by their consumers—from contactless QR-codes to in-all virtual card payments—and their ability to orchestrate and administer huge volumes of transactions seamlessly and safely.”

PRODUCT WATCH

ZA Bank debuts interest-free early payday product

H

ong Kong’s ZA Bank introduced an interest-free early payday product that allows customers to get their monthly payroll up to seven days in advance.

With Salary FastPass, users can receive their salary up to a week earlier than the original payday on a day of their choosing.

There are no interest fees charged within these seven days.

Some traditional payroll bank accounts still feature higher deposit rates or fee waivers, CEO of ZA Bank CEO Rockson Hsu noted. This observation pushed ZA Bank to create and launch Salary FastPass, which according to Hsu, is the first interestfree early payday product in Asia.

“With Salary FastPass, we seek to revitalise the traditional mindset of Hong Kong’s financial services sector and set the next trend,” Hsu said.

10 ASIAN BANKING AND FINANCE | Q4 2021

The repayment method will be via autodebit from the ZA Bank account.

After the initial seven day period, if users maintain a sufficient balance in their ZA Bank savings account for auto-debit, they would be able to enjoy early payday with no interest that month. But if a user does not have enough balance for auto-repayment on

the seventh day after every ZA Payday, interest will be incurred. As of 2021, the annualised percentage rate is 34.49% for a loan amount of HK$200,000.

To apply, users can simply complete the application for Salary FastPass in the ZA Bank app. They do not need to change their payroll bank account.

BRANCH WATCH: CITI

Citi opens new Busan office to expand securities services to the KSD

Employees are dedicated to providing custody services to the Korean Securities Depository.

C

iti has opened a new office at the Busan International Financial Center (BIFC) to support its expanding securities services operations.

The bank’s new space boasts of wood-accented walls and furniture contrasted with a burnished bronze medal and modern in-laid lights that give the space a sleek yet cozy feel.

The office also boasts a sprawling view of South Korea’s Busan.

Having been selected in December 2020 by the city itself, Citi is one of the first BIFC international tenants. The office will be staffed by employees dedicated to providing global custody services to the Korea Securities Depository (KSD) in performing global securities depository/settlement services with greater efficiency, the bank shared.“Korea is and has

Citi is committed to providing sustainable and superior custody service to KSD

always been a very important market for Citi and we are honoured to work with clients such as the KSD,” said ImSun Lee, Citi’s Korea head of custody and fund services.

“We continue to invest in our Securities Services operations both regionally and globally, and this office opening allows us to provide greater levels of client service in terms of our custody and fund services offering to our institutional client base,” Lee added.

Citi Country Officer for Korea Myung-Soon Yoo also shared that they are pleased to have opened a new office and reiterated that the bank is committed to providing sustainable and superior custody service to its clients such as the KSD. ASIAN BANKING AND FINANCE | Q4 2021 11

INTERVIEW: BANK AGRO

Bank Raya zones in on gig economy By 2025, the Indonesian neobank expects 74.81 million gig workers in the country.

B

ank BRI Agro has shed its roots as an agribusinessfocused finance platform and rebranded as Bank Raya, looking to take flight as a fully-fledged digitalonly bank in Indonesia. In particular, the bank focuses on the 46 million Indonesians who count themselves as part of the local gig economy. This number is expected to reach 74.81 million by 2025, and to expand to a market size of US$314b, the bank said.

Whilst many Indonesians held side jobs even before the pandemic, the gig economy truly flourished at the height of this global crisis as mass layoffs pushed workers to explore new avenues of income in jobs that are traditionally seen as side work, Bank Raya observed.

Plans are already in motion. In May, Bank Raya appointed Kaspar Situmorang, former division head of Digital Bank Development & Operations at Bank BRI, as its CEO to lead its transformation into a full-fledged digital bank.

Earlier, the bank also secured regulatory approval, clinching the license to operate as a digital lending platform.

Asian Banking & Finance chats with Situmorang to learn more about Bank Raya’s ambitions of becoming the biggest digital bank in Indonesia and why they have decided to focus on the gig economy.

Before becoming the CEO of Bank Raya, who is Kaspar Situmorang? Can you give a brief background of your experiences in fintech and digital bank development?

For the past few years, I have been assigned to specific fintech positions with banks. Since working with PT Bank Rakyat Indonesia (Persero) Tbk, I have served as the executive vice president of the Digital Center of Excellence for two years. After that, I moved to the role of executive vice president of Digital Banking Development and Operations, where I was in charge of the whole digitalisation of the BRI groups. Since 2019, I have also been fulfilling roles for BRI Venture Capital.

Back in 2018, I started building a new company by the name of BRI Venture Capital. We invested in around 10 fintech firms over a span of two years. One of which is by the name of Agia, which was established in 2018. I was also a part of the Board of Commissioners for the past two years, until April. As you can see I have worked in a wide range of fintech, banking, and, in particular, digital banking roles for the past four years.

One of the major tasks in store for you is to transform Bank Raya into a fully digital bank. Can you give us a rundown on how you plan to lead Bank Raya through this transformation?

We have to transform the cultures and also the digitals [of 12 ASIAN BANKING AND FINANCE | Q4 2021

Kaspar Situmorang, CEO, Bank Agro

46m Indonesians are part of the local gig economy. This number will reach 74.81m by 2025

the bank]. If you’re using the balanced scorecard models: flip the human capital, flip the business process, and then flip the customers, and then you will get the reflections in the form of a new kind of financial gain. By doing this, we accelerate the journey to becoming the best digital bank in Indonesia.

For the past few years, we have already been investing in Bank Raya. The bank is pretty much ready because we have implemented the application for digital lending, Penang, which is one of the first in Indonesia, back in 2019.

The way we plan to transform it is threefold. The first one is digital, the second part is to digitise. For the third one, we are doing a revamp of the bank as well. So on the digital side, we are trying to amplify the development of super apps within the organisation and also we are trying to simplify the business process to become fully digital, whether it’s for digital lending to micro-businesses, lending to retail customers, and even lending to the consumer side.

On the digitising part, that’s where we are streamlining all the business processes. For example, in loan originations until disbursement and repayment, we try to streamline the processes, so it becomes a new standard.

Here, we are also trying to avoid operational risks.

INTERVIEW: BANK AGRO can open up from their apps a Bank Raya savings account.

They can just scan their face, provide their digital ID signatures, and a savings account will be opened up in less than five minutes. These kinds of services should amplify the massive scale adoptions to our platforms.

Indonesia Gig Economy Workers

Source: Lee Kuwan Yew School of Public Policy)

Last but not least is the revamp itself. This is where we are working to transform the branch offices. I think you already know that branch offices in Southeast Asia have been shifting. We’ve also recognised this trend, and we are trying to revamp our branch offices into what we call “community branches.” So it’s more streamlined, more specific to an ecosystem, and we’ve got strategic partners also working together with us. By combining our partners from BRF venture capital, some of their fintech has already been invested in by us. Lots of them—Invest Tree, Payfast, Bukalapak—and we are partnering also with Grab.

What can Indonesians expect to see in the transformed Bank Raya?

We’re trying to create a distinguishing factor, a distinguishing characteristic of this bank, which is totally separate from BRI Holdings.

We figured out that there is a specific segment by the name of the gig economy or the informal sector of employment. Luckily, we got platforms providing gig work available in Indonesia like ride-hailing apps, e-commerce, agritech, edutech, healthtech, and also, entertainment tech. All these have been creating opportunities for those people who got laid off during the pandemic. For example, farmers are farming in the morning, then in the afternoon, they could become ride-hailing app drivers, for Gojek or Grab. Then in the evening, they work as resellers or merchants in e-commerce platforms or as shippers of e-commerce products.

So how do we serve them? Through B2B2C or business to business to consumer. We are a digital bank, we are providing our partners which is the platform itself, like ride-hailing e-commerce, and so on. We provide them with our application programming interface (API) to easily open a savings account, to do digital lending; with our open banking platform to do money transfer, opening of virtual accounts, amongst other services.

So far, through Penang, which is our digital lending app, we have already enabled APIs in this product, and we tap it into our partners’ platforms, for example, Payfast, an agent banking platform in Indonesia. So Payfast customers

The pinnacle of the digital transformation of BRI Group is Bank Raya becoming a fully digital bank

How does Bank Raya plan to become the digital finance hub for the local gig and service economy?

In 2018, we were the first bank to own an open API in Indonesia. Last year, its growth was 390%, and it is closing 55 trillion in fee base. It was 2019 when we started with digital lending by the name of Penang, which in turn taps into Bank Raya. We work together with Tokopedia and it was a massive success, as well. In 2020, we have digital savings.

It goes beyond that. We have also launched the super app in 2020 by the name of BRI BriMo, or BRI Mobile.

So at that time, we were thinking about, “How can we transform the industries?”

Everybody’s talking about digital this and that, but we cannot make BRI Holding a purely digital bank because it is too big. So the pinnacle of the digital transformation of BRI Group is Bank Raya becoming a digital bank. That is the storyline.

To be able to scale up, we have to choose a specific segment, as well, that we have already been monitoring under our radar for the past few years, which is Indonesia’s Gig Economy. No other bank in Indonesia has built digital infrastructures around the gig economy. Hopefully, for the next few years, Bank Raya will be the sole bank to build digital infrastructures around the gig economy of Indonesia.

Another goal of Bank Raya is to retire the dusty “banking the unbanked” maxim in emerging Asia.

What does this mean?

We try to reframe, reimagine, and reconfigure ourselves every year. For Bank Raya to be specific, we think that it is not our duty to bank the unbanked; or bank the millions of Indonesians who have not got a bank account yet. In that position, the duty of banking the unbanked is the duty of Bank BRI, the parent company.

For BRI Agro, we skimmed this goal down to become more tangible. There are still a lot of people in Indonesia, especially amongst banked people, who need access to financial services. We are talking about the people who got laid off in the last few years, especially during the pandemic. Luckily, the gig economy, as we know, the different tech platforms, all came together to form its economy in the past few years. This has created a new kind of opportunity for us. BRI Holdings does not have a specific focus on the gig economy, because they are very focused on the micro and ultra micro-segments.

In gig economy, the customers are very digital-savvy.

They are not just using social media just for the sake of entertainment now – they’ve been utilizing their smartphones to make money out of these platforms.

Hopefully, by the end of 2023, we would become the largest provider of financial digital infrastructure, for the 74 million gig economy workers in Indonesia.

ASIAN BANKING AND FINANCE | Q4 2021 13

THOUGHT LEADERSHIP ARTICLE

New technologies transform data validation and reconciliations in banking AI and Machine Learning (ML) technologies improve operational efficiency and decision making for middle and back office.

L-R: Robin Hasson, Senior Product Manager, Reconciliations, SmartStream ,Andreas Burner, Chief Innovation Officer, SmartStream, Vikram Gupta, Executive Director, Head of Technology, Data Science, Automation, Data Analytics and AI/ML, Standard Chartered Bank

T

he current global pandemic has not just driven banks and financial institutions to up their digital transformation, but it has also compelled them to face the greater demand for data and transaction lifecycle validation, which is spanning higher volumes in more complex areas.

As such, many have been maximising artificial intelligence (AI) and machine learning (ML) to enable financial institutions to take big strides in improving their operational efficiency and decision making.

The past years have also seen a significant increase in the use of data validation solutions in the region, especially as an accuracy check needed with the surge in digital payments processing.

Today, the dual challenge brought by the rapid change, as well as the increased volume and complexity, mean event lifecycle validation tools must evolve to take advantage of the AI and ML landscape.

In a recent interview with Asian Banking and Finance (ABF), Standard Chartered Bank’s Executive Director and Head of Technology - Data Science, Automation, Data Analytics & AI/ML Vikram Gupta shared the traditional data and transaction

14 ASIAN BANKING AND FINANCE | Q4 2021

controls and checkpoints that are adopted by financial services firms, as well as the drivers for the increased demand and dependency on AI and ML. “As a bank, we are really pushing the way we are managing our reference data systems, our sanction screening systems, our confirmation processes, settlements, balancing positions, so all these ecosystems where the data gets generated rigid digital footprint, those are areas which the banking is very much focused on,” he said.

Gupta has also observed that with new business models emerging in banking, customer expectations also change.

According to him, customers are now looking for 24/7 operations, personalised

services, and all digital.

“In addition, there are areas where we are putting a lot of focus, which are around single control frameworks to ensure we have the right level of oversight and transparency. Lastly, innovation is going to drive the future of businesses and technology advancements such as AI and ML. They are going to be the key differentiator for businesses to succeed in the future,” he said.

AI cuts performance time, human error Meanwhile, SmartStream Senior Product Manager - Reconciliations Robin Hasson pointed out that if stakeholders want to understand where the efficiencies and

SmartStream is conducting pilots to provide high-value AI business cases for the financial industry

opportunities lie, they have to consider today’s challenges in the industry, such as increased volumes, diversity of a wider range of data, which is also more complex.

“All of these challenges mean that the reconciliations tools themselves have had to evolve. And that’s certainly where we’ve invested heavily as a firm into AI and machine learning technologies,” Hasson said.

He also mentioned SmartStream’s latest AI observational learning capability called Affinity, a tool which learns from user interactions, as well as how to correlate and perform user interactions automatically, and mimicking those users automatically. Hasson noted that the efficient simulation reduces the time taken to perform matching types.

“So just by either a few clicks, or by learning from existing historical process data, Affinity is able to simulate that effect, really, very quickly. And that really reduces the time it will take to perform many of these new matching types, whether it’s complex or simple. It can do all of that,” he added.

At the same time, Hasson emphasised that using Affinity will give customers an improvement in accuracy and manage key man dependency, as it can identify patterns. With such capability, it can also manage volumes and complexities that otherwise would take a long time with manual task force.

“You could use your staff more effectively for more strategic or more risk management, risk-focused tasks, because we would expect you to complete the core reconciliations quicker. You will be able to manage breaks earlier and manage any kind of risk and exposure much earlier in the day. So that’s a high level, that’s where I see benefits,” Hasson said.

Gupta added that banks like Standard Chartered are interested in the adoption of AI and ML as they have big data everywhere.

“I mean, we are talking about millions of transactions, thousands of flows, and, and it becomes a natural fit for AI and ML, to drive future efficiencies and increased revenues. And our bank, we are applying AI to grow new areas of business, to tap customers, markets, to streamline our operations, to build efficiencies, and we are accelerating our digital transformation journey and automating our operations,”

SmartStream’s Affinity learns from user interactions and mimicking those users automatically

he said.

Accelerating digital transformation in banking To aid in this change, SmartStream’s Innovation Lab based in Vienna, Austria, has been conducting pilots to fast track and prove high-value AI business cases for the financial industry. SmartStream Chief Innovation Officer Andreas Burner said that to do this, they work with their largest customers and create a team where their customer provides the business know-how, and the data scenarios.

“Our target really is to allow quicker processes, better data enrichment and to help the financial services industry to improve their processes,” Burner said.

He added that the Innovation Lab was launched to address big business problems in the industry, an area where AI thrives.

“AI is a solution to have better control for the financial services industry, to reduce the costs and to really gain more efficiency,” Burner said.

However, he said that building a product and getting AI into production takes time as it has to work in many ways, be stable, and be sustainable. “SmartStream has done that for many years, so we know how to build that. But what is interesting is that with AI and ML technology, new things come in,” he pointed out.

Burner noted that there are instances where AI technology learns something in production that it is not meant to.

“In general, AI and ML technology is very robust. If people make mistakes, if you do things a thousand times, and one time you do it wrong, it would not mind. It would

learn from the other thousand times,” he said.

Hasson added that what is really important is to be able to integrate AI and ML technologies into the products as seamlessly as possible.

“When the users are seeing the information that comes from that as a prediction, it feels very natural. And as part of the workflow and the process flow, there’s no interruption, so it continues to be a standard cycle. But it makes use of these new capabilities, gets the enrichment, gets the predictions and the benefits of machine learning as part of the standard cycle,” he said.

Lessons in adopting AI and ML Burner also revealed that adopting AI and ML capabilities into their solutions enabled them to more easily identify business problems, find API capabilities, recruit the right experts, increase awareness of the fintech space, and start discussions on product development.

“So there are a lot of things that are changing at the moment. And I think it’s very interesting to see how users respond to that. And they see a lot of benefit, but they also see that they need a lot of confidence from the software and guidance from the software to allow that automation,” he said.

Gupta noted finally that infrastructure requirements for AI deep learning should also be addressed.

“It is very important to have the right suite of technology and tools, and the right governing process is going to be the biggest

Innovation is going to drive the future of businesses and technology advancements such as AI and ML. They are going to be the key differentiator for businesses to succeed in the future ASIAN BANKING AND FINANCE | Q4 2021 15

INTERVIEW: BANGKO SENTRAL NG PILIPINAS

PH’s financial digitisation ambitions: BSP

The launch of the national ID and QR payment system can push up financial inclusion.

T

he Philippines has less than two years to achieve its goals of getting 70% of Filipinos banked by 2023 and of having 50% of its financial transactions done digitally. But as of 2020, one in seven Filipinos remain unbanked, according to the Federal Reserve Bank of San Francisco. Despite the odds, the local regulator, Bangko Sentral ng Pilipinas (BSP), is optimistic that they will achieve their goal.

“It is indeed daunting, but not impossible. We are optimistic of achieving that coverage of financially included adults in the Philippines,” BSP Deputy Governor Mamerto Tangonan, one of the four deputy governours of the BSP and head of the Payments and Currency Management Sector, told Asian Banking & Finance.

Two things are driving Tangonan’s optimism: the launch of PhilSys national ID system, which thanks to a partnership with a local lender, Landbank of the Philippines, saw millions of new accounts added to their system; and the rollout of new services over the next months, including “QR Php to M,” a comprehensive QR payment system that should complement the increased uptake of digital financial services, driven by the pandemic.

Tangonan knows what he is talking about: he previously served as chief of the United States Agency for International Development (USAID), wherein he led the E-PESO project meant to find ways to boost digital payments in the Philippines. As deputy governor, Tangonan is also in charge of the InstaPay and PESONet clearing houses for digital fund transfers.

Asian Banking & Finance spoke to Tangonan to learn more about the state of digitalisation of financial services in the Philippines and BSP’s plans and goals in pushing for the country’s financial inclusion.

You have been given the daunting task of getting 70% of Filipinos banked by 2023. How do you plan to achieve this goal?

Many of our people who were not able to open transaction accounts were due to lack of documentation. So that is being addressed with our PhilSys’ national ID system, which BSP is very much actively supporting, not only in terms of producing the Phil ID cards but also in mandating our supervisor institutions to rely solely on the Phil ID. Meaning, the presentation of a Phil ID is enough to establish one’s identity.

We have also licensed digital banks, and some of the existing banks have also converted to digital banks. Even those that are not yet officially digital banks are offering the opening of accounts in digital, also deposit, withdrawal, and funds transfers.

16 ASIAN BANKING AND FINANCE | Q4 2021

Deputy Governor Mamerto Tangonan, Bangko Sentral ng Pilipinas

That will reach many of our population and will attract more people into opening their transaction accounts if they do not have one yet. The BSP also recently issued the open finance framework that would even accelerate the digitisation of financial services. The electronic money issuers collaborate with the fintech and other companies to deliver purpose-built digital payments applications and services to the people.

We are excited about all these. I think all these factors working together, we can achieve the 70% financial included target by 2023.

The goal of getting 70% of Filipinos banked and 50% of financial transactions done digitally by 2023 is daunting but not impossible

The Philippines also aims for 50% of all retail payment transactions done electronically by 2023. Does the Philippines have the digital infrastructure to support this objective?

Yes, we do—and it is being even strengthened and reinforced. First of all, you are right, we have a 50% target in the share of digital payments out of total payments transaction volume in the Philippines.

To address and achieve this goal, we have the digital payments transformation roadmap, where, amongst other things, we have identified large volume payments streams that are still being done predominantly through cash due to the absence of digital payments alternatives.

INTERVIEW: BANGKO SENTRAL NG PILIPINAS What are the biggest challenges in getting Filipinos to start using digital payments?

Digital payments, as the name connotes, relies on connectivity. Right now, our digital connectivity infrastructure is in the process of still improving. So, connectivity is one.

Working or collaborating with the industry is another.

We need to hear what works best for [the banks and financial institutions] and balance that with what the public needs. In that balancing act, the role of BSP there is very critical. For digital payments to succeed in a market, you need to adequately incentivise providers and also offer a very good value proposition to the consumers. It is BSP’s role to ask each side and avoid that which tends to dilute the reason for using the service, or tend to dilute the value proposition.

BSP wants to offer better alternative to cash in the form of digital payments

I will give an example. Let us talk about merchant payments. If you look at the 2018 data, the total retail payment transaction volume in the Philippines consists of 70% merchant payments: your payments go from groceries, restaurants, pharmacies, even sari-sari stores, and public markets. If we can offer a better alternative to our spending public, and a better alternative than cash in the form of digital payments, then that is already a large number of transactions being transitioned to digital.

We are not stopping there. We will be launching, next year, the interoperable digital bills payment system. What this enables is it will allow a customer of one bank or EMI to pay his or her billers, say their utility companies, credit card companies, and so on, even if their biller is with another bank. In effect, what we are doing is strengthening the interconnection of accounts in the Philippines.

What normally happens in a fund transfer is that the payor will initiate the transaction and push the payment to the payee. But with the request to pay service, we kind of reversed that to bring more convenience to the payor; so it is going to be the payee who’s going to initiate a somewhat a collection transaction, or a request to pay transaction, and then all the payor needs to do is just to authorise that.

Banks in the Philippines said that it may be difficult to achieve the target set by BSP in the given time frame of less than two years. What’s your opinion on this?

Yes, I heard that, too. I do not blame anybody for thinking that. My confidence stems from BSP’s journey and experience. When BSP launched the NRPS in 2015-2017, we had a target of onboarding 20% of transactions by 2020.

At the time, many did not believe that it is achievable. Here we are in 2021, and we are just about to release our report covering the full year 2020. I am very confident that the BSP and the payments industry and the Filipino people have achieved that target, which no one believed in 2017.

So, I hope you understand where my confidence is coming from.

The pandemic is bringing in additional adoption and stickiness to digital payments. That also helps, although, of course, no one likes [being in a] pandemic.

Under the PhilSys ID registration, Landbank now has close to 5 million digital account owners, mostly new account holders

What else has BSP done to encourage more Filipinos to adopt digital financial services?

For one, we are supporting the rollout of the PhilSys ID. Its registration process requires Filipino citizens to go physically to a registration site to have their biometrics captured. With this, we will work with banks, principally the Land Bank of the Philippines, to co-locate and put some staff in those registration sites. Since you have already given your data and information to the one capturing the ID, that same information can be used by the bank to open an account. Because of this, under the PhilSys ID registration, Landbank now has close to 5 million digital account owners, most of them new account owners.

Recently, the government has also transitioned the payout of their social security pensions and retirement benefits straight to the accounts of our retirees and then the beneficiary. If we can continue to work with other government financial institutions to do the same, the government can save money from digitalising these payouts.

Apart from all your partnership with Landbank, how is BSP working with other banks to drive digital transformation in the banking and payment sector?

The banks and the electronic money issuers are all

Bangko Sentral ng Pilipinas (Source: Patrick-Roque)

ASIAN BANKING AND FINANCE | Q4 2021 17

INTERVIEW: BANGKO SENTRAL NG PILIPINAS beneficiaries would have to open accounts. The last time I checked, the entities who participated in SAP2 opened around 9 million new accounts.

very supportive of the digital payments transformation roadmap, and we have been working closely together with them. We will see another milestone of that when the industry launches the QR PHP to M. We are also enhancing PesoNet payments by doing multiple batch settlements in a day. Right now, we only do one settlement in a day that is around four o’clock. PesoNet transactions that you perform with your bank, by their cut off, will be credited to your payee that same day, around six.

We are going to have another settlement batch to process another batch of settlement, around midday, so that people who make transactions earlier in the day can already see it completed by around lunch. Those that do it in the afternoon can complete it by early evening or late in the afternoon. This would encourage even more usage because the waiting time to credit the amount to the payee’s account gets shorter.

We are also looking at what we tentatively call the proxy identifier. Right now, when you transfer an account, you have to select the bank, and then you have to key in the account number. Sometimes people are not comfortable disclosing account numbers to other entities they are not familiar with. But with a proxy, we can just use our mobile numbers or in some countries even email addresses, in order to do this.

How has COVID-19 helped accelerate financial inclusion in the Philippines?

I would not be jumping up and down that we have a pandemic, but in terms of financial inclusion, it has helped.

Number one, because of the restricted mobility in various levels of community quarantine. Sometimes the only safe and possible option is digital payments. Safe, because you do not want to touch cash that may have the virus, and because it is the only way to pay anything because you cannot leave home. But with digital payment methods, you can buy food, you can even buy groceries, you can buy medicines, through online purchases and then pay digitally.

That resulted in an even larger number of people being encouraged to open accounts.

Also, when the government gave the SAP2 cash assistance to Filipinos. The distribution of those social grants was done by sending the ayuda (cash assistance) directly to the accounts of the beneficiaries. So the 18 ASIAN BANKING AND FINANCE | Q4 2021

BSP has also recently given out licenses for digital-only banks. What has been the reception of traditional banks to this development?

Well, I believe that each bank or financial institution would have its own strategies depending on its target market. It may threaten some, but those with solid strategies may or may not feel threatened at all.

Nevertheless, we would want to encourage all financial institutions for as long as it also serves their interests, their strategies, to use digital payments, and for them to encourage their customers to use this. We have larger public policy objectives, like, broader-based economic growth, and digital payments can drive the [gross domestic product] growth. It facilitates the buying and selling of goods and services, so you increase spending, and then you boost growth. You also enable newer business models to succeed, like the ride-hailing apps, or online stores—stores that could previously not afford to have a location in malls, but can now sell online. With digital payments, you can increase participation in the economy to a wider segment of the population.

Of course, digital payments bring about financial inclusion. Digital payment platforms now offer a sort of savings account, and then you can access credit, then you are even offered insurance to protect your family and yourself. With digital finance platforms, you can even now do investments. Some banks and EMIs are now offering investment for tickets as small as 5,000 pesos (around US$20). See how we can bring down the benefits to more people?

Digital payments can increase participation in the economy to a wider segment of the population

Both of the goals that we discussed in this interview end in two years. So what’s beyond 2023?

Beyond 2023, we would like to go beyond having 70% of financially included adults and bring the digital payments penetration journey closer to 100%, like where some advanced economies are at present. There are also other things that we are also working on. We are continuing work with CBDCs and cross-border real-time payments.

Digital payments bring about financial inclusion

ASIAN BANKING AND FINANCE | Q3 Q4 2021 19

INTERVIEW: PHILIPPINE DIGITAL FINANCE

Building successful digital banks in the Philippines

Get it right on the first try or fade under a bad reputation, warns Jumio Asia VP Frederic Ho.

T

he Philippines’ banking and finance industry has fully immersed itself in the digital race, a run fueled by the local regulator Bangko Sentral ng Pilipinas (BSP) recently handing out digital-only bank licenses.

Even earlier, the financial regulator outlined an ambitious target that aims for banks to have 50% of their transactions done via electronic media by as early as 2023.

With six new digital bank players to soon make their debut in the country, the digital battle is at its most intense.

Even the most trusted banks face having to start over from scratch in building up their digital channels.

“Building a digital channel is akin to creating a whole new brand. When we needed a particular service where business was conducted face-to-face, our heart leads us to a particular financial institution because of the trust we have in the brand,” Frederic Ho, Vice President of Jumio Asia, told Asian Banking & Finance in an exclusive interview. “Creating the equivalent branding capacity is important for the digital channel.

“Just one other point, I cannot emphasise more in terms of getting this right at the go. The moment a brand is launched digitally, the quality of the user experience at that moment will mark how the market receives the product over a longer period of time,” Ho said.

What is the current state of Philippine banks’ digital transformation initiatives?

An important factor in the Philippines’ digital economy is the mobile revolution. In 2020, the Philippines achieved up to 70% smartphone penetration. So the reach given by the digital channels has now, via a mobile device, overcome some of the problems and restrictions in the Philippines’ business landscapes. For example, the geographic nature of the Philippines itself—with the population spread over a large area—and the accessibility to a bank branch outside the city areas may not be that convenient.

These factors have been recognised by the regulators like Banko Sentral ng Pilipinas (BSP). The government is creating programs, legal frameworks, and initiatives to encourage the digitisation of banking services. It has led to a great level of activity in 2019-2020.

The traditional banks, themselves, are upgrading the market. We have this app that was launched just over a year ago by RCBC Bank. There’s Komo from EastWest Bank. Of course, there are the new licensed digital banks that have entered the market under the purview of BSP inviting digital-only banks like Tonik or Uno Bank. So we see that there is a lot of excitement to participate in this big growth area of digital banking in the Philippines.

20 ASIAN BANKING AND FINANCE | Q4 2021

Building a digital channel is akin to creating a whole new brand – Frederic Ho, Vice President of Jumio Asia

Creating the equivalent branding capacity as traditional channels is important for digital channels

What are the things that banks and traditional lenders are getting wrong when it comes to digitising their services?

I think that a lot of the planning and decisions for traditional micro-financing, lending businesses are trying to dominate the digital channel in a way that the culture and user experience is not the same as what we are used to in the past.

Of course, everyone speaks of speed, convenience, and all these have got to be efficient and transparent to the applicant, simply for the fact that there are so many choices today. The task then is to have them perform something simple, and also to cover as wide an identity document available in the market as possible. In the Philippines, for example, there are many official documents. The ability to process these, approve them in a quick simple way, has become an important part of designing the user experience, which ultimately leads to the success factors behind lending, remittance as they design their customer acquisition strategies.

Getting the whole design and the user experience correct will be critical in terms of how that product and that brand can secure their objectives, be it market share, brand status, user reviews, or maybe having a long-term strategy about where the product will scale to deliver that

INTERVIEW: PHILIPPINE DIGITAL FINANCE The goal is to have a huge digital market base where you can build a one-stopshop via a single app

scope of services.

What must financial institutions consider to ensure a successful rollout of their digital financial services?

Amongst the areas that I have mentioned is from a technology perspective: what can be done to provide the convenience and the ease of a user who expressed interest and wanted to open an account? I also briefly mentioned in terms of the market coverage, that if we provide the service to identify an individual then we must support the widest set of identity documents. So that will give the business that breadth of coverage.

Behind these considerations, ultimately, are many others, including security. In particular, how the technology can be robust enough to prevent impersonations over the internet. Because you can have a few cases where such incidents happen and it could damage the trust in the brand.

Unfortunately, when an applicant books over the internet, it may be easier for someone to try to fake an identity when they apply for an account. A fraudulent bank account has got commercial value in the deep web and dark web markets in a way that could be rented out to money launderers for a profit.

These technologies and security areas are to enforce some level of control such that individuals will trust that this brand, this bank, has put in necessary security functions. So they trust that a digital channel is a safe place to conduct my financial services, be it to deposit money or to remit money or even to take a loan.

There are also other considerations around data privacy. I would want to know of course, that when I perform a particular service—having a picture of my face as well as my identity documents—the products which I have expressed interest in, there must be some level of protection of this information that is not exposed to parties which have not provided consent. These are areas where you want to check on the service providers handling

this API data. What international standards do they comply with? For example, do they subject themselves to be audited under ISO standards, in particular, one of them will be like ISO 7001 specifying how private API data should be handled; other standards like the payment card industry, PCIDSS. All these somehow combine into what a bank or a fintech company would evaluate and then build the user experience into the service ultimately to acquire the client and subsequently to maintain this over the lifecycle of their business relationship with the company itself.

The Philippines recently awarded its digital bank licences to three entities, one of which is OFBank. How will the entrance of digital banks change the banking sector of the Philippines?

It is very interesting that prior to the announcement of the new entrants, even before 2020, digital onboarding has already proceeded in the market itself.

For instance, UnionBank in the Philippines has already launched digital onboarding services in 2020. There were announcements by the bank that when they rolled out a digital channel, they saw that very quickly, within four months of their digital business launching, the number of new accounts opened has exceeded the entire branch network of UnionBank. That gave a lot of encouragement to the industry. The market was ready to accept that a digital way of building a relationship with the bank was viable. Following that, CIMB Bank in the Philippines also rolled out its digital services, and in just over two years, they have signed up more than 4 million accounts.

So when you kind of consider how you would want to reach such objectives through a traditional branch network, and the momentum the new entrants have come into the market, you can say that the Philippines market already has a certain level of experience. The users are now comparing, they are going to be more selective than before. The sensitivity to ease of opening an account, to user experience, to inconveniences becomes more criticised.

What is your outlook for digital banks in the country?

I think what we see now, of course, is a legal framework that encourages digitalisation. Regulators are inviting big tech to participate in the Philippine market. In the payment space, the likes of GrabPay, for example, are already making huge waves in terms of the payment experience. In terms of infrastructure, in real-time remittances, the InstaPay and PesoNet really create the kind of framework for the greater promotion of the digitisation of financial transactions.

There are always discussions about building the super app, where, for example, the likes of RCBC has always highlighted that its app is a one-stop-shop where you can have access to a whole range of different services that you may need for your personal requirements.

Ultimately, the goal is to have a huge digital market base where you can build a one-stop-shop, where financial services across different requirements can be offered via that single app, that single brand. From that perspective, ASIAN BANKING AND FINANCE | Q4 2021 21

INTERVIEW: PHILIPPINE DIGITAL FINANCE

BSP calls for financial inclusion serving the underbanked or underserved markets

I see so much activity in the Philippine market in the coming year. Even with all the activities now, only a small percentage of the Philippine population of around 100 million is fully on-board digitally or has a digital bank account. The scope under which the BSP calls for financial inclusion—serving the underbanked or underserved markets—represents a huge area that is still being highly competed in by the current players in the market today.

We are always talking about what traditional banks should do to keep up with the new digital entrants.

What about digital banks? What must they consider, especially those entering the Philippines, to succeed and reach profitability?

The first issue, which was highlighted earlier, was the issue of geography. Once you have things on a mobile app, we have to overcome problems related to distance and accessibility to a bank branch, where they can then enrol themselves to have a bank account.

The other factor would be the banks themselves like not having the cost of maintaining a physical bank branch to be built across the whole country just to capture as much of the market share as possible. Now they want to do so via a digital channel. It represents a huge cost reduction in terms of acquiring new customers. So, when you can reduce your customer acquisition costs, then a lot more can be done in terms of benefits that can be returned to the client.

Ultimately, the participation in financial services—the endpoint of which is everyone having a bank account—is a big factor in terms of the market growth potential, where you have every person of age own a bank account.

The Philippine market is even more attractive now because the whole market’s addressable size has just multiplied. After all, now with technology, you have overcome certain challenges in the past that you could not really address.

So I would say that these are probably the key areas of benefits of going digital.

22 ASIAN BANKING AND FINANCE | Q4 2021

The mobile revolution was the big gateway for Philippine digital economy

How can banks in the Philippines—traditional, digital, and virtual—help increase the accessibility of their services, especially for the unbanked?

The mobile revolution itself was the big gateway. The smartphone has become even more powerful today and can perform the kind of transactions over the required network bandwidth, and this is the needed infrastructure to grow the Philippines’ digital economy. To the financial technology sector, and to the banks, having that level of stability and accessibility means that they will continue to focus on that channel.

Also, because of the current situations with COVID, having no face-to-face engagements is just hard. There is the question of how far this trend would persist. We are not quite sure, but what the outcome would be is that the formal experiences of banks’ business will become digital, regardless of what happens in the future. Because businesses are now really used to the lower cost of customer acquisition, a lot of focus would be delivering better products, better services digitally. There will be a lot of partnerships to redefine the services that they will offer so that they can compare and compete with their peers in the industry.

To build out the different user experiences beyond just onboarding, I just want to highlight one other area.

Beyond just the onboarding itself and complying with the right regulations, we are also looking at how to maintain financial stability: to continue to ensure that as digital activity achieves higher growth, the necessary risks are still managed, such as in terms of fraud or fraudulent channels.

The question of how this will be managed will give rise to a lot of interest in transactions that monitor these types of activities. For example, we have a bank account, and if there are strange transactions or money movements, there must be some ability to then detect and report these to BSP. So, there is another layer that provides a continued set of protection in the services, where you have an automated way of applying the rules around how this suspicious activity is reported and monitored, as well as how it is pulled out so that they can be easily reported back to the regulator.

The participation in financial services is a big factor for market growth potential, where you have every person of age owning a bank account

FINTECH WATCH: CURRENXIE

Currenxie for a better cross-border payment platform How these Goldman Sachs alumni turned a painful experience into a family business.

I

t was from a personal painful encounter with foreign exchange that ignited the first sparks in founder and chief executive officer Riccardo Capelvenere to start Currenxie, a Hong Kong-headquartered cross-border payments and business account services startup.

In an interview with Asian Banking & Finance, Riccardo recounted how his mother’s wine import business, now run by his sister, paid exorbitant sums over decades on crossborder transactions and FX when purchasing from suppliers in Italy and elsewhere. This became the sort of trigger that pushed Riccardo into a new business direction.

Banking on his experiences in quantitative and technology-driven trading, Riccardo, along with his wife Alison, founded Currenxie in 2014.

“Alison had the operational experience as a Chief Operating Officer and together we started building relationships with banking partners around the world, and acquiring payments licenses in different markets. At the same time we were developing our core technology, and by 2017 we had launched the Global Account,” Riccardo said.

And that very wine business? It became their first and longest standing client.

Laying the foundation Currenxie is a financial services company that helps modern businesses access global commerce, by providing them with a simple solution for making and managing their payments.

Essentially, it’s a modern take on the business current account, designed for today’s increasingly borderless world.

Currenxie offers its clients a single portal - the Global Account - that gives them their own virtual bank account details in every market they do business. They can receive and send fast, borderless bank payments, they have multicurrency digital wallets, and transact at very low costs.

“This is all handled on our cloud-based platform, which is an in-house core banking system for running our global network and accounts. We are fully vertically integrated, all of our technology has been developed internally,” Riccardo said.

But starting this business in 2014 wasn’t easy.

From day one, Currenxie had to painfully build its network. Riccardo said he and his wife spent the first few years flying all over the world, sometimes spending weeks away from home. Which was hard for them because they initially moved to Hong Kong back in 2013 to be closer with their family. They also drew on their experiences as former Goldman Sachs executives to create a solid business model.

“As we were one of the first fintech companies offering this kind of service in Hong Kong back in 2014, we had no benchmark. Communicating our value, and educating the

Currenxie’s founder and CEO, Riccardo Capelvenere

Educating the market about what we had to offer was a challenge

market about what we had to offer, was an initial challenge.

It still is, though there are other fintech companies now, and awareness is increasing. Our early clients all came through word of mouth, whereas now we have multiple channels,” Riccardo explained.

The groundwork that they did eventually paid off as they have built one of the largest virtual account networks in the B2B fintech space that spans more than 30 countries and over 18 currencies.

Recently, the company closed a Series A funding round, bagging close to US$10m ($77.89m) led by family office BF Belmont Limited Hong Kong.

Currenxie plans to use the fresh funds to build new products, acquire new licenses and authorisations as well as expand to new markets and invest in more talent. The company has raised around US$14m to date.

“We are currently seeking authorisation for our business in Ireland, which will support our European expansion. We are also looking closely at expanding in another key Asian market next year. We’re also launching some exciting new products very soon,” Riccardo added.

As of now, Riccardo isn’t worried about competition in the market, as the B2B payments market is predicted to exceed US$1.9t. He said the market can afford to support many industry players.

ASIAN BANKING AND FINANCE | Q4 2021 23

COUNTRY REPORT: CHINA AND CRYPTOCURRENCY

What’s in store for the decentralised crypto industry with China’s antagonism?

China’s stance on cryptocurrency mining may be concerning today, but it won’t affect the global industry in the long run, Broctagon Fintech Group CEO says.

C

hinese authorities seemed intent on razing the country’s cryptocurrency mining activities, recently adding the mining of bitcoin and other digital tokens to a proposed blacklist of industrial activities that they insist must be abandoned.

This is supposedly part of the country’s 2026 carbon neutrality push.

This stance deals a massive blow to the global crypto mining industry, where the Red Dragon is a leading market. At times, Chinabased mining operations reportedly controlled as much as 65% of Bitcoin’s global hash rate, according to data from the University of Cambridge’s Bitcoin Electricity Consumption Index.

Even before the blacklist suggestion, Chinese officials’ crackdown on crypto mining and trading, which first began in

May 2021, has already negatively impacted the local crypto industry.

“Crypto trading decreased alongside these crackdowns and the mining ban,” said Ulisse Dell’Orto, APAC Managing Director of blockchain platform Chainalysis. “Specifically, major exchanges halted derivatives trading. We hypothesise that much of this activity has migrated to [decentralised finance], but that hasn’t picked up enough that it makes up for the losses in the derivatives market yet.”

It is also negatively impacting the global cryptocurrency industry.

China is one of the industry’s biggest players, with addresses estimated to be controlled by users in the country, having received over $150m worth of cryptocurrency as of January 2021, second to the United States, according to a report

by Chainalysis.

China’s mining ban is negatively impacting local and global crypto industry

24 ASIAN BANKING AND FINANCE | Q4 2021

After China banned initial coin offerings, its antagonistic stance against cryptocurrency is no surprise

Its effect on the global space, however, is not expected to broach beyond the near term, said Don Guo, co-founder and CEO of Singapore’s Broctagon Fintech Group, a multi-asset liquidity and technology solutions provider. “[For] now the crackdown might seem concerning. But the reality is that it won’t affect the global cryptocurrency pricing and industry in the long run. The utility and ownership of bitcoin have become broader over time,” he said.

Noting that the country banned ICOs or initial coin offerings in the past, Guo is not surprised by China’s antagonistic stance against cryptocurrency. For years, China has signaled that it wanted to ban bitcoin.

But whilst the global crypto market may be assured that things would soon go back to normal, in China, the crypto mining and

COUNTRY REPORT: CHINA AND CRYPTOCURRENCY CBDCs and existing cryptocurrencies like Bitcoin and stablecoins can exist side by side

Don Guo, co-founder and CEO, Broctagon Fintech Group (Photo: Broctagon.com)

trading industry has no escape— with the ban expected to push 90% of mining in the country to go offline, Guo said.

Do not expect crypto trading and mining businesses to just fade quietly; they might just set up shop elsewhere, turning their sights from the Red Dragon to the Merlion.

“In Singapore, a conducive framework for the industry has definitely attracted many renowned international blockchain and crypto firms,” noted Yushio Liu, CEO of Coinhako, a Singaporebased cryptocurrency platform.

Apart from Singapore, many countries have yet to take a regulatory stance on the crypto industry, and these will be of interest to impacted businesses, Liu said.

Liu also argued that the ban in China may not be the final nail in the coffin for cryptocurrencies in the country. There is a chance that China could pivot towards ESGfriendly cryptocurrency mining instead.

The CBDC dilemma Around the same time that China began cracking down on global decentralised cryptocurrencies like Bitcoin, the country began the initial phases of rolling out its central bank digital currency (CBDC). CBDCs differ from cryptocurrencies, like Bitcoin, because they are designed to operate outside of the control of any one government or organisation, according to Chainalysis’ Dell’Orto.

So are they a rainbow or a dark cloud hanging on the crypto industry’s horizon? Neither, according to industry experts.

“In general, we do not see CBDCs challenging existing cryptocurrencies like Bitcoin and stablecoins. They can exist side by side and are not necessarily competitive,” Dell’Orto said.

Broctagon’s Guo agreed, saying: “CBDC and cryptocurrencies have different use cases and purposes. CBDCs are fiat currencies in digital form whilst cryptocurrencies are not legal tender in most countries.” The key features of cryptocurrencies are decentralisation and autonomy, the features that CBDCs lack, he added.

Both also have their own set of advantages: CBDCs in their tie to local currencies, and Bitcoin and other decentralised

cryptocurrencies in that they are not controlled by one single entity, according to Coinhako’s Liu. CBDCs will speed up crypto awareness CBDCs can then be used to transact using digital versions of their country’s fiat currency, with no need to do conversions or the possibility of misunderstanding the value of their wallet. On the other hand, as decentralised cryptocurrencies are not controlled by a government or one organisation, many people can treat it as a store of value and hedge against inflation, Coinhako’s Liu said.

In fact, the roll-out of CBDCs may even bring a positive impact to the cryptocurrency industry.

“One thing that is certain— CBDCs, being digital legal tender, will speed up the awareness of digital payments. This, in turn, can raise awareness of cryptocurrencies, since the general public will likely equivocate between the two,” Guo said, noting that cryptocurrency trading is currently still small as compared to other commodities and trade-able products.

“Introduction of CBDCs will push digital currency adoption into mainstream making it easier for citizens to transact.”

As for the future of CBDC roll-out, Coinhako’s Liu said that governments may opt to issue CBDCs directly to citizens with the assistance of AI over middlemen organisations like banks.

Introduction of CBDCs will push digital currency adoption into mainstream

ASIAN BANKING AND FINANCE | Q4 2021 25

SEGMENT REPORT: ISLAMIC BANKING

Why the Islamic banking sector will be the biggest winner post-COVID Banks adhering to Shariah laws, ethics, and values are gaining popularity amongst the Millennials and Gen Zs.

S

outheast Asia’s Islamic banking sector is poised to enjoy long-term growth prospects thanks to the young population’s rising demand for Shariah-based products, coupled with government support, analysts said.

Shariah-compliant banks are expected to overtake the growth and expansion of their conventional peers in the region, according to S&P Global Ratings, particularly in the post-COVID world when demand for Shariah-compliant financial services is expected to rise.

“In our view, Islamic banks benefit from government support, a large Muslim population in many countries in Southeast Asia (SEA), and strong demand for Shariah-compliant financial products. Additional benefits include increased standardisation of contracts and potential unification of the global legal and regulatory

framework for Islamic finance,” according to an S&P report by Geeta Chugh, Rujun Duan, Nikita Anand, Amit Pandey, and Ivan Tan. Bank Islam Malaysia Berhad’s CEO En Mohd Muazzam Mohamed shared the same view, although he noted that the pace of economic recovery remains uncertain.

“We expect the economic recovery to pick up from the second quarter of 2021 onwards, following improvement in external demand, higher public and private sector activities, and the latest economic indicators signal recovery is underway,” Mohd Muazzam told Asian Banking & Finance in an exclusive interview.

Shariah-compliant banks from these markets, particularly in Malaysia, have already showcased asset quality resilience and strong capitalisation even during the

Shariahcompliant banks will overtake the growth and expansion of their conventional peers

Shariah-compliant banks, particularly in Malaysia, have showcased asset quality resilience and strong capitalisation

26 ASIAN BANKING AND FINANCE | Q4 2021

pandemic. This will enable them to meet increased demand for financing as economies recover from the pandemic, said Moody’s Investors Service.

Mohd Muazzam also noted that Islamic banks have historically fared stronger than their conventional peers during dire times, most notably during the 2008 Global Financial Crisis.

Not without challenges “Although global Islamic banking assets record higher market share at 91.4% in 2019, due to increased exposure to the real economy, the industry is expected to record declined revenue, high pressure on earnings, and lower year-on-year growth in 2020 as the focus will be on preserving asset quality at the expense of business growth,” the Bank Islam’s chief said.

Amidst new waves of infection, Islamic bank growth rates are expected to moderate with asset quality stress persisting for longer, S&P noted. It forecasted that between 2020 to end-2021, the industry will show low- to midsingle-digit growth.

Instead of focusing on the possibility of muted growth, Mohd Muazzam shared that Bank Islam is looking ahead to how COVID could be a catalyst for change for Malaysia’s Islamic banking industry. “[We] see COVID-19 as an opportunity to move forward sustainably. Such a far-reaching impact of one single virus raises a simple question: is there a systematic error in how we operate, and what can be done to correct it?”

Catalyst Even without the pandemic, the current era is rife with drivers that will propel the Islamic banking industry to grow and improve, such as the advent of fintech, whether as a competitor or as a possible partner,

SEGMENT REPORT: ISLAMIC BANKING Mohd Muazzam said.

“The current environment provides opportunities for accelerating and unlocking the long term potential of the industry: more integrated and higher standardisation such as standardising Sukuk issuance ruling; stronger focus on the industry’s social role, such as in regards to [environment, social, and governance (ESG)],” he said.

In Malaysia, government support is also a key catalyst for growth.

The country is already noted as the leader in Islamic finance in South and Southeast Asia, and the officials are reportedly taking steps that will further strengthen its position, according to Moody’s.

Just this year, as part of a push for Islamic banks to adopt valuebased intermediation—an impactbased approach underpinned by Shariah principles—the Central Bank decided to expand guidelines for Islamic banks to incorporate ESG considerations in financing.

This is aimed at helping them avoid prematurely writing down or devaluing assets because of uncertainty surrounding

governments’ environmental policies and identifying new growth opportunities, such as those related to the renewable energy sector.

To encourage more uptake of Shariah-compliant financial services, Bank Islam’s CEO suggested that incentives be engineered to encourage the concept of ‘circular economy’ through waqf—an Islamic financial tool or concept that thrives on the act of philanthropy.

Islamic banks that fail to innovate digitally are going to be left behind

No-touch model Myles Bertrand, managing director APAC of cloud banking platform Mambu, told Asian Banking & Finance: “We’re seeing a lot of Islamic banks, as well as conventional banks that offer Shariah-compliant financial products, consciously moving towards digital offerings.

Nowadays, customers expect to be able to engage banks through a low-touch model, or without the need to visit a physical branch, Bertrand said, and this also holds for Islamic lenders.

“We believe that technological innovation in the Islamic banking

industry is going to drive huge growth in the sector as more and more people find that they are able to access Shariah-compliant services. Islamic banks that fail to innovate digitally are going to be left behind,” Bertrand said.

He added that this trend holds important implications for those segments of the population that are still technically “unbanked” or “underbanked.”

Demographic wins Perhaps the biggest driver of growth for Islamic banks in the future is that the population is on their side. “Prime-age populations, or people aged 25-54 years, are growing fast in Muslim-majority countries in South and Southeast Asia,” Moody’s analysts, Tengfu Li, Nitish Bhojnagarwala, Chong Jun (CJ) Wong said in a report. “Apart from cultural affinity, corresponding increases in smartphone ownership will also aid the expansion of Islamic banking, especially with the progressive rollout of electronic know-your-customer services that will facilitate remote verification of identification.”

What’s keeping young Muslims from fully embracing Islamic banking?

I

slamic finance services’ appeal has grown amongst young Muslim consumers, with more than half, or 53%, saying that they would adopt Islamic Banking if it were more accessible, reported the cloud banking platform, Mambu.

One in two of the 2,000 Millennials and Gen Z Muslim consumers surveyed globally would choose Islamic banking if barriers to entry were removed, according to the “Faith and finance: the changing face of Islamic banking” report. This reflects that consumers seek to make more sustainable and socially conscious choices post-pandemic, Mambu noted.

“Younger consumers are demanding financial change, and the Islamic finance market is no exception. Our research illustrates how Islamic banking trends mirror the demand we’re seeing for ethical banking practices more broadly,” said Elliott Limb, chief customer officer at Mambu.

There are over 1.9 billion Muslims underserved globally, which presents a huge opportunity for both Islamic and conventional

banks, alike, to provide compliant solutions for the modern consumer.

The Islamic finance market is rapidly growing in recent years, with total assets in the sector exceeding $2t and expected to reach $3.8t by 2023. But a lack of digital services could be a major barrier to service uptake amongst the next generation of consumers, Mambu warned.

Religious beliefs as a key factor Mambu’s study found that 74% of young

Muslims said they want banks to make investments that align with their religious beliefs. Three in four young Muslims (75%) also said they want to make investments that “do good in the world.”

Lending to tobacco companies is a big turn off, with almost two thirds (62%) indicating opposition to their bank lending to tobacco companies.

Almost seven in ten, or 69%, of the respondents, also said that they would rather their banks not lend to gambling institutions.

ASIAN BANKING AND FINANCE | Q4 2021 27

FINTECH WATCH: SCB ABACUS

Siam Commercial Bank’s restructuring highlights Thai banks’ need for complexity SCB’s launch of its new holding company reflects a trend for banks to become more complex financial firms.

SCB’s planned reorganisation is taking place amidst greater investment in fintech

E

xpect the next few years to play out like a survival game à la Netflix’s hit series, Squid Game, for Thailand’s traditional banks, highlighted by one of the country’s largest banks reorganising to become a more financial technology-focused firm, analysts said. This reflects the need for local banks to become more complex entities to keep up with the competition.

Siam Commercial Bank’s (SCB) planned reorganisation mirrors a wider trend amongst Thai banks that seek to become more complex financial groups in order to push up profits and retail competitiveness, Fitch Ratings said in a report.

On 22 September, the bank unveiled plans to set up a holding company, SCBX, that will own the group’s operating entities, including SCB. The group aims to complete the transaction by the second quarter of 2022 after securing necessary approvals. The new entity aims to become a regional financial technology conglomerate by 2025 and build a 200 million strong customer base.

Both Fitch Ratings and Moody’s Investors Service expect the 28 ASIAN BANKING AND FINANCE | Q4 2021

reorganisation to have little impact on SCB’s credit. However, Moody’s did warn of potential financial contagion from SCBX’s nonbanking businesses, although the risk is low, the ratings agency added.

Instead, Fitch sees the phenomena as part of a bigger trend of Thai banks being pushed to transform operations due to a challenging operating environment for traditional bank businesses.

Traditional banks in Thailand have long grappled with a prolonged long-growth and low-interest-rate environment that inhibits their growth opportunities. This has led to several transformative mergers and acquisitions in the local banking sector during the past two years, the ratings agency added.

“SCB’s planned reorganisation is taking place amidst greater investment in fintech via standalone subsidiaries and in partnership with key non-bank players,” the Fitch noted in a report.

Indeed, SCB specifically stated in its reorganisation announcement that it aims to become a regional financial technology group spanning a variety of financial

SCB must no longer limit itself to the traditional banking business

businesses and platforms.

“In 2025, the arrival of decentralised finance technology, the expansion and penetration of global platforms into the financial business, post-COVID 19 consumer behaviour, and dramatic changes to regulations will reshape business models, forcing banks into playing roles as intermediaries and making traditional banking fees less and less important. Such conventional roles will no longer satisfy the emerging needs and expectations of consumers,” said Siam Commercial Bank CEO and Chairman of the Executive Committee Arthid Nanthawithaya in the reorganisation announcement.

He added that in four years, consumers’ reliance on banks will wane, which will unavoidably harm the future value proposition for traditional banking investors.

“SCB must no longer limit itself to the traditional banking business, but rather take advantage of its financial strength to accelerate its aggressive expansion into other types of financial businesses that the market demands, build technological capabilities, and manage a large technology platform to keep pace with global players,” Nanthawithaya added, noting that it is crucial to quickly enter the “new arena of competition” in order to survive in the next three to five years.

For their part, Fitch welcomed the proposed restructuring, noting that it will likely improve the central bank’s ability to regulate SCB, as non-traditional and non-financial subsidiaries will be transferred to the holding company.

The ratings agency added that the SCB group’s new format may be replicated at other large financial institutions as their organisational structures become more complex.

O u r j ou r n e y of pro v id ing in n ov at i ve b a n k ing s o lut io ns t o V i e t n a me se c l ie nt s Throughout the years, UOB Vietnam has always been committed to providing innovative and convenient financial solutions and services to business and individual clients.

2021 - UOB HomeStar receives the New Consumer Lending Product of the Year – Vietnam award for the convenience and flexibility it gives the customers in managing their mortgage repayment. The loan interest is calculated based on the principal loan amount minus the deposit balance in the current account.

2019 - UOB BizMerchant received the Financial Inclusion Initiative of the Year – Vietnam award for its dedication in helping SMEs seize opportunities for long-term business growth.

The program is the first of its kind in Vietnam to provide loans to SMEs based on analytics of business data beyond financial records.

2018 - UOB Vietnam’s mobile account opening service received the Online Banking Initiative of the Year – Vietnam award for its efforts to create a frictionless digital experience that catered to the needs of Vietnam’s digitally-savvy population.

2021

www.uob.com.vn

Personal and Business Banking 1800 599921 (Local) +84 28 3898 9999 (Overseas)

Commercial Banking 1800 558880 (Local) +84 28 3933 1999 (Overseas)

ASIAN BANKING AND FINANCE | Q4 2021 29

RETAIL BANKING: CITI GLOBAL WEALTH

Citi outlines wealth goals including over $150b AUM across the APAC franchise

Fontainha expounds on Citi’s wealth goals, which include adding $150b AUM across the Asia Pacific franchise and hiring 2,300 more banking professionals in four years’ time.

I

n January, Citi announced the formation of Citi Global Wealth (CGW), combining its Private Bank and Consumer Wealth Business under one banner, under the leadership of its former global head of investor sales and relationship management, Jim O’Donnell. In Asia, the mantle of head was given to the former retail head, Fabio Fontainha, and private bank head, Steven Lo. With approximately US$300b in assets under management (AUM), Citi is already amongst the top three wealth managers in APAC — and Fontainha and Lo have been tasked with further driving Citi to maintain and even surpass its position as one of the top wealth managers in Asia (excluding Japan), which boasts of a $42t wealth market.

“Asia is an important source of growth to our firm. It is a source of enhanced returns for Citi; and an area where we see innovation happening at speed. We also believe that our global wealth strategy will benefit from a stronger position in Asia,” Fabio Fontainha, co-head of Citi Global Wealth in Asia Pacific, told the Asian Banking & Finance in an exclusive interview. “We can

invest here and take successful ideas to other parts of the firm to drive change and to support the transformation of our bank.”

Goals include adding over US$150b AUM across the APAC franchise by 2025. Hiring plans are also underway with hundreds of new professionals joining Citi APAC as part of its target to add 2,300 professionals in the bank, 1,100 of which are relationship managers and private bankers.

In his first major interview since taking on the co-head role, Fontainha shares his vision for the bank’s wealth business in Asia.

What are the aspirations of Citi Global Wealth in Asia?

“A favourable industry backdrop has set the stage for Citi’s doubling down on wealth management. Global wealth is growing at a rapid pace at over 5% over the past two decades, with Asia growing the fastest at 11% over the same period, driven by China.

“The opportunity is available across all segments, from affluent to ultra-high net worth. Given our presence across the wealth continuum, this plays to our

Fabio Fontainha, Co-head, Citi Global Wealth APAC

30 ASIAN BANKING AND FINANCE | Q4 2021

Global wealth is growing at a rapid pace at over 5% over the past two decades, with Asia growing the fastest at 11%

strengths in the region where we have a unique platform.

“We are privileged to have served our wealth management clients in Asia for decades. Our vision now is to further leverage Citi’s aspirational brand and CGW’s strategy is focused on delivering the firm’s global network, high-quality advisory and content, combining it with leading capital markets and product expertise.

“This new business integrates the Citi Private Bank and the Consumer Wealth organisation, including the International Personal Bank, into a single platform that will serve clients from the affluent level all the way through to ultra-high net worth individuals and Family Offices.

“Importantly, we are also coming at this wealth opportunity from a position of strength in the region — Citi is already a top three-wealth manager in Asia with over US$300b in client AUMs. “We have Wealth Management Hubs in Singapore and Hong Kong that will serve as important centres to grow further the wealth business across the region. The CGW hub strategy will be complemented by our leading digital capabilities. This is important as we think of our clients as individuals who have the ambition to access the best products and solutions and are increasingly agnostic to where that is delivered from.

“Citi is also the most global bank in the world — our bank has on the ground operations in close to 100 countries. This matters more than ever as this global perspective is increasingly a competitive advantage as we discuss wealth opportunities across the world with our clients.

The wealth conversation with Asian clients is increasingly global.

“We also have leading institutional businesses in the region — from FX, to hedging, to capital markets, and

RETAIL BANKING: CITI GLOBAL WEALTH Wealth in Asia, in the last 20 years, rose from $5.1t to $42t

In APAC, personal wealth is growing rapidly, the demographic dynamics remain favourable, including increasing levels of entrepreneurship

M&A opportunities. By bringing together the best of our institutional and retail capabilities under CGW, we are uniquely positioned to build a leading integrated Wealth Management business that will serve clients seamlessly along the wealth continuum. Through technology and a deliberate talent strategy, we aspire to introduce these solutions to our clients as they increase their wealth over time.”

How important is Asia in supporting Citi’s global wealth ambitions?

“We see a tremendous opportunity in Asia, specifically in China and across the broader region. Wealth in Asia, in the last 20 years, rose from $5.1t to $42t, excluding Japan.

But other changes are happening at the same time as all this personal wealth is created. We will observe, over the next several years, changes coming from decumulation needs, mass customisation algorithms, client-banker remote interaction technologies, portfolio customisation, and more.

“We all know that global wealth assets will continue to grow; emerging economies will grow faster than developed markets in the long-term; and that High Net Worth and Ultra High Net Worth segments will continue to expand dramatically around the region — and we want to purposely be a part of that journey.

We can grow with our clients; be able to provide them with all of the banking and wealth products and services they need along the way.

“In this region, personal wealth

continues to grow rapidly, the demographic dynamics remain favourable, including increasing levels of entrepreneurship. These factors, combined with several others are leading to an increased demand for wealth management services, which we expect to capture with our differentiated global offer.

What can Citi do differently in wealth, versus peers, given it is a crowded market?

“We are putting the full force of the firm behind this effort. It is all about integrating our platforms and resolve for the gaps we see. We want to create a single, integrated wealth platform that will serve all wealth management clients, providing tailored capabilities for affluent individuals to ultra-high net worth families.

“We have several components that differentiate us from our competitors, and these components put together with purpose can produce a differentiated offer that we expect to resonate with our client segments.

Our global footprint, extensive banking and lending services, worldclass capital markets expertise, digital capabilities, research and content capabilities, open architecture, talent base, and aspirational brand are a few of these components. We can offer it all under one distinctive value proposition.

“We have been very deliberate in combining our capabilities, making sure they make sense for each segment so every client can have access to the best available, in a relevant, meaningful way that supports their needs and distinguishes us from competitors.”

Could you expound about Citi’s hiring plans and targets for CGW? “By 2025, we are looking to add 2,300 professionals, including 1,100 relationship managers and private bankers, and invest in innovative technology to support growth – much of these will be across Hong Kong and Singapore. We have hired several hundred already in 2021 and new talent is increasingly attracted to our value proposition alongside our ambition.

“We are also looking to add in excess of US$150b AUM across the Asia Pacific franchise by 2025 and further extend our leadership position in the region.

“We have very specific objectives that ultimately will produce great solutions to help our clients grow and achieve their financial objectives.

We are building a plan with tangible milestones across technology, digitisation, simplification, and robust controls.

Global wealth assets will continue to grow; emerging economies will grow faster than developed markets in the long-term

ASIAN BANKING AND FINANCE | Q4 2021 31

CASE STUDY: BANK OF EAST ASIA

UnionPay QR code evolves traditional banking services from being delivered through branches to e-channels

BEA Hong Kong customers say bye to cards with QR ATM All they need are their phones to withdraw much-needed cash.

T

he next time cardholders of Bank of East Asia (BEA) in Hong Kong find themselves in need of cash, they no longer have to worry about bringing their card, thanks to the new UnionPay QR code cash withdrawal service.

Enabled in all 200 ATMs of BEA across the city, cardholders need only to bring themselves and their phones to access their funds.

To secure their accounts, BEA requires cardholders to present proof of their identity, and can do so through a plethora of customer authentication options: from presenting their biometrics to onetime passwords, and then scanning a QR code via their BEA mobile apps.

Account access is afforded extra protection thanks to the mobile banking access control. Basically, for customers to get their cash, they also need to log on to their mobile app accounts first.

Going cardless In an exclusive correspondence, a BEA spokesperson told Asian Banking & Finance that the 32 ASIAN BANKING AND FINANCE | Q4 2021

The QR withdrawal service is part of the BEA’s ‘Mobile First’ strategy

service not only reduces the risk of customers losing cards but also safeguards them from the threat of card skimming.

“We are seeing encouraging take up so far. We believe that the efficient transaction process and extensive ATM support network should drive further uptake,” a spokesperson from BEA told Asian Banking & Finance.

‘Mobile First’ The QR withdrawal service is part of the bank’s “Mobile First” strategy, the spokesperson said.

“Enabling UnionPay QR code cash withdrawal service will improve customer experience and usability, meet the growing demand for mobile banking and payment services and effectively evolve traditional banking services from being delivered through branches to e-channels.”

Apart from contactless withdrawals, BEA customers are also given a variety of withdrawal options that will allow them to save time and avoid physical contact amidst an era of ongoing coronavirus infections. For example, the BEA representative said that cardholders can now pre-set withdrawal instructions in advance. This reduces the transaction processing time when compared to traditional ATM card withdrawals.

The pre-set withdrawal instructions are secured by various customer authentications such as mobile soft tokens, biometrics and OTPs, the bank added.

The future is cardless BEA also now uses ATMs with fewer touches, catering to customers who would prefer to minimise physical contact with public equipment these days.

Plans are already underway to expand the service beyond Hong Kong.

“Apart from local withdrawal, UPI plans to extend the new cardless service to Macau and Mainland China in the near future.

We look forward to becoming one of the pilot banks to offer the service,” the spokesperson said.

PERSONAL LOAN CONSUMER DURABLE LOAN

TWO WHEELER LOAN CREDIT CARD TERM DEPOSIT

CERTIFICATE OF DEPOSIT

www.fecredit.com.vn www.facebook.com/FECREDIT.VN/ ASIAN BANKING AND FINANCE | Q4 2021 33

RANKINGS: SINGAPORE BANKS 2021 RANKING

BANK

Number of Employees 2021

Number of Employees 2020

2020 RANKING

CEO OR COUNTRY HEAD

1

DBS BANK

12,000

OVER 12,000

1

Shee Tse Koon

2

OVERSEA-CHINESE BANKING CORP

10,032**

10,032

5

Helen Wong

3

STANDARD CHARTERED BANK

ABOUT 10,000

9,000

3

Patrick Lee

4

UNITED OVERSEAS BANK

MORE THAN 9,000

MORE THAN 9,000

2

Wee Ee Cheong

5

CITI SINGAPORE

AROUND 8,500

8,500

4

Amol Gupte

6

HONG KONG AND SHANGHAI BANKING CORPORATION

3,300

AROUND 3,550

6

Wong Kee Joo

7

BNP PARIBAS

2,200

-

-

Joris Dierckx

8

MAYBANK SINGAPORE

2,000

2,000

8

Dr. John Lee

9

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

1,237

1,220

10

Jean-Pierre Michalowski

10

CIMB BANK

1,055

1,300

9

Victor Lee

11

BANK OF CHINA

955**

955

11

Cheng Jun*

12

MIZUHO BANK

>700**

>700

13

Guan Yeow Kwang*

13

RHB SINGAPORE

639

737

12

Danny Quah

14

STATE BANK OF INDIA

124

140

14

Kishore Kumar Poludasu

15

ICICI BANK

90

110

15

Anupam Verma

16

BANK OF INDIA

77**

77

16

Geetha Nagarajan*

17

UCO BANK

42**

42

17

Rajeev Gupta*

TOTAL

61,951

62,363

* Info obtained from MAS website ** Info retained from 2020 rankings

34 ASIAN BANKING AND FINANCE | Q4 2021

RANKINGS: HONG KONG BANKS 2021 RANKING

BANK

Number of Employees 2021

Number of Employees 2020

2020 RANKING

CEO OR COUNTRY HEAD

1

HONG KONG AND SHANGHAI BANKING CORPORATION

29,000

31,000*

1

Diana Cesar

2

BANK OF CHINA (HONG KONG)

12,557

12,592

2

Sun Yu

3

HANG SENG BANK, Limited

7,881

8,515

3

Louisa Cheang

4

STANDARD CHARTERED BANK

6,000

6,500

4

Mary Huen

5

THE BANK OF EAST ASIA, Limited

5,576

5,564

5

Adrian Li Man-kiu and Brian Li Man-bun

6

CITI HONG KONG

4,300

4,200

6

Angel Ng

7

DBS BANK (HONG KONG) Limited

4,000

4,000

7

Sebastian Paredes

8

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA)

3,097

3,187*

8

Wu Long

9

DAH SING BANK

3,079

3,097

9

Hon-Hing Wong (Derek Wong)

10

CHINA CONSTRUCTION BANK (ASIA) CORPORATION

2,500*

2,500*

10

Jun Zhang

11

OCBC WING HANG BANK

2,104*

2,104

11

Wu Beng Na

12

CHINA CITIC BANK INTERNATIONAL

2,000

2,000

12

Bi Mingqiang

13

SHANGHAI COMMERCIAL BANK

1,896

1,633

13

David Sek-chi Kwok

14

CHONG HING BANK

1,758

1,800

14

Jianxin Zong

15

CMB WING LUNG BANK (renamed from Wing Lung Bank)

1,751

1,763

15

Hong Bo

16

PUBLIC BANK

1,362

564*

16

Tan Yoke Kong

17

CHIYU BANKING CORPORATION

620*

620*

17

Zheng Wei

18

TAI SANG BANK

30

33

18

Cheung Yau Shing

TOTAL

89,511

91,672

*figures retained from previous year’s rankings

ASIAN BANKING AND FINANCE | Q4 2021 35

EVENT: ASIAN BANKING & FINANCE AWARDS

Get to know the winners of the Asian Banking & Finance Awards 2021

W

ith the past year providing lots of uncertainties in the financial services sector, banks face intense pressure to continue assisting their clients and help organisations grow their businesses and manage risks amidst the challenging environment. With the ever-changing customer preferences and increased comfort with digital products and services, financial institutions who were able to adapt and leverage digital technology are able to provide to customers and benchmark themselves against market competition.

In recognition of companies that continuously strive to grow and provide services to customers, the 2021 Wholesale Banking Awards, Retail Banking Awards, and Corporate and Investment Banking Awards recognised over 180 exceptional banks across the Asia Pacific.

The awards were handed via digital presentations to the winners due to the pandemic. Winning companies were also interviewed from today, July 29 to August 31 to share their thoughts on winning the most prestigious banking awards in Asia. This year’s winners were judged based on the companies’

Wholesale Banking Awards 2021 Abu Dhabi Commercial Bank UAE Domestic Trade Finance Bank of the Year Alliance Bank Malaysia Berhad Malaysia Domestic Initiative of the Year Malaysia Domestic Trade Finance Bank of the Year Bangkok Bank Public Company Limited Thailand Domestic Trade Finance Bank of the Year PT Bank Central Asia Tbk Domestic API Project of the Year - Indonesia Bank Nizwa SAOG Oman Domestic Foreign Exchange Bank of the Year Bank of Ayudhya PCL (Krungsri) Thailand Domestic Technology and Operations Bank of the Year Thailand Domestic Initiative of the Year Bank of China (Hong Kong) Hong Kong Domestic RMB Internationalisation Initiative of the Year Hong Kong Domestic Trade Finance Bank of the Year Hong Kong Domestic Cash Management Bank of the Year

achievements, solutions to the challenge experienced in the past year, project effectiveness, and client impact.

The nominations were judged by a panel consisting of John Dovaston, Asia Pacific Financial Services Leader at PwC; Nam Soon Liew, Regional Managing Partner, ASEAN at EY; Kok-Yong Ho, Leader, Financial Services Industry, Southeast Asia & Singapore at Deloitte; and Anton Ruddenklau Partner, Head of Financial Services Advisory Global Co-Leader, Fintech at KPMG International.

“Financial institutions that didn’t back down from the challenge and have adapted amidst the crisis have proved to be on the top of the industry.

Asian Banking & Finance awards aim to recognise these exceptional firms and challenge them to provide top-tier products and services to their clients as we continue to move forward into the new normal, “ said Tim Charlton, publisher of Asian Banking & Finance magazine.

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

Commercial Bank of Ceylon PLC Sri Lanka Domestic Trade Finance Bank of the Year CTBC Bank Taiwan Domestic Foreign Exchange Bank of the Year Taiwan Domestic Project Finance Bank of the Year DBS Bank Taiwan Taiwan International Initiative of the Year Taiwan International Cash Management Bank of the Year DBS Bank Singapore Domestic Project Finance Bank of the Year Singapore Domestic Technology and Operations Bank of the Year DBS Bank India India International Cash Management Bank of the Year Habib Bank Limited Pakistan Domestic Cash Management Bank of the Year Pakistan Domestic Project Finance Bank of the Year Hang Seng Bank Hong Kong Domestic AI Initiative of the Year Hong Kong Domestic COVID Management Initiative of the Year

Bank of the Philippine Islands Philippines Domestic Trade Finance Bank of the Year Philippines Domestic Cash Management Bank of the Year

HSBC Bank (China) Company Limited China International Cash Management Bank of the Year

Bank SinoPac Taiwan Domestic Remittance Initiative of the Year

The Hong Kong and Shanghai Banking Corporation Limited Hong Kong International Cash Management Bank of the Year

Barclays Bank PLC UAE Branch UAE International Cash Management Bank of the Year

The Hong Kong and Shanghai Banking Corporation Limited (Thailand Branch) Thailand International Cash Management Bank of the Year

Cathay United Bank Taiwan Domestic Cash Management Bank of the Year Taiwan Domestic Trade Finance 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 COVID Management Initiative of the Year 36 ASIAN BANKING AND FINANCE | Q4 2021

HSBC Bank (Vietnam) Limited Vietnam International COVID Management Initiative of the Year Vietnam International Trade Finance Bank of the Year ICICI Bank India Domestic COVID Management Initiative of the Year India Domestic Foreign Exchange Bank of the Year India Domestic Liquidity Management Initiative of the Year India Domestic Trade Finance Bank of the Year

21 Indusind Bank Ltd India Domestic Cash Management Bank of the Year

Taishin International Bank Taiwan Domestic M&A Initiative of the Year

KASIKORNBANK Thailand Domestic Cash Management Bank of the Year Thailand Domestic COVID Management Initiative of the Year

Turk Ekonomi Bankasi A.S. Turkey Domestic Cash Management Bank of the Year

Kotak Mahindra India Domestic Digital Onboarding Initiative of the Year

United Arab Bank UAE Domestic Technology and Operations Bank of the Year

LaoVietBank Laos Domestic Initiative of the Year

United Overseas Bank (Malaysia) Berhad Malaysia International Trade Finance Bank of the Year Malaysia International Initiative of the Year

Maybank Investment Bank Malaysia Domestic COVID Management Initiative of the Year

UOB Brunei International Project Finance Bank of the Year

Maybank Investment Bank Berhad Malaysia Domestic Project Finance Bank of the Year

UOB Singapore Domestic Initiative of the Year

Meghna Bank Ltd. Bangladesh Domestic Initiative of the Year

YES BANK India Domestic Transaction Banking Initiative of the Year

National Development Bank Sri Lanka Domestic Project Finance Bank of the Year Sri Lanka Domestic Cash Management Bank of the Year

Retail Banking Awards 2021

Nabil Bank Nepal Domestic Technology and Operations Bank of the Year Nepal SBI Bank Nepal Domestic COVID Management Initiative of the Year Nepal Domestic Initiative of the Year OCBC Bank (Malaysia) Berhad Malaysia International Cash Management Bank of the Year Malaysia International Project Finance Bank of the Year OCBC NISP Indonesia Domestic Cash Management Bank of the Year Prime Bank Bangladesh Domestic Cash Management Bank of the Year Bank Mandiri Indonesia Domestic Trade Finance Bank of the Year RCBC Philippines Domestic COVID Management Initiative of the Year RHB Banking Group Malaysia Domestic Foreign Exchange Bank of the Year Sacombank Vietnam Domestic Technology and Operations Bank of the Year Vietnam Domestic Trade Finance Bank of the Year

ABA Bank Domestic Retail Bank of the Year - Cambodia Affin Bank Berhad Initiative of the Year - Malaysia Start-up Banking Initiative of the Year - Malaysia Millennial product Initiative of the Year - Malaysia Ahli Bank S.A.O.G. Domestic Retail Bank of the Year - Oman Al Rajhi Bank Digital Banking Initiative of the Year - Saudi Arabia Mobile Banking & Payment Initiative of the Year - Saudi Arabia Albaraka Islamic Bank Marketing & Brand Initiative of the Year - Bahrain Alliance Bank Malaysia Berhad Financial Inclusion Initiative of the Year - Malaysia Mobile Banking & Payment Initiative of the Year - Malaysia Service Innovation of the Year - Malaysia AmBank Group SME Bank of the Year - Malaysia Ardshinbank CJSC Domestic Retail Bank of the Year - Armenia Aspire Fintech Startup of the Year - Singapore

Saigon-Hanoi Commercial Joint Stock Bank Vietnam Domestic COVID Management Initiative of the Year

Asakabank Domestic Retail Bank of the Year - Uzbekistan

Standard Chartered Bank UAE International Trade Finance Bank of the Year

au Jibun Bank Corporation Wealth Management Platform of the Year - Japan

Standard Chartered Bank Singapore International Initiative of the Year Singapore International Technology & Operations Bank of the Year Singapore International Cash Management Bank of the Year

AU Small Finance Bank Digital Banking Initiative of the Year - India

Standard Chartered Bank (Vietnam) Limited Vietnam International Cash Management Bank of the Year Vietnam International Initiative of the Year

Baiduri Bank Domestic Retail Bank of the Year - Brunei Marketing & Brand Initiative of the Year - Brunei

State Bank of India, Australia Australia International Initiative of the Year

BIDV SME Bank of the Year - Vietnam

Axis Bank Limited Financial Inclusion Initiative of the Year - India

ASIAN BANKING AND FINANCE | Q4 2021 37

EVENT: ASIAN BANKING & FINANCE AWARDS Bank of Ayudhya Public Co. Ltd. Marketing & Brand Initiative of the Year - Thailand Financial Inclusion Initiative of the Year - Thailand

HKT Flexi Limited New Consumer Lending Product of the Year - Hong Kong Consumer Finance Product of the Year - Hong Kong

Bank of China (Hong Kong) Limited Mobile Banking & Payment Initiative of the Year - Hong Kong

HNB FINANCE PLC Marketing & Brand Initiative of the Year - Sri Lanka

The Bank of East Asia, Limited Domestic Retail Bank of the Year - Hong Kong Initiative of the Year - Hong Kong

Hong Leong Finance Limited ASEAN Finance Company of the Year

Bank SinoPac Mobile Banking & Payment Initiative of the Year - Taiwan Open Banking Initiative of the Year - Taiwan Branch Innovation of the Year - Bronze Banque Misr COVID Management Initiative of the Year - Egypt Digital Wallet Initiative of the Year - Egypt BDO Foundation COVID Management Initiative of the Year - Philippines BDO Private Bank Wealth Management Platform of the Year - Philippines BDO Unibank Marketing & Brand Initiative of the Year - Philippines Cebuana Lhuillier Rural Bank, Inc. Rural/Cooperative Bank of the Year - Philippines Chang Hwa Commercial Bank Ltd Banking for Women Initiative of the Year - Taiwan CIMB Bank Berhad, Singapore branch Website of the Year - Singapore Consumer Finance Product of the Year - Singapore CIMB Philippines Virtual Bank of the Year - Philippines Strategic Partnership of the Year - Philippines CIMB Thai Bank Public Company Limited Digital Banking Initiative of the Year - Thailand Wealth Management Platform of the Year - Thailand Commercial Bank of Ceylon PLC Digital Banking Initiative of the Year - Sri Lanka Commercial Bank of Dubai Domestic Retail Bank of the Year - UAE Consumer Finance Product of the Year - UAE PT Bank DBS Indonesia Service Innovation of the Year - Indonesia DBS Bank Digital Banking Initiative of the Year - Singapore Mobile Banking & Payment Initiative of the Year - Singapore COVID Management Initiative of the Year - Singapore DBS Bank Taiwan Credit Card Initiative of the Year - Taiwan Digital Banking Initiative of the Year - Taiwan Employer Award of the Year - Gold HBL Mobile Banking & Payment Initiative of the Year - Pakistan HDBank Mid-sized Domestic Retail Bank of the Year - Vietnam Digital Banking Transformation of the Year - Vietnam 38 ASIAN BANKING AND FINANCE | Q4 2021

HSBC Debit Card Initiative of the Year - Hong Kong HSBC Amanah Malaysia Berhad Credit Card Initiative of the Year - Malaysia HSBC Bank (China) Company Limited International Retail Bank of the Year - China Wealth Management Platform of the Year - China HSBC Bank (Singapore) Limited Credit Card Initiative of the Year - Singapore Wealth Management Platform of the Year - Singapore HSBC Bank (Vietnam) Ltd Marketing & Brand Initiative of the Year - Vietnam HSBC India Corporate Social Responsibility & Green Program of the Year - Gold HSBC Philippines International Retail Bank of the Year - Philippines HSBC Sri Lanka International Retail Bank of the Year - Sri Lanka PT. Bank HSBC Indonesia Marketing & Brand Initiative of the Year – Indonesia ICICI Bank COVID Management Initiative of the Year - India Domestic Retail Bank of the Year - India IndusInd Bank Ltd. Mobile Banking & Payment Initiative of the Year - India Open Banking Initiative of the Year - India ​ Jusan Bank Digital Banking Initiative of the Year - Kazakhstan ​Online Banking Initiative of the Year - Kazakhstan JS Bank Limited SME Bank of the Year - Pakistan Consumer Finance Product of the Year - Pakistan KBZ Bank COVID Management Initiative of the Year - Myanmar New Consumer Lending Product of the Year - Myanmar Malayan Banking Berhad Marketing & Brand Initiative of the Year - Malaysia Maybank Singapore Limited Marketing & Brand Initiative of the Year - Singapore Mutual Trust Bank Limited Banking for Women Initiative of the Year - Bangladesh Core Banking System Initiative of the Year - Bangladesh National Bank of Vanuatu Limited Financial Inclusion Initiative of the Year - Vanuatu

21 National Development Bank PLC Domestic Retail Bank of the Year - Sri Lanka SME Bank of the Year - Sri Lanka

Shinhan Bank Vietnam International Retail Bank of the Year - Vietnam

Ngern Tid Lor Public Company Limited Finance Company of the Year - Thailand

Siam Commercial Bank PCL. Domestic Retail Bank of the Year - Thailand Strategic Partnership of the Year - Thailand

OCBC Bank ASEAN SME Bank of the Year

SME Bank of Cambodia PLC. SME Bank of the Year - Cambodia

OCBC NISP SME Bank of the Year – Indonesia

Standard Chartered Bank Malaysia Berhad Wealth Management Platform of the Year - Malaysia

Philippine National Bank Mortgage and Home Loan Product of the Year - Philippines

Standard Chartered Bank International Retail Bank of the Year - India

PrimeCredit Limited Finance Company of the Year - Hong Kong

Standard Chartered, Sri Lanka Credit Card Initiative of the Year - Sri Lanka

PT Bank CIMB Niaga Tbk – Emerging Business Banking Digital Banking Initiative of the Year - Indonesia PT Bank CTBC Indonesia New Consumer Lending Product of the Year - Indonesia PT Bank Permata, Tbk Mortgage and Home Loan Product of the Year - Indonesia Strategic Partnership of the Year - Indonesia PT Visionet Internasional (OVO) Financial Inclusion Initiative of the Year - Indonesia COVID Management Initiative of the Year - Indonesia PT. Bank Commonwealth Wealth Management Platform of the Year - Indonesia PT. Bank Maybank Indonesia Core Banking System Initiative of the Year - Indonesia PT. Bank Muamalat Indonesia Mobile Banking & Payment Initiative of the Year - Indonesia Public Bank Berhad Domestic Retail Bank of the Year - Malaysia COVID Management Initiative of the Year - Malaysia Rakbank Mobile Banking & Payment Initiative of the Year - UAE RCBC Bankard Mobile Banking & Payment Initiative of the Year - Philippines Rizal Commercial Banking Corporation Debit Card Initiative of the Year - Philippines Mid-sized Domestic Retail Bank of the Year - Philippines Robinsons Bank Corporation Consumer Finance Product of the Year - Philippines Service Innovation of the Year - Philippines Sacombank Digital Banking Initiative of the Year - Vietnam Saigon-Hanoi Commercial Joint Stock Bank Corporate Social Responsibility & Green Program of the Year - Bronze Banking for Women Initiative of the Year - Vietnam OCBC Bank & SAS Institute Branch Innovation of the Year - Silver Online Banking Initiative of the Year - Singapore SDB Bank Website of the Year - Sri Lanka

Standard Chartered Bank (Hong Kong) Limited Digital Banking Initiative of the Year - Hong Kong Employer Award of the Year - Silver Employer Award of the Year - Hong Kong International Retail Bank of the Year - Hong Kong Standard Chartered Bank (Taiwan) Limited Corporate Social Responsibility & Green Program of the Year - Silver International Retail Bank of the Year - Taiwan Wealth Management Platform of the Year - Taiwan STATE BANK OF INDIA, MALDIVES International Retail Bank of the Year - Maldives COVID Management Initiative of the Year - Maldives Taishin International Bank Service Innovation of the Year - Taiwan COVID Management Initiative of the Year - Taiwan New Consumer Lending Product of the Year - Taiwan The Hongkong and Shanghai Banking Corporation Limited International Retail Bank of the Year - Bangladesh TrueMoney Vietnam Digital Wallet Initiative of the Year - Vietnam U Microfinance Bank Limited Rural/Cooperative Bank of the Year - Pakistan uab bank Berhad Mid-sized Domestic Retail Bank of the Year - Myanmar Union Bank of the Philippines Financial Inclusion Initiative of the Year - Philippines SME Bank of the Year - Philippines Credit Card Initiative of the Year – Philippines United Overseas Bank (M) Berhad (UOBM) International Retail Bank of the Year - Malaysia Digital Banking Initiative of the Year - Malaysia UOB Thailand International Retail Bank of the Year - Thailand United Overseas Bank (Vietnam) Limited New Consumer Lending Product of the Year - Vietnam United Overseas Bank Limited Banking for Women Initiative of the Year - Singapore Branch Innovation of the Year - Gold Domestic Retail Bank of the Year - Singapore Investment Product Innovation of the Year - Singapore ASIAN BANKING AND FINANCE | Q4 2021 39

EVENT: ASIAN BANKING & FINANCE AWARDS Vietnam Public Joint Stock Commercial Bank Initiative of the Year for Account Services - Vietnam

Habib Bank Limited - HBL Equity Deal of the Year - Pakistan

VPBank Finance Company Limited Employer Award of the Year - Bronze Finance Company of the Year - Vietnam

HDFC Bank Limited Corporate & Investment Bank of the Year - India

WeLab Bank Virtual Bank of the Year - Hong Kong Financial Inclusion Initiative of the Year - Hong Kong

Kenanga Investment Bank Berhad Project Infrastructure Finance Deal of the Year - Malaysia Kings Financial Capital Corporate Client Initiative of the Year - UAE

Corporate and Investment Banking Awards 2021

Kotak Mahindra Bank Limited Debt Deal of the Year - India Equity Deal of the Year - India

Aktif Bank Innovative Deal of the Year - Turkey Project Infrastructure Finance Deal of the Year - Turkey

Kuwait International Bank (KIB) Debt Deal of the Year - Kuwait

Al Rajhi Bank Innovative Deal of the Year - Saudi Arabia Asia Green Development Public Company Limited Innovative Deal of the Year - Myanmar Bank Muscat SAOG Corporate & Investment Bank of the Year - Oman Innovative Deal of the Year - Oman Mergers and Acquisitions Deal of the Year - Oman BankDhofar Technology Innovation of the Year - Oman BankIslami Pakistan Limited Syndicated Deal of the Year - Pakistan BDO Capital & Investment Corporation Mergers and Acquisitions Deal of the Year - Philippines Corporate & Investment Bank of the Year - Philippines Domestic Project Infrastructure Finance Deal of the Year - Philippines BPI Capital Corporation Real Estate Equity Deal of the Year - Philippines Innovative Deal of the Year - Philippines

Mashreqbank psc Debt Deal of the Year - UAE Syndicated Loan of the Year - UAE Maybank Kim Eng Equity Deal of the Year - Malaysia Syndicated Loan of the Year - Malaysia Debt Deal of the Year - Malaysia Meezan Bank Renewable Energy Bank of the Year - Pakistan Green Deal of the Year - Pakistan National Bank of Pakistan Corporate & Investment Bank of the Year - Pakistan Corporate Client Initiative of the Year - Pakistan Debt Deal of the Year - Pakistan Project Infrastructure Finance Deal of the Year - Pakistan National Development Bank PLC Corporate & Investment Bank of the Year - Sri Lanka Corporate Client Initiative of the Year - Sri Lanka Project Infrastructure Finance Deal of the Year - Sri Lanka NMB Bank Ltd. Green Deal of the Year - Nepal

Bualuang Securities Public Company Limited Securities House of the Year - Thailand

Philippine National Bank Green Deal of the Year - Philippines Consumer Equity Deal of the Year - Philippines

China Bank Capital Corporation Debt Deal of the Year - Philippines Syndicated Loan of the Year - Philippines

PT Bank CIMB Niaga Tbk Corporate & Investment Bank of the Year - Indonesia Corporate Client Initiative of the Year - Indonesia Syndicated Loan of the Year - Indonesia

CTBC Bank Mergers and Acquisitions Deal of the Year - Taiwan DBS Mergers and Acquisitions Deal of the Year - Singapore 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 FAYSAL BANK LIMITED Innovative Deal of the Year - Pakistan First Abu Dhabi Bank (FAB) Corporate and Investment Bank of the Year - UAE Green Deal of the Year - UAE Garanti BBVA Corporate & Investment Bank of the Year - Turkey Green Deal of the Year - Turkey Project Infrastructure Finance Deal of the Year - Turkey 40 ASIAN BANKING AND FINANCE | Q4 2021

QINVEST LLC Innovative Deal of the Year - Qatar RCBC Capital Corporation Cross-border Project Infrastructure Finance Deal of the Year - Philippines Debt Deal of the Year - Philippines RHB Islamic Equity Deal - Malaysia SB Capital Investment Corporation Corporate Client Initiative of the Year - Philippines SBI Capital Markets Limited Mergers and Acquisitions Deal of the Year - India Siam Commercial Bank PCL. Corporate & Investment Bank of the Year - Thailand Debt Deal of the Year - Thailand Mergers and Acquisitions Deal of the Year - Thailand

21 SinoPac Securities Corporation Debt Deal of the Year - Taiwan Green Deal of the Year - Taiwan Sohar International Bank SAOG Debt Deal of the Year - Oman Equity Deal of the Year - Oman Taipei Fubon Commercial Bank Co., Ltd. Innovative Deal of the Year - Taiwan Syndicated Loan of the Year - Taiwan Taishin Securities Co., Ltd. Management Buyout of the Year - Taiwan Securities House of the Year - Taiwan

Standard Chartered Bank (Hong Kong) Limited

Tan Viet Securities Incorporation Securities House of the Year - Vietnam The Bank of Punjab Project Infrastructure Finance Deal of the Year - Pakistan TISCO Securities Company Limited Equity Deal of the Year - Thailand UOB Innovative Deal of the Year - Singapore Debt Deal of the Year - Singapore Debt Deal of the Year - China Syndicated Loan of the Year - Singapore

Standard Chartered Bank (Hong Kong) Limited

BDO Capital & Investment Corporation

BDO Foundation

BDO Private Bank

BDO Unibank

Standard Chartered Bank (Hong Kong) Limited

ASIAN BANKING AND FINANCE | Q4 2021 41

EVENT: ASIAN BANKING & FINANCE AWARDS

HSBC Bank (China) Company Limited

HSBC Amanah Malaysia Berhad

HSBC Philippines

HSBC Indonesia

HSBC Philippines

HSBC Bank (Singapore)

42 ASIAN BANKING AND FINANCE | Q4 2021

HSBC Indonesia

HSBC Bank (Vietnam) Limited

21

au Jibun Bank Corporation

CIMB Bank Berhad, Singapore branch

OCBC Bank

Nepal SBI Bank

Philippine National Bank

Bank of China (Hong Kong)

Bank of China (Hong Kong)

PT Bank CIMB Niaga Tbk – Emerging Business Banking

ASIAN BANKING AND FINANCE | Q4 2021 43

EVENT: ASIAN BANKING & FINANCE AWARDS

SME Bank of Cambodia PLC.

PrimeCredit Limited

The Bank of East Asia, Limited

UOB

Union Bank of the Philippines

UOB Thailand

Union Bank of the Philippines

Standard Chartered Bank (Taiwan) Limited

44 ASIAN BANKING AND FINANCE | Q4 2021

21

Bank Mandiri

PT Bank Permata

BCA

HBL

Standard Chartered India

HSBC Amanah Malaysia Berhad

HKT Flexi Limited

Kenanga Investment Bank Berhad ASIAN BANKING AND FINANCE | Q4 2021 45

EVENT: ASIAN BANKING & FINANCE AWARDS

BIDV

CIMB Thai Bank Public Company Limited

CIMB Niaga

Affin Bank Berhad

UOB

UOB

Cebuana Lhuillier Rural Bank, Inc.

Cebuana Lhuillier Rural Bank, Inc.

46 ASIAN BANKING AND FINANCE | Q4 2021

21

RCBC Bankard

RCBC

United Overseas Bank (M) Berhad

Ngern Tid Lor Public Company Limited

United Overseas Bank (M) Berhad

Siam Commercial Bank PCL.

Baiduri Bank

Standard Chartered Bank Malaysia ASIAN BANKING AND FINANCE | Q4 2021 47

CREDIT CARD INITIATIVE OF THE YEAR - MALAYSIA

HSBC Amanah Malaysia wins award for leading sustainability innovation The bank’s commitment to sustainability was further strengthened when it embarked on a transformation to become HSBC Group’s first sustainable bank by 2022.

H

SBC Amanah Malaysia began its sustainability journey in 2017 as one of the earliest adopters of Malaysia’s central bank, Bank Negara Malaysia’s Valuebased Intermediation framework aimed at encouraging Islamic banks in Malaysia to shift to a new and holistic mindset that considers the impact of banking on both the people and the planet.

The bank’s commitment to sustainability was further strengthened in 2020 when it embarked on a 24-month transformation to become HSBC Group’s first sustainable bank by 2022. This is in line with the global banking group’s wider ambition to transform the group’s operations and supply chain to net-zero by 2030, and subsequently become a net-zero financier by 2050 or sooner.

The Credit Card Initiative of the Year Malaysia 2021 award for HSBC Amanah Credit Card-i is recognition of HSBC Amanah’s leadership position through product innovation to influence customers and the broader community on sustainability and encouraging collective action. The award underlines HSBC’s long-term commitment to driving a sustainable future from finances, to well-being and the environment—all these whilst delicately balancing continued shareholder growth and return.

Impacting change by inspiring inclusive action As part of a broader strategy within the bank to affect change internally and externally towards a sustainable future, HSBC Amanah Credit Card-i’s new ESG (Environmental, Social, and Governance) proposition was the first amongst international Islamic banks in Malaysia.

For every charitable donation made by cardholders on their HSBC Amanah Credit Cards, HSBC will donate 1% of the charity spend to selected local charities or nonprofit organisations. The charities currently supported include the Global Environment Centre, Yayasan Chow Kit, Pintar Foundation and Pertiwi Soup Kitchen, in alignment with different pillars within the United Nations Sustainable Development Goals.

Together with the ESG proposition, HSBC has partnered with a social business,

48 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

HSBC Switches To Recycled Plastic Payment Cards

Incitement, to create a dedicated digital platform for customers to contribute to local charities and non-profit organisations supported by HSBC. The partnership allows the bank to leverage on digital capabilities to further drive awareness and accessibility of local charities.

Through the platform, customer contributions are 100% transparent on where donations are contributed. Customers will also receive automatic updates regarding the progress and, at the end of each charitable cause, a summarised impact report will be made available on the platform.

Ultimately, this creates a win-win outcome for customers who want to lend a hand to communities and causes that matter to them – whether through monetary contributions or volunteerism – and the people and organisations who receive the aid.

Sustainability can enable organisations to create financial performance, whilst at the same time achieving positive environmental and social impact Holistic strategy towards net zero “At HSBC, we have a responsibility to our customers, employees, and the communities in which we serve. We recognise that economic growth must also be sustainable if we are to achieve success in the long term,” said HSBC Amanah Malaysia CEO Raja Amir Shah about the ESG charity feature.

“Sustainability can enable organisations to create financial performance, whilst

at the same time, achieving positive environmental and social impact. And our new ESG proposition does exactly this – we have created a new innovative solution for our credit cards that will enable us to make an impactful difference to our communities and the environment.”

Beyond the ESG innovation, HSBC Amanah was also the first within HSBC Group to launch credit cards made from 85% recycled plastic (rPVC) in January 2021, with the use of rPVC in all cards to rise to 100% later in the year. With this pioneering move, carbon emissions from our credit card production are expected to be significantly reduced in 2021 and beyond.

Combined, these retail initiatives, amongst others, together with other key entity-wide sustainability strategies form the impetus for HSBC to achieve its sustainability aspirations locally and globally. By doing more for Malaysia and the world, HSBC hopes to open a world of opportunities for the communities it serves whilst ensuring that our collective duty and shared obligation towards society and the environment are fulfilled.

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 49

RURAL/COOPERATIVE BANK OF THE YEAR - PAKISTAN

Rural Banking needs to be About More than Just Agri & Livestock Lending U Microfinance Bank Private Limited remains devoted to progress the national agenda of financial inclusion.

G

lobally, poverty continues to be a disproportionately rural problem, with an estimated 79% of the worldwide poor living in rural areas. We see a similar trend in Pakistan where the financially included population remains predominantly urban (68%). The microfinance sector by virtue of working on the frontlines of poverty by extending credit to those typically considered uncreditworthy by the banking sector has become key players in battling this disproportionate lack of financial inclusion, particularly in rural areas.

Whilst U Microfinance Bank Private Limited (U Bank) remains devoted to progress the national agenda of financial inclusion, our approach towards this mission is vastly different from the norm. At U Bank our primary customer segment is the economically active poor i.e. farmers, small entrepreneurs, and daily wagers, and whilst their needs are vastly different from the affluent customer segments in cities they do have similar aspirations for creating wealth, managing their savings and improving the quality of their lives beyond their need for credit.

Despite this reality there is a gross absence of banking facilities in rural Pakistan.

At U Bank our customer’s needs have always driven our strategy and as a result today we have the largest on-ground presence in the microfinance sector with 201 branches and ATMs across 183 rural and urban areas in the country. Moreover, U Bank is strategically located in places, where the bank’s branch and ATM network is the nearest formal banking option available to customers, thus ensuring the availability of modern banking facilities to the rural population.

These customers otherwise have to rely solely on retail agents to meet their basic financial transaction needs, a system that faces liquidity and exploitation of customerrelated issues which spoil customer experience and erode their trust.

Furthermore, being a full menu bank, we have constructed a diverse product suite that caters to clients in both rural and urban areas. Considering the former, our dedicated product team conducts extensive market research to pinpoint the needs of rural customers and develop bespoke products for them. All of these products stimulate

50 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

U Bank’s primary customer segment are farmers, small entrepreneurs, and daily wager U Bank Branch

progress and prosperity in rural areas through the creation of income-generating opportunities. We also recognise that women are less likely to escape poverty as they experience greater social and financial risk.

Therefore, U Bank has designed products to ensure the health and well-being of women

U Bank our customer’s needs have always driven our strategy and as a result today we have the largest on-ground presence in the microfinance sector in poverty. Our work goes beyond working on just lending product innovation and we devote significant energy and resources towards design pilot projects which help us improve the value-chains in which our key customers operate. An example of this comes via our work within the agri value-chain where we are piloting with a startup Ricult to gain satellite imagery-based crop health and harvesting data as well as micro-weather insights for our farmer customer. This pilot has been showing promising results for both internal portfolio management and crop health management for the farmers.

As a bank operating in the rural space we have also been extremely mindful of the impacts of the COVID-19, also referred to as a ‘developing country pandemic’ due to its disproportionate impact on poor and vulnerable populations. Due to this consideration even despite the difficult

condition due to imposed nationwide lockdown, U Bank took a determined stand to not discontinue lending to our core customer base. We are aware that our customers are dependent on day-to-day activity for survival and would not be able to recover from reduced cash flow. This decision was not made without evaluating the associated business risks, and the bank made the strategic decision to help our customers use their non-productive gold assets as collateral to meet their emergency cash needs whilst securing more of our portfolio at the same time creating a win-win situation for all parties involved.

We believe that the future of finance is the brightest if it is targeted towards typically excluded segments i.e. the poor, rural and vulnerable. Our core values of merit, commitment, innovation, ethics, and transparency guide us towards greater penetration, outreach, and efficiency and improving access to low-income communities throughout the country and hence elevating the economic, social, and environmental impact that our organisation has. We are committed to keep advancing our way of doing business, and build a bank of the future, that not only creates greater ease of doing business but also considers convenience and ease for our customers, all whilst innovating and adopting technological developments to offer unique and innovative product and service offerings that meet the ever-evolving needs of our clientele.

ASIAN BANKING AND FINANCE | Q4 2021 51

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

Standard Chartered Hong Kong secures multiple awards at the 2021 ABF Retail Banking Awards StanChart spearheads international digital banking with empowered employees

Mary Huen, CEO, Hong Kong and Ong Lay Choo, Managing Director, Head, Consumer, Private and Business Banking, Hong Kong, unveiled the Priority Private Centre at K11 ATELIER Victoria Dockside

S

tandard Chartered Hong Kong has been making efforts for its comprehensive digital innovations leading to a more fluid banking experience for its customers and increased morale of its employees.

Because of this, the leading international banking group earned three recognitions at the 2021 Asian Banking & Finance Retail Banking Awards. Standard Chartered was hailed as the International Retail Bank of the Year, and Digital Banking Initiative of the Year.

The company invested in digital banking systems to introduce a seamless and efficient banking experience to its clients. Through this innovation, the bank was able to use data analytics to communicate more effectively and offer a more personalised service to its customers, whilst improving the overall efficiency of the process.

According to Standard Chartered, the bank has focused on understanding its clients’ behaviour through data and analytics to identify client challenges in digital touchpoints. “This enabled us to customise our communication and offer to enhance the effectiveness of digital sales and service adoption program,” said Ong Lay Choo, Managing Director and Head of Consumer, Private and Business Banking, Hong Kong.

The digitisation of the banking process allowed Standard Chartered to introduce instant services using the SC Mobile App, which covers multiple services from instant banking account opening, instant approval for loans, and fund transfer to name a few. Users of the app are also given real-time information about their card transactions and other matters like international exchange rate.

The digital bank process also allowed for more flexibility to its clients to use multiple 52 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

services engaging in transactions and money transfers. The banking app gave users the power to use their accounts for different needs without having to physically appear in a local branch.

“On top of instant services, clients are also in demand for more options and flexibility.

Recently, we launched a service that allows our clients to use credit cards as debit sources for local transfers in SC Mobile App. Such will enable clients to pay their rent, education expenses, and even friends via own credit cards,” said Lay Choo.

Standard Chartered is keen to using digital technology to improve the banking experience of customers. Despite the limitations brought by the pandemic, the bank was able to offer a

SCBHK has focused on understanding its clients’ behaviour through data and analytics to identify client challenges in digital touchpoints personalised Relationship Manager (RM) service to its clients in a more efficient manner.

“We launched the MyRM platform in the midst of COVID-19 last year. It is a great tool for our RMs to keep in connection with our clients in a secure way when they are not able to visit the branches. By leveraging on key functions like documents and file sharing, screen sharing, text chat, and audio call functions, RMs can easily provide investment advice and services via our SC Mobile App or online banking platform. All conversations and exchanged information will be kept confidential,” said Lay Choo.

Aside from providing world-class service to its customers, Standard Chartered also prides itself on being an employee-friendly organization,

maintaining a high-quality workforce provided with the best-in-class working environment. The bank has pioneered inclusive initiatives for its employees, such as rolling out hybrid working and allowing permanent flexible working to all eligible employees ahead of others.

The company believes that a work culture that embraces diversity and inclusivity presents a great working environment to employees and enables them to unleash their true potential in their respective careers.

“Diversity and Inclusion (D&I) is embedded in our values and an inherent part of our brand and culture. This is about creating a workplace culture that helps every colleague to contribute to their full potential. It is more than just policies, initiatives, and processes: it is about how we work together and ensure everyone feels respected for who they are in the bank,” said Florence Wong, Managing Director and Head of Human Resources, Hong Kong, Macau, Japan and Co-Head of Human Resources, Greater Bay Area.

The company had invested in their efforts to provide a dynamic working culture to its employees and introduced four different networks to drive the D&I culture, including Women in Network, Parents and Caregivers, LGBTA and Disabilities. Besides these networks, the company has initiated Inclusive Leadership Program and enabled leaders within the organization to learn how to lead with inclusion and to promote D&I culture across the whole company.

Florence Wong, Managing Director, Head, HR, Hong Kong, Macau, Japan & Co-Head HR Greater Bay Area

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 53

WEALTH MANAGEMENT PLATFORM OF THE YEAR – THAILAND DIGITAL BANKING INITIATIVE OF THE YEAR – THAILAND

CIMB THAI BANK RECOGNISED AT ABF RETAIL BANKING AWARDS The bank solidified their position as top distributor for bonds and structured products in Thailand.

CIMB Thai Bank took home the “Wealth Management Platform of the Year – Thailand” award for the second consecutive year as well as the “Digital Banking Initiative of the Year – Thailand” award at the recently-concluded Retail Banking Awards 2021. This event honours the most outstanding banks and financial institutions that have introduced ground-breaking products and services that empowered them to successfully adapt with the rapidly evolving tech and banking landscape.

Since embarking on their digital journey in late 2018, CIMB Thai has been focused on constantly expanding the digital frontier with regards to providing accessible financial services throughout Thailand. Being one of the first banks to exit the regulatory electronic Know Your Customer (e-KYC) Sandbox, the bank has taken major strides digitally, rolling out initiatives including a fully-digital process to open a banking account, as well as transitioning smoothly from a brick-andmortar model into a seamless mobile-first banking experience, allowing them to fulfil customers’ financial needs wherever they are, whenever they need it.

What sets CIMB Thai apart from other banks is that customers do not need to

CIMB Thai has been focused on constantly expanding the digital frontier with regards to providing accessible financial services throughout Thailand step into a physical bank branch to bank with them. In 2020, CIMB Thai enabled additional onboarding journeys, allowing new-to-bank customers to perform KYC at any of the 13,000+ Counter Service outlets at 7-Eleven convenience stores nationwide, or even leverage KYC information from customers’ existing banks via the National Digital Identity (NDID) blockchain framework. As a result, even though CIMB Thai has scaled down physical branch presence by 16%, their Digital Savings Account opening performance has grown 7x by the end of the year.

54 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

CIMB Thai has also achieved some notable wealth-related milestones in 2020, the most prominent being the solidification of their position as a top distributor for bonds and structured products in Thailand, leading in market share for both. In Q4, the bank enhanced their wealth proposition even further by launching a new 15year exclusive non-life bancassurance partnership with Sompo Insurance to offer fully-integrated insurance solutions.

CIMB Thai’s prowess in wealth blends perfectly with their digital initiatives, as they enabled digital primary bonds subscriptions on the CIMB TH Digital Banking application in 2020, allowing customers to subscribe to primary bonds directly from within the application. This quickly grew into a success story as they issued over THB2bn in bonds digitally within a year. In fact, a recent digital bond issuance reached THB1bn in volume (100x compared to their first issuance), signifying increasing user confidence in their digital wealth platform.

For those who still prefer face-to-face interaction, especially for the affluent segment, CIMB Thai has also unveiled brand-new Wealth Centres in Silom Complex and Central Ladprao. Equipped with a wide range of innovative wealth services to better serve the Preferred segment, the new branches include a smart wealth advisory system, a revamped store layout and personalised wealth offerings, just to name a few.

Data and analytics play a critical role in enabling the successful delivery of

CIMB Thai’s digital wealth products and services. Leveraging the multifaceted data from various interactions with customers across the bank, they have successfully developed several meaningful models to create more value for customers, including a Next-ProductTo-Buy (NPTB) model, which greatly enhances the bank’s ability to recommend the best products to fit customers’ needs, as well as a Hidden Preferred model, allowing CIMB Thai to identify affluent individuals via behavioural trends so that the bank can reach out with exclusive Preferred offers.

Amidst an ever-changing, increasingly digital world, CIMB Thai will constantly adapt to provide a seamless banking experience for their customers. The bank plans to launch more wealth-focused enhancements to allow customers to do more, including an integration with FundConnext, where customers can access and invest in mutual funds offered by fund houses throughout Thailand. They have recently launched digital secondary bonds capabilities via their platform, while other initiatives in the pipeline include enabling wealth robo-advisory and an enhanced consolidated financial portfolio for customers to manage their wealth.

CIMB Thai aspires to continue driving the future of banking in Thailand and ASEAN. They stated that all of these could not have been achieved without the support of their customers as well as the various partners that they have worked with.

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 55

21

SINGAPORE DOMESTIC INITIATIVE OF THE YEAR

Why is solar leading the rise of renewable energy in Asia?

UOB’s U-Solar is Asia’s first one-stop solar ecosystem financing platform.

U-Solar: Simplifying the switch to solar energy for Asia U-Solar is Asia’s first one-stop solar ecosystem financing platform. Through partnerships with solar developers, contractors, businesses, and homeowners across Singapore, Malaysia, Indonesia, and Thailand, U-Solar brings together ecosystem players and end-users on one integrated platform.

U-Solar brings together ecosystem players and end-users on one integrated platform

Source: Solarvest

R

enewable energy has claimed a greater share of electricity generation and is projected to lead total power generation from 20351. This is a result of increasing cost-competitiveness, supportive renewable policies and institutional frameworks, and price volatility of traditional energy sources.

The COVID-19 pandemic has also been a catalyst for change and has accelerated the push for sustainability. As governments and businesses look towards a green recovery, global investments in renewables and energy transition could double to US$2t per annum2 over 2021 – 2023. In Southeast Asia, countries have set renewable energy targets of up to 35% of the total energy mix3 by 2037.

Solar energy and its benefits Southeast Asia’s geographical location allows the region to enjoy ideal levels of solar radiation. Additionally, the cost of solar installation has declined by over 70% between 2010 – 20204, making solar energy a cheaper source than traditional fossil fuel and more accessible. This makes solar energy the most viable solution to meet the region’s electricity demand and sustainability targets.

Installing a rooftop solar system can bring about multiple benefits to buildings and homeowners. Other than providing immediate savings on electricity bills, solar panels also protect the rooftop by shielding it from harmful ultraviolet rays and cooling the temperature of the roof, thus prolonging its durability.

56 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

Powering businesses and homes Although most buildings and homeowners are aware of the savings and environmental benefits of solar energy, the perceived cost, and hassle of installation and maintenance is usually a deterrence. This is where financial institutions can play an important role to support end-users. If flexible financing options are available, end-users will be incentivised to install solar power systems as they can do so with minimal upfront investment.

For SMEs in particular, partnering with a financial institution that has established frameworks is crucial to ensure that initiatives qualify for sustainable financing. This allows them to enjoy enhanced branding as an ESG-conscious corporation without investing heavily in building their own framework.

Source: SolarGy

With U-Solar, businesses can own a solar power system at minimal upfront investment, whilst homeowners can enjoy 0% interest payment plans with a UOB credit card. It is supported by the UOB Smart City Sustainable Finance Framework, which guides the Bank’s financing efforts to encourage the development of smart and sustainable cities across the region through a streamlined and transparent process.

As of July 2021, U-Solar has facilitated the generation of almost 163.9GW hours of solar power across its four markets, reducing more than 81,500 tonnes CO2equivalent in greenhouse gas emissions, which is equivalent to having close to 1.35 million new tree seedlings grow over 10 years or taking more than 17,737 cars off the road for a year.

Visit www.UOBgroup.com/u-solar to find out more.

Source: TML Energy

Source: Forbes report quoting Carbon Tracker Source: International Renewable Energy Agency (IRENA) Source: International Energy Agency (IEA) 4 Source: National Renewable Energy Laboratory (NREL). 70% is the average decline for installation of residential, commercial rooftop and utility scale solar systems.

1 2 3

ASIAN BANKING AND FINANCE | Q4 2021 57

21

MALAYSIA INTERNATIONAL TRADE FINANCE BANK OF THE YEAR MALAYSIA INTERNATIONAL INITIATIVE OF THE YEAR

Financial innovation to support and sustain businesses growth UOB Malaysia continues to create true value with impactful transaction banking solutions.

W

hilst local and global businesses alike are facing financial and operational challenges during the COVID-19 pandemic, banks have a critical role to play in helping them weather the current storm. This provides banks with an opportunity to innovate new ways to support their clients to transit into more efficient ways of doing business. For this, banks need to be agile to embrace change from serving a single client to serving an ecosystem.

It is with this thought that at UOB Malaysia, we have modelled our approach in creating innovative and ecosystem-based solutions encompassing Cash Management UOB Malaysia Headquarters (Menara UOB) and Financial Supply Chain Management (FSCM) solutions for clients to support and upstream and downstream. We have also sustain business growth. implemented more than 20 successful To illustrate this, UOB Malaysia has crafted programmes involving close to 40 anchors, a Distributor Financing Programme under the nearly 100 spokes with more than RM2b total FSCM structure for a multinational beverage in our balance sheet. With anchors and spokes company, allowing access to RM120m from industries including construction and working capital for their distributors to drive industrial, oil and gas, telecommunications, cost efficiency, liquidity creation, and risk manufacturing and fast-moving consumer mitigation. With this programme, the client goods, FSCM is highly adaptable and suitable was able to cut into more than half its Days across industries.

Sales Outstanding from 45 days to 21 days, Another emerging trend that has become which translates to an average of 2% per increasingly crucial for annum interest business long-term earned as nonoperating income.

By putting financial innovation survivability during this unprecedented This is achieved at the forefront in creating time is the digital without additional sustainable ecosystem-based transformation of collateral or solutions, customers will truly business processes. commercial risk unlock their business potential Whilst gradual progress on the part of to weather the current storm and has been made in the client nor emerge stronger the digital space their ecosystem to encourage more players. With cashless payments adequate liquidity amongst businesses, there is still a gap and working capital, the client’s sales grew when it comes to the collection process, double digit. These positive results also specifically with cash-on-delivery payments. helped cushion the client’s liquidity in its UOB mCollect, a digital collections solution, is ecosystem especially during this pandemic. ideated to fill the gap by helping businesses in The implementation of the FSCM solution moving towards financial efficiency. It is best has also opened up opportunities for the suited for distributors, wholesalers, and midclient and its distributors to have access to a sized producers who rely heavily on a cash-onwide array of transaction banking solutions, delivery mode of payment collections. including, but not limited to, receivables, As an example, one of our clients in the payments, and liquidity management food processing, packaging, and distribution solutions. business makes hundreds of deliveries on a UOB Malaysia has been one of the daily basis. With payment collections usually market’s active proponents of FSCM and made by cash, its sales staff had to spend its benefits to the entire ecosystem, both

58 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

time and effort on verifying amount and payee details and reconciling the payments at the end of each day. Handling physical cash also exposes clients to the risks of potential fraud and robbery. In addition, this manual collection process is susceptible to human error and slows down the actual cash depositing process into the client’s account.

With UOB mCollect, the client’s sales staff are able to collect payments digitally using a single QR code, streamlining the collection process, and reducing the time needed for each delivery. This also benefits the client’s finance team, as payments received through UOB mCollect are automatically reconciled against each invoice, reducing the time required to reconcile payments. For businesses with Enterprise Resource Planning or ERP solution, such as this client, they can enjoy the added benefit of being able to easily integrate with UOB mCollect by just downloading a mobile app.

Lucas Chew, executive director and country head of Transaction Banking, UOB Malaysia, said, “This unprecedented time should serve as a reflection for banks to continuously steer towards creating true value with impactful and innovative solutions to support customer business growth and viability post-pandemic. By putting financial innovation at the forefront in creating sustainable ecosystem-based solutions, customers will truly unlock their business potential to weather the current storm and emerge stronger.”

ASIAN BANKING AND FINANCE | Q4 2021 59

21

MALAYSIA INTERNATIONAL CASH MANAGEMENT BANK OF THE YEAR

OCBC banking on digital growth for greater convenience to customers OCBC Bank has redefined the way businesses collect payments in-store and online with the launch of OCBC OneCollect.

T

he COVID-19 pandemic has transformed the way businesses interact with their customers. Forever.

Businesses shifted online and now rely more heavily on the digital space to reap sales and market outreach. Consequently, the digitalisation of businesses has sent the adoption of digital payments into hyperdrive, challenging banks in the market to provide more frictionless and innovative digital payments services.

When choosing from a plethora of business payment solutions, there are several crucial factors customers will consider such as transaction fees and reconciliation methods. This is especially so for SMEs. Unlike large businesses, it is important for small businesses to carefully choose a payment system that provides them with full control over their collections, and without too great a turnaround time and unpredictability.

OCBC Bank (Malaysia) Berhad’s (OCBC Bank) digital efforts are premised on its Purpose Statement, to help individuals and businesses across communities achieve their aspirations by providing innovative financial services that meet their needs.

With our current measurements of Digital Adoption, we would say >50% of our business customers are highly digitally engaged with our digital solutions and offerings. By helping our SME customers Go Digital with OCBC, we have enabled them to work things out more seamlessly. We would want to see every customer have a ‘bank in the pocket’ through our Mobile First Strategy.

60 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

As one of the longest established foreign banks in Malaysia, OCBC Bank has redefined the way businesses collect payments instore and online with the launch of OCBC OneCollect, a mobile app that facilitates contactless collection via QR payments.

Through its strong regional connectivity, OCBC Bank’s OneCollect enables the collection of local payments (MYR) through DuitNow QR and cross-border payments (SGD) through PayNow QR. DuitNow QR is the Malaysian QR standard for allowing customers to scan & pay from any participating banks or eWallet of their choice. Similarly, PayNow QR is the national QR standard in Singapore supported by nine banks in Singapore where payment is debited directly from the savings account of the buyer. Hence, if you are looking to sell products online internationally to Singapore,

OCBC Bank’s digital efforts aim to help individuals and businesses across communities achieve their aspirations by providing innovative financial services that meet their needs. chances are very good that you wouldn’t need to worry whether or not your customer is using the same currency as you anymore.

Being the first bank in Malaysia to bring PayNow QR to the market, OCBC OneCollect was welcomed by businesses, especially those located in the southern region of the Peninsular, and has since become the

preferred option for them. By collecting through OCBC OneCollect, customers can pay for goods and services in-store or online without needing to touch anything or worry about virus transmission. This is particularly beneficial during times like this when the impact of the pandemic has become even greater than we first thought. What’s more, merchants can expect to enjoy fast settlement and competitive Merchant Discount Rates (MDR).

When you have cash flow moving in and out of your business, you’ll need to track and analyse it closely, so it doesn’t drift into the red zone. In order to make a sound business decision, you will need solid information, especially about your business financials —and this tool is able to help.

Fully integrated into OCBC Velocity (Business Internet Banking), OCBC Business Financial Management (BFM) provides time-starved businesses with past and current cash flow data and forecasts their future cash flow, giving them an idea of where their business is heading and allowing them to respond to the situation more effectively. It also offers a drill-in to view your complex income and expenditure items by different categories.

In addition, we understand that manual invoice generation and payment tracking can be tedious and timeconsuming. Therefore, Business Financial Management is here to do all the heavy lifting for your invoicing process. It enables you to customise invoices based on different requirements, send invoices, and tracking payments more easily.

Ultimately, suitable business payments and financial solutions should help accelerate your business collections and provide predictability and clarity of your financial situation. Amidst the pandemic, it is indispensable to adapt, adjust and improvise your business to thrive. Remember, the more control you have over the money moving in and out of your company, the better you can weather market fluctuations and instability.

ASIAN BANKING AND FINANCE | Q4 2021 61

FINANCE COMPANY OF THE YEAR - THAILAND

Financial Inclusion Innovation for the Underbanked Thais Ngern Tid Lor ramps up technology capabilities to assist customers in digital adoption. insurance and non-loan customers at an increasing rate, significantly reducing the cost of acquisition. Furthermore, it has also implemented a machine-learning trained chatbot on Facebook, resulting in an over 160% increase in leads generated from Facebook inquiries.

W

ith more than three decades of experience in providing financial services to the underbanked Thai population, Ngern Tid Lor Public Company Limited (TIDLOR) is the leader in the fastgrowing vehicle title loan market in Thailand.

It is also a non-life and life insurance broker with the largest number of licensed branch staff in the country. With over 1,000 branches nationwide, the company aims to alleviate poverty in Thailand by providing fair, transparent, and convenient financial services.

The underbanked population is traditionally considered as digitally challenged and thus almost all service providers focus on opening low-cost branches as a growth strategy. However, TIDLOR observed that digital adoption of customers has been increasing dramatically for those less than 45 years old, especially during the COVID-19 pandemic. In order to meet the increasing demand, it sets out to massively ramp up its technology capabilities such as mobile technologies, data analytics, cybersecurity, automated processing, and ecosystem integration, by doubling its IT spending/investment and tripling its IT resources to over three hundred people.

In 2020, its years of investment started to bear fruits with key projects launched successively that have massively upgraded

62 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

the way it provides services from branches, agents, and to customers directly, including: Branch Experience Digital Transformation From originating motorcycle loans, selling motor insurance, to processing repayments, all key branch services are provided through an iPad. The ease of use has reduced staff training and service turnaround time, whilst increasing customer satisfaction. As the functionality on iPad continues to be enhanced, it will eventually enable TIDLOR’s agents to provide the same services as their own branches. As a result, TIDLOR’s distribution network could be expanded massively without opening more branches.

Ngern Tid Lor’s efforts transformed the organisation with new competencies and perspectives to serve its customers with innovations for years to come Digital Acquisition Platform With its expertise in digital acquisition, TIDLOR has achieved the #1 searched brand on Google, generating 3.5 times of web traffic from its competitors. Its digital acquisition platform also contributes 25% of new

Mobile Application TIDLOR’s mobile app provides self-service for its customers to manage their accounts, and offering various contents, functionality, and a generous loyalty program to engage with non-customers. Even though mobile apps are not considered new technology, it is new to TIDLOR’s underbanked customers, who are less digitally proficient. Therefore, the app’s built-in loyalty program is designed to encourage usage and drive desired customer behaviors (e.g. on-time repayments for loan installments and watching financial education videos).

As a result, the market response was overwhelmingly positive. In less than 2 months, it has achieved 144k downloads.

And in 6 months, it has generated over ₿100m loan volume.

Data Analytics Infrastructure Finally, TIDLOR has developed an infrastructure to capture an increasing volume of customer data to provide insights to improve all aspects of its operations, including sales and lead management, marketing, branch operations, portfolio management, insurance platform, and employee engagement, etc. During the peak of COVID-19, this data analytics infrastructure has proven its worth by generating over 100 insightful analytic charts daily to help TIDLOR navigate through the uncertainties, understand the underlying risks, and formulate the best courses of actions.

The launch of these platforms has resulted in a massive increase in digital adoption across all its digital networks.

In addition, its digital transformation effort has transformed its organisation at all levels with new competencies and perspectives to serve its customers with innovations for years to come.

Winner of 2 Asian Banking and Finance awards in 2021 • Domestic Retail Bank of the Year – Hong Kong • Initiative of the Year – Hong Kong

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 63

WEALTH MANAGEMENT PLATFORM OF THE YEAR - JAPAN

What’s important for future banking wealth management? au Jibun Bank makes one-stop investment trusts trading possible through au Jibun Bank app.

T

he economic and social disruption caused by the pandemic is devastating. People are getting more and more worried about their wealth safety and are trying to find a better way to invest. The mobilecentric bank in Japan, au Jibun Bank, has stepped up to address this situation.

It is determined to be one of the most professional wealth management banks providing safer, easier, and enjoyable services.

Make investment safer and easier by utilizing AI Many traditional Japanese will still take a step back when they encounter the topic of forex trading, considering its comparatively high risk. To make it easier and safer to general customers, au Jibun Bank released three artificial intelligence (AI)-driven services—AI Forex Forecast, AI Foreign Currency automatic saving, and AI Japan Market Forecast—between June 2017 to May 2020, in collaboration with AlpacaJapan Co., Ltd., a fintech start-up with advanced AI expertise.

AI Forex Forecast is a service that adopted machine learning of image feature extraction backed by historical data to predict future rate-to-come within an hour, within one to five days, then show the prediction results in emoticons, followed by accurate app pushes sent only when the probability of movement is high.

Meanwhile, AI Foreign Currency automatic saving can execute automatic deposit transaction for foreign currency savings at the BEST single timing during the month judged by the AI. Algorism quality of AI deposit execution has constantly been improved by deep learning, such as of latest currency rates and of market data.

AI Japan Market Forecast is based on the analysis of Tokyo stock market index figures and economic indicator figures derived from monthly surveys (Purchasing Managers’ Index: PMI). As a free single content in au Jibun Bank app, it shows both the short-term (5 days ahead) and the mid-term (one month 64 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

of trusts held, rankings of popular investment trusts, and a lot others, in their securities account at any time.

Emma Li, Global Fin-telligence Office, DX Department, au Jibun Bank

ahead) forecast graphs of the Japan stock market.

Embrace open banking Open banking has become an irresistible trend around the world, especially in some areas like Europe. The au Jibun Bank noticed this important trend in the wealth management space and launched a new feature of application programming interface (API), which makes one-stop investment trusts trading possible, by the end of March 2021. This investment trusts API was first opened by au Kabucom Securities in the whole online brokerage industry of Japan—and au Jibun Bank became the first bank to implement this feature.

Using this API, users can seamlessly buy popular investment trusts handled by au Kabucom Securities through their own au Jibun Bank apps. They can also easily check investment trusts information, such as their account balance, details

Be more friendly to beginners In March 2021, au Jibun Bank widened its entry points for customers to get an easy-start into forex trading. Three unique forex trading services: Forex Demo Trading, Forex Manga, and Forex Simple Mode, which are exclusively tailored for investment beginners were unveiled.

Customers’ journey starts from “Forex Demo Trading” with virtual funds, without registering customer information nor opening forex accounts.

They can also opt to read online forexrelated manga starring well-known Samurai characters. Through these initiatives, users can enjoy learning about forex trading without needing to open accounts with certain amount of funds.

Once customers find them interesting, they could easily start trading with “Forex Simple Mode,” which is the beginner-friendly user-interface (UI) option of the forex app. By chipping off many features from the normal forex app, investment beginners can easily tell, even at first glance, which buttons and features to use for their trading activities.

Besides wealth management services, au Jibun Bank deeply

au Jibun Bank is determined to be one of the most professional wealth management banks providing safer, easier, and enjoyable services believes that financial education is the foundation to help customers do better and they have started to give monthly webinars based on PMI data analysis to general customers early before COVID-19 outbreak. In this field, au Jibun Bank hopes to do more for kids and young generations in the future.

INTERNATIONAL RETAIL BANK OF THE YEAR - PHILIPPINES

HSBC Philippines bags International Retail Bank of the Year at the ABF Awards The bank was recognised for its extraordinary achievements in 2020, surpassing challenges with much resilience while continuing to provide the best service to its customers and making an impact on the community.

HSBC Philippines

“HSBC goes beyond offering financial services. We want to create a real impact in people’s lives in all we do, and this recognition is a testament to what we can do for our customers, employees, and the community”

H

SBC Philippines’ retail bank was awarded by Asian Banking and Finance (ABF) Retail Banking Awards as International Retail Bank of the Year. It continued to be of service to the customers and the community, providing digital innovations for better customer experience, financial relief for its customers, credit card promotions with a cause, contributions to the community, and also taking action to its commitment to become a net-zero bank by 2030 and help transition the world into a net-zero global economy by 2050.

As customers adapted to a digital lifestyle, so did HSBC, as it continued to invest in digital innovations helping customers get used to the changing digital landscape. “We have seen our customers appreciate our online and

mobile banking apps, which resulted in increased activations and upsurge in the number of digital transactions in 2020 by 24%. We continue to make Global Money transfers convenient at their fingertips and free of charge*, making our digital channels essential during these times,” shared Peter Faulhaber, Head of Wealth and Personal Banking, HSBC Philippines.

The bayanihan spirit was also evident, not only with HSBC’s programmes to help ease the financial well-being of its customers and the community but also recognized external stakeholders and employees wanting to help rebuild the country and support those who need it most.

HSBC transformed its credit card rewards campaigns to an initiative inviting customers to “pay it forward” and donate their coffee rewards/credit card points

*Global Money Transfers are free of charge to any local beneficiary and any HSBC account globally.

66 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

initially intended for medical frontliners, and later on expanded to a wider community, providing support to those greatly affected by the pandemic.

HSBC partnered with its retail customers and received ~PHP7Mn in donations that helped the medical community, fed the hungry, and made online education more accessible. HSBC also donated ~PHP6M (USD125K) to support impoverished communities and help underprivileged youth to continue schooling through an online distance learning programme. HSBC employees also donated PHP333,000 to Philippine Red Cross for frontline workers.

“HSBC goes beyond offering financial services. We want to create a real impact in people’s lives in all we do, and this recognition is a testament to what we can do for our customers, employees, and the community. Our success is yours too, so we share this win with our customers, employees, and partners, without whom this would not have been possible. As we open up a world of opportunity, we also constantly adapt to ensure that HSBC is a bank fit for the future,” concluded Peter.

In October 2020, HSBC announced an ambitious plan to prioritise financing and investment that supports the transition to a net-zero global economy, with a pledge to reduce financed emissions from the portfolio of customers to netzero by 2050 or sooner.

ASIAN BANKING AND FINANCE | Q4 2021 67

INTERNATIONAL RETAIL BANK OF THE YEAR - CHINA WEALTH MANAGEMENT PLATFORM OF THE YEAR - CHINA

HSBC opens up a world of opportunity for mainland retail customers The bank developed unique international and wealth propositions with a distinctive digital journey.

HSBC supports customers with their banking and wealth needs across about 50 cities in mainland China

M

ainland China’s HSBC has been the ideal partner of internationalminded retail customers. By offering industry-leading solutions and providing seamless, tailored, and secured wealth and personal banking journeys on mobile, HSBC China helps them fulfil their global and sustainable ambitions., 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 open up a world

HSBC China aims to further enhance its digital capability to meet customers’ evolving needs of opportunity for mainland China’s retail customers, to provide greater access to a broader range of wealth management capabilities and value-added services by leveraging HSBC’s unique international resource and franchise. On the digital front, HSBC China is committed to becoming the “bank in customers’ pockets” and creating a seamless journey as they grow their wealth and advance in life stages.

Support international students and their families International Chinese students and their families are one of HSBC China’s most important customer segments. In 2020, the bank has rolled out various banking solutions and services to support them during the 68 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

pandemic.

For example, Future Elite Caring Program aims to fulfill the overseas students’ healthcare and rental needs during the pandemic. A unique China Desk and International Desk team has been set up in five markets, covering the most popular destinations of international education. The team does not only speak Mandarin, but can fully support the needs of the new arrival customers. Besides, the bank has inked third party partnership to broaden its supports and privileges to customers.

The bank has recently enhanced propositions to support Chinese students during their overseas studies with two key pillars. First, the “Overseas University Students Proposition” offers on-the-ground support in the destination country. Second, “Gap Year Proposition” comprises various activities for students staying in mainland China while continuing their international study remotely. The bank plans to roll out “Sea Turtle Proposition” targeting returning and returned students with both banking services, as well as career development supports provided by its partners as a privilege.

By strengthening the International Education services, HSBC China is wellpositioned to provide better support across all three stages of the complete international education journey: pre-departure preparation, during overseas study caring, and future planning.

Pioneering digital solutions to boost wealth business HSBC believes that an integrated hybrid digital and Relationship Manager model is

key to the success of wealth management business in the future. To help customers tackle unprecedented challenges brought about the COVID-19 and minimise its impact, HSBC has rolled out the “Remote Sales Journey” in mainland China, becoming the first foreign bank to enable customers to have in-depth discussions with their relationship managers and product specialists for personalized financial advice via Zoom meeting. Customers can then purchase the related investment and insurance products within the application, right after the conversation.

As a combination of “Informed Choice” and “Self-Directed” journeys, the innovative digital experience brings the best of technology and the relationship manager.

The service is well received by customers in mainland China, and the business outcome is fruitful, too. The “Remote Sales Journey” has contributed more than 20% of total sales counts delivered by Relationship Managers for both investment and insurance as of July 2021. The bank’s wealth management productivity in the first half of 2021 increased more than 50% year-onyear.

HSBC China aims to further enhance its digital capability by leveraging technology and data, to meet customers’ evolving needs by creating a more seamless, personalised and holistic digital wealth experience.

China plays a vital role in realising HSBC’s ambition to become the leading wealth bank in Asia. With its long-term commitment to the local market, HSBC China continues to invest in technology, products, and people. It makes sure that its pursuit for customer excellence is a neverending journey.

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 69

Own your dream home in the Philippines while working abroad Philippine National Bank (PNB) is making it easier for those living abroad to purchase a home in the Philippines. The Own a Philippine Home Loan (OPHL) is a distinct product that provides a home loan to Filipinos and foreigners residing and working abroad. It makes it easier for homebuyers to acquire dream homes in the Philippines. This is a convenient way to apply, book, and pay for loans without the need to fly to the Philippines.

“As they always say, Pinoys love coming back to their roots. PNB’s “Own a Philippine Home Loan” provides a good retirement option for Filipinos abroad. PNB can help them go back to a more comfortable and stable life,” PNB President and CEO Wick Veloso said.

“While many foreigners and balikbayans can rent a property in the country, it may be a good investment to buy a home in the Philippines, especially if you are retiring or planning to stay longer in the country,” Veloso said. Filipinos and those with dual citizenship can purchase all forms of real estate property.

In general, foreigners are prohibited from owning land in the Philippines, but they can legally own a condominium unit for their residence.

Market Coverage Advantage. The overseas market is largely untapped by local banks.

OPHL is developed to tap this market via PNB’s global presence in the USA, Asia, Middle East, Europe, Canada, and Guam.

What do satisfied customers have to say about Own A Philippine Home Loan?

Over the years, PNB has recognized the significant contribution of overseas Filipinos in the economic development of the country through their remittances. As part of PNB’s efforts to provide opportunities to these modern-day heroes, the Bank is continuously improving access to investment opportunities and other financial services.

Here is what clients have to say on PNB OPHL: “We have been an OPHL borrower since it was first offered here in PNB Guam. The OPHL is PNB’s answer to Filipinos who need a loan to purchase their dream home in the Philippines.”

Spouses Jerry and Nancy Aban Guam, USA

OPHL was launched more than 20 years ago and is a distinct product that only PNB can offer overseas through its branches in Los Angeles, New York, Canada, Europe, Guam, Middle East, Tokyo, Singapore, and Hong Kong. Here are some quick facts about this remarkable loan product.

It was quite an amazing experience! I didn’t have to go back to the Philippines to get a loan! Everything was done here seamlessly.

All I did was submit all the basic requirements and they coordinated everything else. During the onset of this pandemic, PNB New York Branch reached out to me and offered me a pandemic relief program that helped me manage my finances in this difficult time.”

What makes the Own-a-Philippine-Home Loan unique?

Anthony “Avina” Mariano New York, USA

Customers of Any Nationality May Apply.

The product’s most salient feature is the eligibility of borrowers.

Natural-born Filipinos, Filipinos residing and working abroad, and non-Filipinos (any nationality) may apply for the loan. Foreigners are eligible but limited to the purchase of condominiums only.

Convenience of Loan. The availability of PNB’s overseas branches where customers are located makes this possible. There is no need to come to the Philippines to apply for a loan. Also, the loan is booked overseas, thus, post servicing and administration will be easy and convenient for the borrowers.

No Foreign Exchange Risk.

Loans are booked overseas in the host country’s currency, making it free from foreign exchange risks (fluctuations).

No Remittance Fees/Charges.

Loan repayment shall be made locally in their respective countries. Thus, there is no payment of remittance fees/charges.

No Co-Borrower / Attorney-In-Fact.

No co-maker is required to vouch for them in the Philippines.

No Age Limit. The PNB OPHL Program has no age requirement in the U.S.

70 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

“Applying for OPHL is one of the best decisions I have ever made! The first thing that struck me about the loan program is the convenience that it offers to someone like me who resides and works in the U.S. I would be able to talk directly with the loan officer here at PNB Los Angeles Branch, in U.S. time during my waking hours, without having to wait for office hours Philippine time. Features such as no remittance charges and the loan booked in US Dollars stood out.”

“OPHL is suitable for us as it caters to Filipinos residing and working abroad. The offer was so unique in terms of interest rates and loan tenures that go well with our financial capabilities and are better than the other bank's offer.

“We have been assisted with exceptional service by the professional staff of PNB Singapore Branch during the entire processing of our home loan until the time the unit was turned over to us. The PNB Own a Philippine Home Loan (OPHL) program exceeds our expectations!”

Ariel & Cecile Ogena Singapore “What I love about OPHL is that it’s designed for Filipinos like me working in Hong Kong to get hassle-free bank financing to own a residential property in the Philippines. It is so convenient that my loan is booked in HK Dollars here at PNB Global Hong Kong, so I don’t have to worry about FX rates when it comes to making my monthly amortization payment.

“I would definitely recommend it to all my peers who are interested in purchasing property in the Philippines.”

Agape Gonzales Hong Kong “My property was almost due for the turnover and I needed to find a Philippine bank to finance my property. I contacted PNB Dubai and learned about OPHL. I immediately received feedback on the same day I submitted my application since I have all the documents available. Thank you, Philippine National Bank! I was able to save money as it is not required to fly to the Philippines for the financing of my property. Also, thanks to PNB Dubai for the Special Rate provided to me for my home loan”.

Marisan Vinarao Mallanao Dubai, UAE

Rhea De Guzman Orange County Sanitation District, CA, USA “At first, I didn't think of getting a place in the Philippines because my family lives in Japan.

However, I realized that when my Japanese husband and I get older, we want to stay in the Philippines for a vacation. I had to search for a bank that could lend us money to pay for the full balance. PNB Nagoya Branch assisted us and we were able to get a housing loan thru PNB Own a Philippine Home Loan.

“The Philippine National Bank OPHL program is always here to support our Filipino brothers and sisters to buy a HOME in the Philippines while working and living in Japan.”

Angelica Shibahara Nagoya, Japan

“Best Mortgage and Home Loan Product for 2020”

2021

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 71

SME BANK OF THE YEAR - CAMBODIA

SME Bank of Cambodia wins SME Bank of the Year at ABF Retail Banking Awards 2021 It was recognised for the SME Co-Financing Scheme (SCFS)

SME Bank of Cambodia team

SME Bank of Cambodia, a recently established state-owned commercial bank, was officially issued a license by the National Bank of Cambodia in late February 2020. It was initially founded by the Royal Government of Cambodia (RGC) under technical and financial support from the Ministry of Economy and Finance (MEF) to provide financing and commercial banking services in an effective and sustainable manner to support Cambodia’s small and medium enterprises.

“Receiving the SME Bank of the Year Award presented in the Asian Banking & Finance Retail Banking Awards 2021 is one of the achievements that wouldn’t happen overnight. I am extremely honoured to represent SME Bank of Cambodia to receive such an important award,” said Lim Aun, CEO of SME Bank of Cambodia. “Without the support from RGC, MEF, and other relevant stakeholders and especially our supportive Board of Directors and hardworking management and teams of SME Bank of Cambodia, we wouldn’t expect such recognition.”

SME Bank of Cambodia announced its soft opening in November 2020 when the outbreak of the COVID-19 pandemic has been taking a toll on the country’s economy.

The bank saw how the pandemic has led to disruption of supply chains and freezing demand limiting the flows of travel, trade, and investment—and these had brought 72 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

immediate interruption in all sectors of economic activity in ASEAN countries, including Cambodia. Hence, to support the SMEs, the bank implemented the government initiative scheme, called the SME Co-Financing Scheme (SCFS), in early April 2020. SCFS allowed SME Bank of Cambodia to closely collaborate with 33 participating financial institutions with a scheme fund size of US$100m. The scheme was a success when it was fully subscribed on 16 October 2020, four months ahead of the closing date.

With the interest rate capped at 7%, the SCFS has benefitted 753 SMEs. “Through the successful implementation of SCFS, SME Bank launched SCFS II in August 2021. Aiming to sustain SMEs’ businesses and preserve jobs amid the COVID-19 pandemic, SME Bank of Cambodia committed to providing another US$100m in financing through SCFS II and, at the same time, promoting participation from financial institutions. SCFS II targets all SMEs in Cambodia both registered and unregistered businesses,” Lim said.

Besides the SCFS initiatives, SME Bank of Cambodia is providing direct financing scheme catering to priority sectors with various products, including products for women entrepreneurs and digital and automation sectors. Interest rate on lending is charged at an affordable pricing.

Differentiated pricing, however, will be introduced for non-priority and unregistered

SMEs in order to encourage SMEs to register in the formal tax regime, thus allowing the Royal Government to have accurate information about the sector so that it can initiate proper supporting policies to enable better access to credit information and other advises to help them grow their businesses and investments.

According to Lim, SME Bank of Cambodia aims to be the leading policy bank that focuses on SMEs cash flow and other alternative credit scoring methods rather than focusing on collateral requirements. “We are fully aware that many SMEs are struggling to obtain loans from financial institutions due to the fact that they have insufficient or no collateral.

For this reason, one important strategy to support more SMEs is through leaning towards implementing non-collateralized loans where loan assessments are based on cash flow rather than collaterals. Another alternative in addition to cash-flow-based lending can be based on behavioural traits of SME clients which correlate with good repayment.”

Given the existing constraint on SME Bank’s distribution capability, the bank is seeking collaboration with other fintech companies to leverage their technology to reach out to SMEs across the country.

Moreover, the COVID-19 pandemic has caused accelerations in digital transformation in all financial institutions.

Likewise, SME Bank of Cambodia is upgrading its digital platforms to provide an end-to-end digital journey for the customers to easily access financing through its digital platforms and at the same time allow its employees to work from home efficiently.

CONTACT SME Bank of Cambodia Plc. Address: Building 30, St. Pasteur (51) Corner St. Prey Norkor (126), Sangkat Phsar Thmei Ti 1, Khan Doun Penh, Phom Penh, Cambodia Telephotne: +855 96 811 1118 Email: info@smebankcambodia.com.

Website: smabankcambodia.com.kh

BUSINESS BANKING RHB Reflex Premium Plus 2020

WIN N E R

Building better

businesses on one seamless platform.

Enjoy seamless transactions for your daily operations - from financial, sales, accounting to people management, you won’t be side-tracked in keeping up with daily processes.

Sign up for RHB Reflex Premium Plus today.

Visit any of our branches Call us at 03-9206 8118

Sign up for RHB Reflex Premium Plus from only RM50 / month* and enjoy an all-in-one financial management solution.

Accounting Solution Manage accounting tasks with total ease.

Sales and Inventory Management Lower operational costs with a wellintegrated POS system.

*Terms and conditions apply.

For further details, please refer to rhbgroup.com/p/rpp.

RHB Bank Berhad 196501000373 (6171-M)

HR Solution Simplify repetitive & mind-numbing HR tasks.

Education Ecosystem Grow your education business & handle administration tasks seamlessly.

CREDIT CARD INITIATIVE OF THE YEAR - SRI LANKA

Standard Chartered Sri Lanka leverages opportunities with customer-centric solutions The bank’s 2By20 campaign won the Credit Card Initiative of the Year in the Asian Banking & Finance Awards

S

tandard Chartered Sri Lanka is different. They look for inspiration in places others overlook; they promote products others don’t focus on, and therefore, they win awards that others do not win. The Bank’s winning campaign for Credit Card Initiative of the Year achieved USD 15 Million in Assets under Management.

The concept of the ‘2By20’ campaign was straightforward. The Bank needed a feebased Consumer Banking Product drive for the year. Therefore, towards the end of 2019, Standard Chartered Sri Lanka designed and proposed the initiative to drive new assets through low-cost channels leveraging on unutilised credit exposure. The target was generating USD 11 Million (LKR 2 Billion) from Loan on Card (Cash from Credit Card) transactions within the year 2020, which also earned the campaign its name.

“Standard Chartered Sri Lanka completed the ‘2By20’ campaign leaps and bounds ahead of our own targets and any competing initiatives. Our teams increased the monthly average Loan on Card volumes over 2019.

Overall the campaign was a huge success contributing to 20% of Consumer Private and Business Banking Net Fee Income and 8% to total Consumer, Private & Business Banking revenue in 2020,” stated Aroshana Fernando, Head of Consumer, Private & Business Banking, Standard Chartered Sri Lanka.

The ‘2By20’ promotion was based on the principles of Customer Centricity, Needbased Solutions, Equal Opportunity and Creating Loyalty & Client Stickiness, with the right product; creating a need to use the unutilised credit line in their Standard Chartered card for a lower cost compared to the Credit Card interest. The campaign witnessed its true potential during the pandemic period when POS spends were low and overall retail spends were declining.

Clients had more expectations from a Credit Card than just swiping the card for purchases.

Standard Chartered was able to promptly respond to clients with ‘need-based solutions’ by way of offering Loan on Card, Instalment Payment Plans and many online Credit Card related facilities and offers.

There was regular management information that highlighted the growing performance of the teams on the ‘2By20’

74 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

campaign. It helped management recognise key performers and to celebrate each milestone, prompting superior performance.

Bingumal Thewarathanthri, Chief Executive Officer, Standard Chartered Sri Lanka dedicated the achievement to the Voice and Virtual teams of the Bank, with their “Never Settle” attitude. “Winning such a prestigious international award for a banking product structured within a set of values from both client and employee perspective is truly

The 2By20 campaign motivated our teams with its outstanding rewards scheme, whilst meeting customer needs at a crucial period in time special for Standard Chartered Sri Lanka, as it stands as an example of showcasing banking acumen without compromising on ethical principles. Whilst we do business in a competitive environment, we are always mindful of customer sentiment as well as the needs of our own teams. The ‘2By20’ campaign motivated our teams with its outstanding rewards scheme, whilst meeting

customer needs at a crucial period in time.

We rewarded our staff based on total new assets they brought in above their individual targets. Motivated to perform, they went above and beyond, and are the true honourees of this recognition,” he said.

Standard Chartered offers a range of Credit Cards to suit different needs.

Not only do they meet financial needs of the clients, but are also customised to their lifestyle. The Bank is dedicated to bringing the best and timely Credit Card offers to clients, enabling them to grow and flourish financially. Credit Card clients benefit from the unique 360° Rewards Points programme and Standard Chartered also ensures their well-being with a complimentary Travel Insurance policy. Credit Card features such as Loan on Card, Easy Settlement Plans and Balance Transfers help clients to meet their various financial requirements, and to restructure their debts. The Bank’s fully equipped Mobile Banking app (SC Mobile) and iBanking channels facilitate many of the Credit Card related functions including obtaining a Loan on Card, applying for new products, notifications on new offers, paying utility bills and credit card enquiries among many other services.

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 75

NEW CONSUMER LENDING PRODUCT OF THE YEAR - HONG KONG CONSUMER FINANCE PRODUCT OF THE YEAR - HONG KONG

With HKT Flexi’s “Buy Now Pay Later”1 experience, everyone can be smart shoppers

Chris Fung, CEO of HKT Flexi Limited

T

hese days, there seems to be an app for just about anything. Now, there’s one that gives you the financial flexibility to shop now, pay later in easy installments and let you better manage your money. It’s called HKT Flexi, and using it couldn’t be easier!

Brought to you by the HKT Group and powered by HKT digital ecosystem, HKT Flexi can leverage on the extensive network and deliver innovative solutions to engage a substantial base of customers, which bring you a fully digital, hassle-free installment shopping experience to suit your preference and lifestyle. You can enjoy the convenience of “Buy Now Pay Later” at HKT’s online and offline channels.

Looking for more flexibility in managing cash flow? HKT Flexi has also partnered with Tap & Go2 mobile wallet to launch Flexi Flash, another digital installment lending service that lets you obtain instant funds upon approval through the HKT Flexi App. With so much convenience in the palm of your hand, HKT Flexi was recently named the New Consumer Lending Product of the Year Hong Kong and Consumer Finance Product of the Year - Hong Kong at the ABF Retail Banking Awards 2021.

Easy-peasy at your fingertips HKT Flexi is committed to empowering you with a 24/7 digitalised user experience and innovative lending services right from your handset—making it easier than ever to get

the financing you need. Just download the HKT Flexi App and set up your account through a simple digital onboarding process anytime.

Once signed up, simply use the HKT Flexi App to apply for 12-month installment services when you buy the hottest smartphones, HD televisions, laptops, and more at designated HKT, 1O1O, and csl stores. “In just a few taps on the app, you can take home your desired gadgets without making full payments upfront,” said Chris Fung, CEO of HKT Flexi Limited.

What’smore,HKT Flexi recentlylaunchedthe ultra-convenient “HKT Flexi 24+1 Installment Plan”3. “Customers can take home the latest mobile handsets and gadgets4 by settling just 80% of the purchase amount spread over the first 24 months and paying the remaining 20% on the 25th month, which adds more flexibility to their cash flow,” said Fung.

“With a strong understanding of what the market needs, HKT Flexi is dedicated to providing customers with our innovative ‘Buy Now Pay Later’ digital financing experience that enables them to shop with ease and smartly manage their spending.’’

Get funding by topping up your Tap & Go mobile wallet in a flash With the Flexi Flash digital installment lending service, getting instant funds topped up to your Tap & Go mobile wallet is quick and easy, helping you better manage your cash flow right on the HKT Flexi App. Chris emphasised how easy it would be to obtain funds with Flexi Flash. “The entire application process, from onboarding to disbursement, can be completed within the app around the clock without the need to visit a store. What’s more, no excessive documents are required. The funds will be

”Buy Now Pay Later” refers to customers settling payments by monthly installment when they purchase products or services, and make repayments regularly at applicable interest rates.

Tap & Go is operated by HKT Payment Limited (Stored Value Facilities Licence No. SVF0002) and subject to its 2. relevant terms and conditions. For details, please call 2888 0000 or visit the website at https://www.tapngo. com.hk/eng/tnc.html. HKT Payment accepts no liability for the quality of or any other matters relating to the products and/or services provided by HKT Flexi.

Customers must make monthly repayments on time to enjoy the full interest rebate of “HKT Flexi 24+1 3.

Installment Plan”, subject to its relevant terms and conditions. For enquiries and details, please visit https:// bit.ly/3bXLh56 The “HKT Flexi 24 + 1 Installment Plan” is applicable for handsets/gadgets with suggested retail price of over 4.

HK$2,000 only.

(Information is provided by HKT Flexi Limited) 1.

76 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

topped up to the customer’s verified Tap & Go account once the application is approved, instantly enhancing their purchasing power.

Customers can then enjoy spending with Tap & Go at over 100,000 physical stores and online platforms.”

He also added that the interface of the HKT Flexi App is easy to use, letting customers check their loan details, as well as past and future repayments anytime. With Flexi Flash, you can now better plan your spending and smartly manage your finances.

Stay tuned for more exciting breakthroughs As more and more financial services, such as deposits, lending, investment, have been transformed from offline to online, and the pandemic has accelerated digital transformation, Chris believes Fintech will be taking on an increasingly important role. “HKT Flexi places a high value on customers’ needs.

Moving forward, we will closely monitor market trends and continue to develop more innovative and diversified financial services through HKT’s online and offline networks, bringing customers greater digital experiences.”

The HKT Flexi App features a simple and user-friendly interface, delivering an innovative and seamless digital financing experience to customers.

(Simulated device screen contents in the device are for reference only.)

HKT Flexi Limited is a money lender licence holder, offering HKT Flexi service which is a mobile financing platform. “HKT Flexi 24+1 Installment Plan” and Flexi Flash services are provided by HKT Flexi Limited through the HKT Flexi brand. HKT Flexi Limited reserves the absolute right to approve your loan application, subject to your credit records and the final submission of all relevant documents. The actual applicable interest rate is determined based on the approval of personal loan application. HKT Flexi subjects to its relevant terms and conditions. For details, please visit the website at https://www.hktflexi.com/en/.

Money Lender’s Licence No.: 0866/2021 Customer Service & Complaint Hotline: 2888 2258

Warning: You have to repay your loans.

Don’t pay any intermediaries.

Visit HKT Flexi website

ASIAN BANKING AND FINANCE | Q4 2021 77

FINANCIAL INCLUSION INITIATIVE OF THE YEAR- MALAYSIA MOBILE BANKING & PAYMENT INITIATIVE OF THE YEAR- MALAYSIA

Alliance Bank helps businesses grow through digitisation

A

lliance Bank Malaysia Berhad is committed to assisting business owners in adapting to the realities of the COVID-19 pandemic and in repositioning for growth once the market recovers. The bank continuously improves its innovative digital solutions, enhances its product propositions, and adopts a multi-channel approach in serving customers.

In July 2020, the bank launched the BizSmart® eTrade solution—Malaysia’s first mobile trade financing submission platform that provides speed and convenience.

Through the BizSmart® mobile app, business owners can submit their Bankers’ Acceptance or Trust Receipts financing electronically without physically visiting the branch. Approved trade proceeds are credited into the customer’s account within 24 hours. Today, over a third of the bank’s business clients submit their trade financing

applications via the mobile app.

Alliance Bank also helps business owners reach out to new customers and access relevant solutions and resources through the BizSmart® Solution portal, launched at the end of 2019. This one-stop business community portal helps small and medium enterprises in seven key areas: (1) manage operational cost, (2) digitise their business, (3) generate new sales, (4) upskill employees, (5) be sustainable, (6) sell globally, and (7) gain access to financing and banking services.

On top of these efforts, the bank also jointly organised over 60 complimentary webinars to provide business insights and networking.

Recently, the Asian Banking & Finance awarded BizSmart® Solution the Malaysia Service Innovation of the Year for its contribution to the SME community at the Retail Banking Awards 2021. At the

Capitalise on Award-Winning Online Trade Financing Anytime, Anywhere.

Fast and Easy Submission

BizSmart eTrade - less paperwork, more time to grow your business. ®

WINNER

WINNER

WINNER

same time, BizSmart® eTrade was named Malaysia Domestic Initiative of the Year and Malaysia Domestic Trade Finance Bank of the Year at the Wholesale Banking Awards 2021, as well as the Malaysia Financial Inclusion Initiative of the Year and Malaysia Mobile Banking & Payment Initiative at the Retail Banking Awards 2021.

Scan the QR code to find out more about Alliance Bank BizSmart® eTrade and BizSmart® Solution. For more information, please visit www.alliancebank.com.my.

Fast Approval and Disbursement

WINNER

MALAYSIA DOMESTIC INITIATIVE OF THE YEAR

MALAYSIA DOMESTIC TRADE FINANCE BANK OF THE YEAR

MALAYSIA FINANCIAL INCLUSION INITIATIVE OF THE YEAR

MALAYSIA MOBILE BANKING & PAYMENT INITIATIVE OF THE YEAR

Asian Banking & Finance Awards

Asian Banking & Finance Awards

2021

2021

Asian Banking & Finance Awards

Asian Banking & Finance Awards

2021

2021

Easy Access and Record Keeping

Scan for more info on BizSmart® eTrade.

BizSmart eTrade is proud to be recognised by Asian Banking & Finance Awards 2021 for excellence in online trade finance initiatives, in Wholesale and Retail Banking respectively.

2021

Alliance Bank Malaysia

AllianceBankMalaysia

AllianceBankMY

Alliance Bank Malaysia Berhad 198201008390 (88103-W) | Alliance Islamic Bank Berhad 200701018870 (776882-V)

DOMESTIC RETAIL BANK OF THE YEAR - THAILAND STRATEGIC PARTNERSHIP OF THE YEAR - THAILAND

Siam Commercial Bank develops financial innovations for every customer segment It was recognised with two wins at the ABF Retail Banking Awards

Ms. Auraratana Jutimitta, Senior Executive Vice President and Chief Retail and Business Banking Officer, Siam Commercial Bank

S

iam Commercial Bank (SCB) is one of Thailand’s leading universal banks, offering a full range of financial services to meet the needs of all client segments. SCB is determined to leverage data and digital technology to continuously develop innovative financial solutions and improve customer experience. These efforts have recently brought the bank two awards from the Asian Banking and Finance Awards 2021.

Domestic Retail Bank of the Year - Thailand SCB “Stand by You” – providing complete financial solutions to serve clients across all segments The year 2020 was very challenging for everyone. With the ongoing COVID-19 pandemic, both salaried and self-employed retail customers have been facing hardships. SCB has been very responsive and committed to alleviating customers’ problems and providing relevant financial solutions to serve their needs.

1. Seamless Digital Onboarding “E-KYC” and Account Opening SCB is Thailand’s first bank to introduce facial recognition technology for identity verification and online savings account opening via the bank’s EASY App. 2. Personalised Payroll Solutions for salaried customers SCB’s top-notch payroll package was designed to provide complete financial services and privileges. Customers can access personalised loan offerings and privileges easily through the EASY App. 3.Comprehensive Solutions for selfemployed or small entrepreneurs, 80 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

covering three major pillars 3.1 Cost Reduction: “ManeeFree Solution” offers no fee for all transactions on digital platforms. “ManeeMungkung”, the only current account which offers the highest interest rate up to 1%.

3.2 Sales Increase: “MaeManee Merchant Application” allows shops to receive payments easily via QR code. The transaction history on this app can also be used to pre-qualify for digital lending.

3.3 Business Expansion: “ManeeTunjai Business Loans” can be approved quickly via the EASY App to offer loans for business expansion.

SCB is determined to leverage data and digital technology to continuously develop innovative financial solutions and improve customer experience For those who need special assistance, SCB has launched both financial and nonfinancial solutions to support all customers.

1. Loan Relief Measures Our customers can select assistance programs (skip payment, reschedule, restructure) via every channel, including the EASY App. 2. Soft-loan Scheme SCB quickly made available soft loans with 2% interest rate and no front-end fee to help boost business liquidity for microentrepreneurs.

3. COVID-19 Insurance SCB launched COVID-19 insurance which can be purchased conveniently via the EASY App 24/7.

4. COVID-19 Self-assessment A free and easy-to-understand selfassessment tool on the EASY App to help our customers determine whether they need to be tested for COVID-19.

5. Tele-consultation Service with Specialist/Doctors SCB offered the first-ever teleconsultation service connecting a health platform to the EASY App, designed to transform hospital visits into online teleconsultations.

Strategic Partnership of the Year -Thailand SCB M: “The First Evolution of Experiential Shopping” featuring the most advanced financial innovations SCB has teamed up with The Mall Group, Thailand’s top-ranked department store, to write a new page in the history of Thailand’s retail shopping business. This collaboration has transformed the shopping experience by developing financial innovations for every customer segment, covering four major areas: 1. “SCB M” Co-branded Cards offering privileges for all shopping lifestyles • SCB M Credit Card: Co-branded credit cards for different customer segments • SCB M Debit Card and Prepaid Card: First debit card and prepaid cards that enable cardholders to earn loyalty points 2. Payment Innovations to provide the most advanced financial technology and cashless digital solutions • Contactless card payment avoiding cash usage and reducing virus risk • SMART EDC to increase efficiency and enable cashiers to provide various payment modes 3. Financial Services: A comprehensive financial solution for shoppers • First-ever retail shopping business that allows customers to purchase insurance: savings insurance, PA insurance, travel insurance, car insurance, income protection insurance, and cyber protection insurance (first in Thailand) • Revolving cash cards and personal loans 4. Retail Technologies to let SCB M cardholders enjoy shopping even more. iReserved Parking, AR Shopping, AI Chatbot on the “Line” messaging application, SelfCheck Out, Smart Kiosks, and E-Vouchers This successful business partnership with The Mall Group has attracted various key players to co-build an ecosystem offering privileges to engage customers in their everyday lives, transforming shopping experience, and allowing them to spend anywhere, such as with Shell, BTS and MRT, Robinhood (food delivery application), and much more.

21

INDONESIA DOMESTIC API PROJECT OF THE YEAR

BCA Cash Management Infrastructure with API takes banking experience to the next level This is part of BCA’s initiatives to support the growth of business players in Indonesia.

BCA continuously strives for innovations to boost digital transformation

B

CA Cash Management, an integrated business transaction solution, offers a comprehensive financial management solution for businesses that covers payable, receivable, and liquidity management.

PT Bank Central Asia Tbk’s (BCA) payable management services include payroll disbursement, payments to suppliers or third parties in various currencies, and utility and bill payments. It also facilitates domestic tax payments, fleet and logistics management, and business expenses payment using corporate credit cards.

For effective and efficient collection, BCA’s receivable management services offer automatic debit/payment instructions, enabling direct online customer transactions through customer’s website/application, effortless payment reconciliation using unique account numbers, and cash pickup services.

Meanwhile, the bank’s liquidity and account management services also provide features such as bulk accounts opening and automatic fund management throughout multiple company accounts. In addition, business owners are able to apply for short-term business loans and invest on short-term instruments such as money market time deposits. These services are provided for BCA’s customers through the BCA Cash Management System.

In line with the fast-paced technological

development amidst the digital era, business players have put a greater focus on and are in urgent need of digital transformation. As a bank that supports the growth of business players in Indonesia, BCA continuously

BCA is committed to providing reliable financial solutions through advanced innovation whilst simultaneously ensuring that our customers can meet the dynamic and progressive opportunities ahead. strives for innovations to boost digital transformation. Moving forward with an open banking strategy is one of such efforts, which then translates into our Application Programming Interfaces (API).

As an infrastructure, API BCA is able to provide a faster, easier, secure and relatively affordable integration through a host-to-host connection basis with corporate systems, accommodating all necessary business banking transaction needs.

API BCA is the first mover in the national banking industry and has been praised by our digital-savvy business clients, especially those who run online enterprises, start-ups, and fintech firms. API BCA helps its business

clients integrate their apps with the banking system in real-time, allowing them to make various transactions more easily, quickly, and securely.

Although the COVID-19 pandemic hit in 2020, BCA continues to improve its Cash Management System through systematic and strategic collaboration with the business customers, for example, stateowned national health insurance. As a result of the collaboration, BCA’s customers are able to enjoy seamless registration for an auto-debit payment facility through its mobile application.

The online auto-debit registration process is a breakthrough improvement that accelerates the previously seven-day registration service level to a real-time process, so customers would not have to go through the hassle by being physically present to submit required documents to the bank.

On the other hand, BCA also implements API technology in the capital market industry by supporting the majority of securities companies through the online Know Your Customer process of potential investors in the Investor Fund Account opening process. They are able to verify the investors for those who already have BCA accounts through BCA API in real-time.

To further strengthen API as a cash management infrastructure, BCA strives to deliver impactful improvements through its features and services. Since its launch in 2017, BCA API has introduced a range of services such as balance information, account statement, fund transfer, virtual account, etc.

In 2020, BCA launched new API services including online auto-debit authorisation letters and domestic bank transfers via switching to support our customer’s needs in the rapid digitalisation era. By December 2020, approximately 450,000 customers had been utilising the BCA Cash Management System to support their cash management transactions. BCA is always committed to providing reliable financial solutions through advanced innovation whilst simultaneously ensuring that its customers can meet the dynamic and progressive opportunities ahead.

BCA, always by your side.

ASIAN BANKING ASIAN ASIANBANKING BANKING AND FINANCE AND FINANCE FINANCE | DECEMBER || Q4 Q3 2021 2020 81

SINGAPORE INNOVATIVE DEAL OF THE YEAR SINGAPORE DEBT DEAL OF THE YEAR CHINA DEBT DEAL OF THE YEAR SINGAPORE SYNDICATED LOAN OF THE YEAR

UOB Investment Banking leads in the APAC region, opening doors to business The bank established its position as a market leader in the Asia Pacific region with extensive capabilities across various Investment Banking products.

Innovative Deal of the Year - Singapore for the Perennial REH Limited deal UOB played an instrumental role in originating a multi-product solution for the offeror comprising M&A advisory and a comprehensive financing solution for the target including backstop loan facilities as well as private placement of bonds.

Debt Deal of the Year - Singapore for the CapitaLand Treasury deal The deal garnered a final order book of over S$1.2b, which enabled a significant price tightening of 22.5 base points from the initial price guidance. Additionally, the deal represents the joint largest bond issue from a local real estate issuer in the last 20 years.

Edmund Leong, Head of Group Investment Banking, UOB

The UOB Investment Banking teams originate event-driven opportunities, provide financial advisory and structure, and arrange and underwrite financing across the capital structure spectrum

T

hrough our strong network of over 500 branches and offices globally, UOB Investment Banking offers a wide range of financing and advisory solutions in the Asia Pacific. We connect our clients across the region through strategic advice, bespoke financing and capital raising solutions, and execution excellence with a team of highly experienced bankers.

Discovering regional business and investment opportunities with our industry specialisation and expertise, we stay committed to opening doors to Asia. The UOB Investment Banking teams originate event-driven opportunities, provide financial advisory and structure, arrange and underwrite financing across the capital structure spectrum.

We have established our position

82 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

as a market leader in the Asia Pacific region with extensive capabilities across various investment banking products – corporate finance, debt capital markets – syndicated loans and bonds, leveraged finance, infrastructure project finance, equity capital markets, and mergers and acquisitions (M&A). With seven public M&A transactions in Singapore in 2020, we lead the 2020 M&A adviser league table in Singapore in terms of deal count.

UOB has maintained a Top 3 position across various Syndication Loan league tables in Southeast Asia over the past few years and has a firm Top 3 standing in the SGD Bond Market.

UOB is honoured to be awarded and recognized for the following awards.

We would like to thank our clients for the continued support and the teams’ contribution to UOB’s endeavors.

Debt Deal of the Year - China for the CMB Leasing deal The dual-tranche transaction was the largest issue size amongst leasing companies during the year and the lowest issue yield among its past issuance. Additionally, it achieved the greatest tightening from Initial Price Guidance to Final Price Guidance amongst its past issuance.

Syndicated Loan of the Year - Singapore for the PT Bank Rakyat Indonesia deal Acting as sole coordinator and mandated lead arranger, bookrunner and lender, UOB demonstrated our strong transaction execution and distribution capabilities by successfully coordinating and syndicating the facility to a group of international banks in the midst of a volatile market backdrop brought upon by the global pandemic. Guided by a clear syndication strategy, the transaction garnered strong response from the international syndication market leading to a heavy oversubscription.

This reaffirms UOB’s commitment to client relationships to deliver solutions with our strong market reach. This transaction has raised UOB’s profile in the syndicated loan market for Indonesian borrowers.

Project Infrastructure Finance Deal of the Year - Malaysia SHC Capital Sdn Bhd MYR80.0 million district cooling Sukuk

ASIAN BANKING AND FINANCE | Q4 2021 83

21

TAIWAN DOMESTIC REMITTANCE INITIATIVE OF THE YEAR

Bank Sinopac bags Domestic Remittance Initiative of the Year at the Wholesale Banking Awards The bank’s Integrated Cash Collection and Cross-Border Remittance provide streamlined and cost-efficient services for Foreign Worker Agencies. resources for remittance has now become more efficient and affordable. Through the efforts of the Bank and the agencies that cooperated, migrant workers feel more secure about sending their money back to their families in their hometown.

“This Award has proved and certified Bank Sinopac has established professional financial services to our target customers.

We will continuously keep our good performance as we want to be the best partner for Foreign Workers Agencies and migrant workers in Taiwan,” they said.

For other worker or business sectors, Bank Sinopac has also planned on providing new cash services for insurance and securities companies, in order to make their cash collection process easier and cost-efficient.

Bank Sinopac Taiwan Team

O

ne of the main concerns of migrant workers in Taiwan is sending their money back home in a cheap, safe, and convenient way. Considering that this is their hard work, they should at least be granted a hassle-free remittance process.

There are currently over 710,000 migrant workers served by over 1,000 Foreign Worker Agencies. For these agencies, the more comprehensive their services are and the more they meet migrant workers’ requirements mean more business and satisfaction for clients.

However, such volume is bound to have problems. Bank Sinopac found three major pain points in the remittance process of migrant workers: language barrier, fraud risk, and high remittance fees.

“Compared with banks, the agency has less language barrier with migrant workers.

Therefore, if Foreign Worker Agencies are willing to cooperate with banks, the agencies could combine all remittance requests from migrant workers as one single batch cross-border remittance instruction and link with our beneficiary bank networking, making the cross-border remittance more convenient,” Bank Sinopac said.

As such, the Bank has implemented its Integrated Cash Collection and CrossBorder Remittance services, which has been proven to be beneficial for all its

84 ASIAN BANKINGAND ANDFINANCE FINANCE| | DECEMBER Q42021 2021 2019 ASIAN BANKING Q3

stakeholders.

Bank Sinopac’s services provide streamlined and cost-efficient services for Foreign Worker Agencies, which leads to top-tier Foreign Worker Agencies moving their transactions to Bank Sinopac to enjoy the benefits provided by its services. These also allowed the Bank to see a significant increase in the market size of its migrant workers’ remittances from 2019 to 2020, despite the effects of the global lockdowns.

They noted, however, that since such service involves several regulations, it takes a lot of work for banks to meet all the regulations. Bank Sinopac completed lots of system development in order to provide the streamlined end-to-end service, which has also established the competitive advantages that its competitors are having difficulty to imitate in a short time.

The comprehensive services by Bank Sinopac made it stand out amongst the major banks in Taiwan, to win the Domestic Remittance Initiative of the Year - Taiwan award at the recently-held ABF Wholesale Banking Awards.

What used to take a lot of time and

Bank Sinopac Taiwan

Bank Sinopac will continuously keep our good performance as we want to be the best partner for Foreign Workers Agencies and migrant workers in Taiwan

ASIAN BANKING AND FINANCE | Q4 2021 85

EVENT COVERAGE: LEXISNEXIS WEBINAR

Mitigating risks and ensuring regulatory compliance through Nexis Diligence Nexis Diligence, from LexisNexis allows organisations to access extensive business intelligence through a convenient single interface to conduct enhanced due diligence and background checks. trying to reduce costs involved in screening high volumes of entities,” says Wong.

A

s the world faces everincreasing global risks and uncertainties arising from third parties, organisations are compelled, more than ever, to protect their businesses and ensure due diligence is met.

This is especially true within the financial services industry since it has been even more vulnerable to threats of fraud, money laundering, bribery and corruption, as nearly every business accelerated their shift to online transactions when the news of the COVID-19 pandemic hit.

In 2020 alone, it was found that there were over 1,230 fintech apps available in APAC, and marketers have spent US$244m to acquire new users.

Ms. Evangeline Wong, Vice President Asia Pacific Sales of LexisNexis, observes that whilst the digital shift was a blessing for financial institutions (FI) and consumers who were limited in their ability to have face-to-face interactions, it piqued the interest of fraudsters, money launderers, and other cybercriminals looking to take advantage of the digital influx.

“How can companies develop strategic international business relationships while mitigating these 86 ASIAN BANKING AND FINANCE | Q4 2021

Nexis Diligence empowers organisations with access to critical resources that allow them to conduct enhanced due diligence and business background checks

bribery and corruption risks? The most important step is to understand the level of risk posed by the third parties your company relies on,” Wong says.

Bribery and money laundering Around $2.45b fines were issued for bribery under the US Foreign and Corrupt Practice Act in the first half of 2020 alone, with the companies suffering not just from legal and financial penalties, but reputational and strategic damages, as well.

At the same time, that a lot has changed since governments first began to address issues of money laundering. Several key factors have appeared to expedite anti-money laundering (AML) legislation, as the digital age increased the volume and velocity of businesses conducted globally and introduced new means to transfer and exchange money.

These factors have driven AML legislation up the global governmental agenda, leading to all-around efforts to reduce the risk of money laundering.

“From the outside, regulatory requirements are expanding and there is a heightened demand for supply chain transparency to demonstrate environment, social, and governance compliance. From the inside, FIs are

Addressing risk exposures with Nexis Solutions Banks and FIs, as well as regulators, have formalised screening news articles as a key step in mitigating business risks.

As such, compliance leaders can effectively use adverse news checks as an asset for risk reduction by treating it as an essential due diligence component and executing it efficiently.

The LexisNexis media archive enhances compliance checks for two main reasons. With a news archive that goes back 40+ years, organisations can uncover past risk-related news.

LexisNexis aggregates content from 60,000 sources, including global, regional and local news, industry sources and more.

Through its due diligence research platform Nexis Diligence, LexisNexis empowers organisations with access to critical resources that allow them to conduct enhanced due diligence and business background checks including screening against watch lists, over one million politically exposed persons, over a thousand sanctions lists, all from one convenient source.

With its easy user interface, Nexis Diligence also offers access to international court cases to keep organisations informed of ongoing litigation that could disrupt business and to support compliance programs to address anti-bribery regulations.

The Report Builder within Nexis Diligence makes it easy to capture a verifiable audit trail to help demonstrate compliance efforts.

The flexible solution also offers an optional Robotic Process Automation integration of Blue Prism digital workforce within Nexis Diligence, freeing up human resources for highvalue analysis and decision-making.

Discover greater opportunities with our complete financial solution across ASEAN

Your strategic partner to grow your business CIMB Niaga is the award winner at Asian Banking and Finance Awards 2021 for :

14042

www.cimbniaga.co.id

PT Bank CIMB Niaga Tbk Terdaftar & Diawasi oleh Otoritas Jasa Keuangan Serta Merupakan Peserta Penjaminan LPS ASIAN BANKING AND FINANCE | Q4 2021 87

EVENT COVERAGE: SAS WEBINAR

How to combat fraud in a hybrid banking environment Financial organisations are called to take the offensive against fraudsters with the use of anomaly detection and analytics.

I

t’s time for the financial industry to turn the tables and stop playing catch-up to fraudsters using advanced analytics and anomaly detection technology, industry experts told attendees of the webinar ‘Fraud surveillance in today’s hybrid banking environment’ co-hosted by SAS and Asian Banking & Finance on 23 September.

Over 190 bankers, financial leaders, and tech experts from all across Asia gathered together to learn more about modern fraud tricks and the best ways to combat fraud in their organisations.

Dr. Steve Bennett, Director, Public Sector and Financial Services Practice at SAS kicked off the webinar with a presentation on how fraudsters are taking advantage of peoples’ cognitive biases to hoodwink them.

“People are very risk averse, when they’re talking about gains, and they’re very risk seeking when they’re talking about trying to avoid a loss. And this really destroys rationality when people need to make decisions when data or information is uncertain,” Dr. Bennett told the over 190 participants of the webinar.

Dr. Bennett emphasised the role of

Two-factor authentication and real-time transaction blocking are not enough to combat the changes in the fraud landscape

anomaly detection and analytics in combating these subconscious biases of people and helping them make rational choices, and in turn combat fraudulent activities.

As an example, he shared how SAS worked with India’s National Health Authority to help detect fraudulent claims and activities for India’s national program of health benefits. They made use of anomaly detection, artificial intelligence, and computer vision (looking at photographs and patient records) and detected thousands of anomalous claims to the tune of around $10m.

The numbers at stake are even higher in the financial industry; in the US, financial institutions lose hundreds of millions of dollars yearly due to social engineering tricks employed by fraudsters. In Singapore, close to $200m have also been lost by local institutions over the past 10 years due to fraud—and the recovery rate is only 35%.

So how do you build a strong antifraud system from the ground up? Dr. Bennett has one key advice to offer: start small.

“The good news about advanced

analytics and AI is that it’s possible to start small. In fact, we usually recommend that often when institutions say, ‘we’re going to change everything all at once, we’re going to enterprise wide revisions of how we do fraud detection’—often those are the analytics projects that fail. It’s often better to start small: pick a small problem, with a manageable data set that you can work on for a few months at low cost, and prove value,” Dr. Bennett said.

Break away from one-channel focus Manisha Khanna, Head of Financial Services, Customer Advisory at SAS Singapore, noted that organisations in Singapore have sunk in a large amount of investments to upgrade their tech over the past few years—but added that they have been very focused on just one channel, and not exactly for combating fraud risks.

“Investments have gone to technologies like two-factor authentication and real-time transaction blocking. But they are not enough to combat the changes in the fraud landscape, because now fraud is going across channels,” she warned.

The biggest challenge, according to Khanna, is that there is still a lot of legacy in banks.

“Many organisations still see digital fraud as a channel-specific problem,” she said. And the reason for this is legacy. They are already specific point solutions, which only look at, let’s say, card fraud, or an internal banking fraud. Perhaps there’s a need to step back and see how all of these fraud attacks can be addressed more holistically.”

United we stand Alex Kwiatkowski, Advisory Industry Consultant, Global Banking Practice at SAS, theorised that banks may now want to speak openly with each other, in private, about the fraudrelated challenges their organisations are facing. “The attitude now is, we are much stronger when we share this knowledge amongst ourselves, because then we can identify anomalous patterns, then we can start to make some adjustments, tightening up where there’s been vulnerabilities,” Kwiatkowski said.

88 ASIAN BANKING AND FINANCE | Q4 2021

ASIAN BANKING AND FINANCE | Q4 2021 89

EVENT COVERAGE: SAP VIRTUAL ROUNDTABLE

How financial firms can take climate action beyond CSR campaigns 52% of banks now view climate change as a key emerging risk in the next five years, higher than 37% in the previous year SAP outlines three strategic imperatives for managing the climate crisis.

T

he worsening climate crisis is undoubtedly being felt across the globe. Sustainability drives are being thrown left and right by governments and businesses in every industry, even finance, to pitch in mitigating climate change.

In a virtual roundtable, hosted by Asian Banking & Finance, SAP gave a closer look at how climate-related challenges hit financial institutions, as well as shared its expertise in managing climate risks with its technology and environmental, social, and governance (ESG) solutions.

Hadi Wijaya, financial services industry leader, South East Asia, SAP, said that for the first time the top five global risks are all related to climate change.

Hadi said that the growing concern amongst banks is evident as 52% now view climate change as a key emerging risk in the next five years, much higher than 37% in the previous year.

Banks are also increasingly responding to demands around sustainability through corporate purposes.

90 ASIAN BANKING AND FINANCE | Q4 2021

For the first time, the top five global risks are all related to climate change

Managing Climate Risk In light of this, Hadi outlined three strategic imperatives for managing the climate crisis, identified by SAP – safeguarding the business from uncertainty, financing a green agenda, and focusing on the enablers.

He explained the first one is concerned about managing the financial exposure and protecting and preserving their business value.

The second look into ways in which financial institutions can tap into the opportunities in the green market; whilst the third is about building enablers, a key role of SAP. “As digital solution providers for close to 50 years, we’ve been running the most critical business processes across the supply chain and industries,” he said.

“We enable them from the front-office operation, like in sales, marketing, customer experience, to middle-office, product management, and core banking, and also to the back-office operation like accounting, finance, risk, human resources, and procurement.”

Over 16,000 financial services companies, run with SAP and 97% of

banks named in Forbes 2000 used the SAP in their system, as well.

SAP uses a holistic strategy, which it calls the Intelligent Banking Enterprise, to advise its clients. The strategy seeks to help companies digitise and integrate cross-company business processes, and address complex challenges in business, social, and environment.

It also provides a business technology platform for integration, innovation, and extensibility, and cloud infrastructure that allows banks to scale the system landscape.

“So overall, this holistic strategy helps our banking customers not only to manage climate risk today, or in the next 10 years, but also to deal with a broader disruption in the industry,” Hadi said.

Walking the talk But this is just one of SAP key roles, as he had highlighted, the company is not just an enabler, it is also an exemplar.

He noted that SAP’s push towards sustainability started a decade ago, during which it launched greed cloud to power data centres, and zero waste initiatives amongst others.

Andrew Chan, PwC’s South East Asia Consulting Services Sustainability & Climate Change leader, observed “We’re seeing commitments from businesses’ realisation that we need to take more of a lead on climate change and societal issues. And what we’ve seen in the region in particular, are paradigm shifts,” he said during the roundtable discussion.

As a value integrator, PwC’s Sustainability practise helps organisations plan, source, deliver, finance and measure the wider impact of products and services.

PwC uses a spectrum that scales the sustainability ambition of financial institutions in their ESG journey, beginning with sceptics, pragmatists, strategists and idealists.

ASIAN BANKING AND FINANCE | Q4 2021 91

OPINION

ONG, KUMAR

The next pedestal of the payments war for banks and FIs: Buy now pay later

T

here have been significant moves in this space in recent years, with major BNPL provider Klarna recently valued at over US$45b, Australia’s Afterpay purchased for US$29b by Square, and major FinTech firm PayPal also entering the space. BNPL is expected to represent 12% of all e-commerce sales across Asia Pacific (APAC), North America, Europe, and Australia by 2023, up from 2% today. 80% of all BNPL transactions will be completed online in mature markets, with a doubling of growth for in-store BNPL purchases. With low penetration today due to lack of customer awareness and limited availability of financial providers, APAC is expected to be the next growth story with a remarkable 145% CAGR projected to 2023. Banks are being left behind by fast-moving FinTechs, and it’s critical they prepare for the second war on payments—BNPL.

CHING-FONG (CF) ONG Managing Director and Senior Partner, SEA Leader for DigitalBCG Boston Consulting Group SUMIT KUMAR Managing Director and Partner Boston Consulting Group

Buying in to BNPL in Southeast Asia The region’s retail sales market is expected to expand from US$374b to US$457b by 2023, with online sales increasing 44% annually to represent 20% of total sales by 2023.

With attractive market demographics and early signs of accelerating adoption it’s expected that Southeast Asia’s addressable market will be as high as US$27b by 2023, with a projected BNPL net revenue of ~US$1.5b. Market penetration of 6% is projected to be double that of the wider APAC region. In countries like Indonesia, surveys show a whopping 78% of respondents expressed familiarity with BNPL and its advantages.

Funding in Southeast Asia is already outpacing APAC, driven by investments in Singapore and Indonesia. Southeast Asian BNPL FinTech companies attracted 30% of total APAC BNPL funding between 2016-2020, 10% of the global total. That investor confidence is seen in companies such as Akulaku, FinAccel, and Redivo.

Mature BNPL markets such as Australia offer valuable insight into Southeast Asia’s potential.

Rapid market growth has seen an estimated 20% of Australians using BNPL, and approximately 60% of merchants offering the service.

The regional landscape is relatively fresh in Southeast Asia, but FinTechs such as Atome and Hoolah are expanding to target both offline and online merchants, enjoying rapid growth in transaction values. Open ecosystem players such

92 ASIAN BANKING AND FINANCE | Q4 2021

as Akulaku and a Traveloka-Bank BRI partnership are exploiting BNPL services as part of evolving ecosystem offers. E-commerce players like Shopee are introducing BNPL as part of standard features.

Meanwhile, credit card companies and banks are exploring partnerships with winners from other markets such as Pine Labs.

Key areas of BNPL to watch Establishing the right model will require a strategy that reflects the local landscape and rapidly evolving market conditions.

Offline sales still represent the majority of sales volume, thus scaling together with offline merchants is key. Challenges such as integration hurdles, secure customer information, educating customers in-store, and maintaining positive user experience during lengthy application processes must also be overcome.

Regulation is also likely to tighten, as early plays by technology companies increasingly come under the review of financial authorities. Consumer groups in Europe and Australia are already pushing for greater oversight of unregulated BNPL lenders around AML, KYC checks and fraud protection.

In addition, BNPL players will have to develop sustainable methods for revenue generation—while merchant-linked fees are a good way to start, we believe such fees will reduce over time. Players need to build consumer financing leveraging BNPL transaction data, coupled with value-added services such as advertising or bill payments, for a long-term model.

The success of BNPL in India offers some interesting lessons on this evolution, with four broad operating models emerging in the market.

Pureplay FinTech players such as Zest are targeting underbanked segments, serving customers without credit cards with rapid-turnaround approvals.

Customers opt in at online or offline checkout pages, with credit risk analysis undertaken by lending partners.

Consumers opt in to BNPL through the inecosystem checkout page. Point-of-sale (POS) aggregators such as Pine Labs leverage in-store POS systems to drive BNPL growth. Pine Labs operates on over 450,000 POS systems across 150,000 merchants, backed by 35 banking partners. Customers can conveniently sign up to BNPL at the point-of-sale, with credit risk undertaken by partner banks.

ASIAN BANKING AND FINANCE | Q4 2021 93

OPINION

IRENE XU

Open banking set to transform the finance sector

T

here is a revolution going on today in the banking industry. Those bastions of privacy and money management are doing the unthinkable - with consent, they are sharing their customer data with approved third parties. In the past, banks jealously safeguarded their clients’ information. That is what clients expected of them, as well as it being a regulatory obligation. Today, they are making this information available to other players in the financial services arena, creating an unprecedented financial ecosystem built around making their Application Programming Interfaces (APIs) available to approved third parties.

Known as “Open Banking”, this is a global movement, supported by governments and regulators worldwide. This huge, transformative shift is radically changing the way banks approach business models for continued growth, customer’s choice and convenience, and financial inclusion under the digital economy.

IRENE XU Director of Banking Practice, SAS

Open banking enhances customer service The collaboration brought by Open Banking allows banks and financial institutions to gain more insights by securely sharing customer account or transaction data with third-party stakeholders – with customers’ permission. This can be used to provide more personalised recommendations to customers based on real-time, data-based insights. For consumers, it provides more options in making payments with improved convenience and benefits – for instance, by enabling them to easily keep track of their balances and outgoings.

There’s added value for third parties too. For example, as merchants process the transactions there will be no interchange or scheme fees, or chargebacks. Not only does this make the processing seamless and quicker, but it also lowers the overall operational cost for the business. Some of these savings can be translated to better pricing for consumers too, so it’s Win-Win-Win for all in this new ecosystem.

The third-party service providers accessing the customer’s data with their permission could include insurance companies, utilities, retailers, e-commerce marketplaces or even travel firms and food delivery services. Consumers can easily check how much they spend on groceries, make a comparison of health insurance costs, and review their car loan or mortgage payments. They can personalise price comparison websites and easily make direct payments from their bank account.

94 ASIAN BANKING AND FINANCE | Q4 2021

Benefits for SMEs Open banking enables businesses to improve and speed up their operations. Small and medium enterprises (SMEs), for example, traditionally face extreme difficulty in accessing finances. SMEs are often associated with higher risks, insufficient credit history, lack of collateral, and higher transaction costs — about 50% of small business loans get rejected. Not only that, the lending process is rather laborious and time consuming, thus it is a lower priority for the bank but a huge pain to the SMEs. Now, the AI that powers open banking will bring significant changes that deliver distinctive customer experiences. Together with the use of APIs and automation, banks can aggregate all the information that exists on the applicant’s banking history, from all sources, and improve their credit assessment. The turnaround time will shorten from two to three weeks under the legacy process to as little as two to three days.

An example is the “Mizuho Smart Business Loan” services for SMEs, the first of its kind in Japan market.

Advantages to banks For banks, Open Banking means gaining access to incremental data about their customers and working in partnership with players in this new ecosystem.

This will tremendously improve their ability to deliver accurate credit assessments, offer more risk-based pricing at a personalised level, design better products and services, reduce false positives in fraud detection and deliver frictionless customer experience. The key is analytics and AI. The trend is global, but it is being activated in different ways. In the EU, UK, Korea, Australia and India governments are looking to stimulate competition by mandating banks to open up their troves of account data to other companies. In the US and China, the movement is market-led, with companies setting up open banking relationships among themselves.

Singapore is following a blend of these two models, under the regulation of the Monetary Authority of Singapore (MAS). MAS is encouraging banks to open up and expand their data and services through APIX, an API guidance and collaboration platform. This is intended to pave the way for more openness in the financial services sector. Singapore banks are eagerly embracing the opportunities, actively using APIs to become an integral member of third party ecosystems or building their own marketplaces.

HSBC Wealth & Personal Banking A truly Relationship Managed Bank in Bangladesh

Supporting individuals in Bangladesh to get the best out of personal banking and connecting to opportunities overseas.

International Education

Non-Resident

Bangladeshi Services

Dual Currency Debit Card

To know more visit: hsbc.com.bd

ASIAN BANKING AND FINANCE | Q4 2021 95

OPINION

BRENDAN CARNEY

Accelerate the digital banking evolution and move ahead of the curve

T

he roadmap to success for many organisations has been defined by digital transformation.

Since the COVID-19 crisis started, organisations across many industries had to accelerate and redefine their plans to keep pace with the dramatic changes in the business landscape.

In a recent KPMG report, a global survey of 780 leaders across 12 sectors showed that 67% of leaders had accelerated their digital transformation strategy, and 63% had increased their digital transformation budget.

The pandemic not only converted many non-digital natives to digital users, it also spurred existing digital users to deepen their engagement with e-commerce, mobile banking, and super apps or ‘lifestyle platforms’.

In banking, the digital revolution is not coming, it is already here. At Citibank Singapore each day, for every customer who visits one of our physical locations, we see 250 customers visit our mobile app. And less than 1% of our financial transactions take place in branches today. The dominant channel for customer interaction today is mobile banking, period.

Leveraging data to hyper-personalise the mobile banking experience for our customers, offering services and solutions in an intuitive, contextual, and secure manner, is a key ongoing challenge for all banks.

BRENDAN CARNEY CEO, Citibank Singapore

Future of banking So, what is the future of banking? One proposition is that embedded finance is the future. Embedded finance is the increasing trend where non-banks, say telcos or e-commerce companies, provide financial services (payments, lending and insurance) to their customers through apps with which they already actively engage.

Fintechs and big techs through their superapps are creating “sticky” platforms that hold customers’ time and attention and have the power to integrate products that benefit its community as well as its core business.

The big question here is that of trust: it’s one thing to fund a small amount of money to a digital wallet for convenience, but it’s quite another to hand over your life savings to an unproven digital player with no track record.

One option banks have is developing Banking-as-aService (BaaS) business lines. This means either white labelling or co-branding financial products that can be bundled for non-banks to embed and distribute in their apps.

In response to embedded finance, some banks may

96 ASIAN BANKING AND FINANCE | Q4 2021

choose to continue leveraging on fintechs that have reached a ubiquitous status in the lives of consumers to offer more financial products and services. To stay ahead of the curve, financial institutions must look deeper into the behaviour of the new digital customer, and adapt quickly to cater to their needs. According to McKinsey, highly personalised customer experiences drive up both customer loyalty and the top line. In their May 2021 report on “Building an AI Bank of the Future”, it showed that Artificial Intelligence (AI) and analytics could provide up to $1 trillion dollars in added value a year for banks.

‘Staying ahead of the curve’ Customer behaviour has consistently shown us that integration into ecosystems or platforms continues to be one of the enablers to riding the next digital wave. The pervasive use of Application Programming Interfaces or APIs, which allows various applications to communicate with each other, is another enabler of change. Banks with developer portals, tap on the greater developer community to consume their APIs and improve on products and services. But the ecosystem play doesn’t end there. A robust API strategy coupled with open microservices architecture will help banks evolve into more agile organisations that are able to respond to customers’ pain points with speed and simplicity.

In line with this, delivering best-in-class products and services through partnership ecosystems and a mobile-first strategy became an integral part of Citibank Singapore’s digital transformation effort.

Many years ago, the bank pioneered card partnerships with SMRT, Lazada and M1, and today, we continue to curate meaningful experiences for customers particularly in the payments, lending and investments space. With the Citi Mobile® App, we ensure that offers are tailored to the individual’s needs based on their product holdings and profiles; providing customised information on investments, AUM top up, insurance, cards or payments by instalment. Currently, about 75% of our customers engage with us on the mobile app and our overall digital net promoter score increased by close to 10% compared to the previous year.

For banks to win in a new world that is being shaped by consumers who want financial services to be simpler, smarter, and more personal, they need to operate at the speed of their customers’ increasingly digital lives.

ASIAN BANKING AND FINANCE | Q3 2021 3