Hong Kong’s mobile banking is the joint best in Asia and fifth worldwide, with the Covid-19 pandemic acting as a catalyst to speed up the development of digital banking in the city, according to a global study.
The 17 mobile banking apps in the city scored 56 points, tying with Belgium and Singapore for fifth place, according to management consultancy Sia Partners’ 2022 Mobile Banking Benchmark. The Netherlands was placed first with a score of 66, followed by the UK on 65, Spain on 63 and Italy on 60.
The report looked at 85 criteria including functions, user experience and clients’ opinions to assess 151 mobile banking apps in 22 markets, with each getting a score from 0 to 100. The Post got an exclusive preview before the report’s publication later this month.
“Hong Kong mobile banking standards showed a significant year-over-year improvement in 2022 and are catching up with Western peers,” said Jeremy Fetiveau, associate partner in Sia Partners’ Hong Kong office. On average, the scores gained by Hong Kong mobile apps this year rose 18 per cent from a year earlier, reflecting a better user experience and more functions.
“Traditionally, Hong Kong consumers rely on both physical cash and retail banking branches. However, due to several catalysts such as massive branch closures during the fifth wave of Covid-19 earlier this year and the government’s fintech push, mobile banking in Hong Kong has improved substantially,” Fetiveau said.
Some 600 of the 1,100 bank branches in the city were closed at the peak of the fifth wave in March this year, forcing consumers to shift to digital banking.
Fetiveau said while Hong Kong and Singapore are currently at the same stage of their mobile banking development, Hong Kong scores above its regional rival in virtual banking.
Hong Kong’s eight virtual banks have been operating for two years while Singapore’s four virtual lenders only started in the past few months. Virtual banks do not have physical branches, instead offering online-only banking services.
Hong Kong’s eight virtual lenders have 1.6 million account holders, with HK$25 billion (US$3.2 billion) in deposits and HK$11 billion of loans, according to the latest data from Hong Kong Monetary Authority, the city’s de facto central bank.
“Hong Kong can overtake Singapore with improved levels of user experience, developed beyond banking journeys, and end-to-end mobile app customer journeys to access investments, insurance and credit,” Fetiveau said.
However, Hong Kong may lose out in terms of talent, he warned, as the city still has Covid restrictions while Singapore has removed all such requirements.
“With Hong Kong competing with Singapore for tech talent, it remains to be seen how the impact of Hong Kong’s closed borders, and a massive corresponding talent exodus, will impact the local fintech environment,” Fetiveau said.
In terms of individual bank rankings, Hong Kong’s ZA Bank , Mox Bank and Hang Seng Bank took the top three spots in Asia, followed by Singapore’s DBS in fourth place. However, none of them featured in the global top 10.
“We expect at least one of the three Hong Kong mobile banking apps to break into the global top 10 within one or two years,” Fetiveau said.
Globally, UK-based Revolut Metal, which operates internationally, ranked first with a score of 83. Traditional banks Intesa Sanpaolo of Italy and Belgium’s KBC, last year’s winner, took second and third place, respectively.
Hong Kong mobile banks scored high on user experience but still lag behind Western peers, according to Stephen Walsh, senior consultant of Sia.
“Some top European banking players allow their customers to purchase movie tickets or train tickets directly on their mobile banking app,” Walsh said. “This in turn allows the bank to glean important insights into their customer’s lifestyle habits, enabling more refined targeted offerings.”
This article was first published in South China Morning Post.