Fintech seen as a key priority for Hong Kong’s banking sector, while the outlook for 2018 continues to look robust, finds KPMG report.
KPMG’s 2018 Hong Kong Banking Outlook highlights that a stabilising market environment in 2017 and a number of upcoming opportunities, particularly for fintech, is set to provide a strong foundation for Hong Kong’s banks.
Paul McSheaffrey, Partner, Head of Banking and Capital Markets, Hong Kong, KPMG China, says: “2018 will be the year where fintech goes mainstream in Hong Kong. We appear to have reached a tipping point where the adoption of fintech and other technologies across all aspects of banking has become a priority issue on the boardroom and executive committee agenda. This trend is likely to drive the industry towards making a step change in the adoption of fintech in the next 12 months.”
Closer collaboration between financial institutions and fintech firms is expected in 2018, as banks continue to seek to digitise and adopt advanced technologies to improve their product and service offerings and increase efficiency, KPMG forecasts.
There are a number of positive initiatives and developments in 2018, the report highlights. These include a single point of entry for piloting trials of fintech products by linking the sandboxes between Hong Kong Monetary Authority, the Securities and Futures Commission and the Insurance Authority; the emergence of open banking is expected to further promote innovation and collaboration between banks and fintech firms. Banks are also assessing the use of robotics to automate processes, streamline operations and increase efficiency, primarily throughout their back and middle office functions.
McSheaffrey adds: “A key focus for banks in 2018 will be on developing their people and talent programmes to attract and retain the right skills. We are starting to see banks set up digital communities and help their teams understand the intricacies and benefits of working alongside a bot.”
Regulatory and compliance remains a key priority for banks, with an emphasis on implementation. Challenges and concerns facing banks in Hong Kong in the year ahead include cybercrime, anti-money laundering (AML) and counter-terrorist financing, conduct and culture risks. It is expected that banks will increasingly apply technology to tackle these issues, manage costs more effectively and maximise revenue generating opportunities.
KPMG China operates in 16 cities across China, with around 10,000 partners and staff in Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 152 countries and regions, and have 189,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.