Dao Heng Bank to develop corporate internet banking with Octasoft

Independent survey says that most Hong Kong businesses will be ready for online banking in the next 12 months.
Asian banks have generally been a bit slow in offering their services online, and while most banks now offer online functionality for retail customers, there are few that have successfully exploited the potential for serving corporate customers over the internet. Dao Heng Bank hopes to realize its plans for the business-to-business (B2B) sector by the end of the year, and has signed a partnership with e-finance software vendor Octasoft to develop a corporate banking solution for its customers.

The Hong Kong-based bank, part of the Guoco Group, has offered a retail banking service called e-banking since April this year and executive director James Eng says it is time to gear up for Hong Kong’s growing B2B market. Octasoft will provide its iBanc Suite and ePlatform products to enable Dao Heng to tap into an explosive growth in e-commerce transaction volumes in the Asia-Pacific. International Data Corporation predicts that by 2003, the total value of e-commerce revenues in the Asia-Pacific region will reach $50.7 billion, up from $2.1 billion in 1999.

Octasoft, founded by two Taiwanese software engineers in Silicon Valley in 1997, counts many of Taiwan’s top banks as customers and also has offices in China, Hong Kong and Korea. The company claims it is the only international internet banking provider that can offer full support for dual languages, a must-have feature for any bank serious about serving Asian corporate customers.

Eng says he was happy to have found a solution for Dao Heng’s needs in Asia, especially considering some of the differences in financial infrastructure across the region.“If we adopt Western solutions only, it’s not necessarily going to work,” he says.

One example of differences in B2B banking between Asia and the US is that the US has a central credit bureau that allows most commercial transactions to be conducted using open credit. “But it doesn’t work like that in Asia,” says Eng, “so we need trade finance services.”

However, Dao Heng won’t be offering any internet-based trade finance for its customers just yet. According to Eng, the bank will introduce the first phase of its corporate banking service in the fourth quarter this year, which includes account and cash management. “Going forward we will introduce integrated trade finance and continually enhance B2B functionality as required by our customers.”


Eng admits that Dao Heng is far from being the first to market with online corporate banking in Asia, but he’s confident that the bank has built a solid, scalable IT infrastructure and has good knowledge of its customers' needs.

“Dao Heng doesn’t have unlimited resources,” he says. But the bank is spending about $100 million per annum on technology development and has been busy putting all the fundamentals in place.A new call centre and the establishment of mobile phone banking are among recent IT expenditure projects.

Dao Heng also commissioned an independent survey of commercial banking customers from Arthur Andersen prior to announcing its upcoming internet corporate banking service. This survey of over 5,000 customers revealed that while only 30% of respondents are using the internet today, over 50% say they intend to use the internet for business in the next 12 months.

“The reason we conducted research was to find out whether the market is ready, and we found they’re not. But they will be in the next 12 months and we’re timing our product development to coincide with that,” says Eng.

Share our publication on social media
Share our publication on social media