Standard Chartered has a long association with Hong Kong’s banking and financial services.
Today, new regional and global opportunities are opening up, thanks to innovative digital technology and connectivity. FinanceAsia spoke to Standard Chartered’s CEO for Hong Kong Mary Huen about the bank’s new directions.
Q Does your historic presence here influence Standard Chartered’s operations today?
A Having operated in the region for almost 160 years, we’re part of its business and social fabric. Our brand presence and strong client relationships were reflected in our being voted FinanceAsia’s Best Bank in Hong Kong 2018.
Domestically, we aim to capture market share. We see Hong Kong as a super-connector between China and the world and I see a full spectrum of opportunities arising from China’s opening up.
We are an experienced player with deep-rooted presence and relationships in Hong Kong and I’m proud to say we are actively exploring opportunities including digital technologies for the benefit of our clients.
Q How is fintech transforming Standard Chartered’s banking and customer service?
A Ultimately, fintech innovation is about delivering a superior service. To do this, we’re taking our clients and staff along on our fintech journey, and we’re seeing a real shift in customer behaviour towards digital technology.
Standard Chartered has a number of digital market firsts, especially in payments. We were the first bank to introduce the Alipay top-up service in Hong Kong and we’re an exclusive partner with Octopus for O! ePay. This gave us first-mover advantages and helped us to gain valuable insights about our clients.
We recently announced our intention to apply for a virtual banking licence in Hong Kong, a way to give clients the choice to go completely digital for their everyday banking needs.
I don’t see technology and personalised service as being “either-or” but rather “and”. We want to provide a superior service to our clients, so I’d like to describe our approach as ‘digital with a human touch’.
Q What fintech innovations or products are you most excited about?
A Our Hong Kong innovation lab, the eXellerator is driving innovation within the bank and tapping emerging financial technologies and data science in the region, to help us deliver better products and services to customers. Our staff, clients and vendors can work together with our eXellerator lab, to find innovative solutions that address real pain points and help us better understand key issues affecting our clients.
Standard Chartered is also working on blockchain solutions. We have completed a proof of concept to deliver distributed ledger technology (DLT) and the use of smart contracts for trade finance, to increase efficiency and reduce the potential for fraud. We’re the lead bank of the DLT Trade Finance Working Group under the Hong Kong Monetary Authority’s Fintech Facilitation Office. The group includes a consultancy firm and four other banks in Hong Kong. Recently we were also appointed by Ant Financial as the core partner bank for its new blockchain cross-border remittance service between Hong Kong and the Philippines.
Q Does the belt and road initiative (BRI) create opportunities for your clients?
A Standard Chartered is well placed as the “go to” bank for BRI opportunities thanks to our unique network, deep local knowledge and experience.
The Standard Chartered Group is committed to supporting this initiative by facilitating at least $20 billion in financing by 2020. We already have branches and offices in 45 of the 65 BRI markets, and we see Hong Kong’s position as an international financial centre, as having many natural advantages over and above proximity to China, depth of liquidity and a robust legal system. For example, the HKSAR government’s new corporate treasury rules give preferential tax treatment to treasuries of companies aligned with BRI projects. So, we are helping clients with BRI projects, set up their treasuries in Hong Kong, giving them better liquidity and FX management across the region.
In China, we are a top foreign bank and we have the right collaboration model in place between Standard Chartered Bank Hong Kong and China so that we can leverage the full strength of the network and deliver the bank to our clients.
Being one of the first players in the market to spot this opportunity and by building our capabilities early on, gave us an advantage in terms of renminbi and treasuries, and we have helped shape industry developments.
Our partnerships with the Silk Road Fund, Asian Infrastructure Development Bank, the New Development Bank and Chinese banks means we are able to support our clients as they go global. Add to this, our deep industry knowledge, access to worldwide currencies and renminbi markets, tailor-made products and solutions for project and export finance, mergers and acquisitions financing, loan syndication, debt capital markets products, trade, cash management and financial market products.
Given our strategic agenda of becoming a super-connector for China’s opening, Standard Chartered Hong Kong is in a good position to capture the emerging opportunities in the development of the Greater Bay Area (GBA). According to some estimates, the GBA is likely to rank as the world’s largest banking city cluster by 2023, overtaking the Tokyo Bay Area.
Q How is the year ahead shaping up?
A Hong Kong’s economy is in very good shape to weather rising interest rates. Strong growth and prudent policies should help cushion their impact. Even if HIBOR and US dollar LIBOR track higher, both are likely to remain benign in historical terms.
But Hong Kong is an open economy, so naturally more exposed to global macro trends and geopolitical events. As a result of this, Hong Kong could face more trade headwinds in the coming quarters, but I hope domestic spending will help offset any external shock. Our SME sentiment tracker rose to a 13-quarter high for Q2, despite increasing US-China trade tensions. The survey was conducted in late March and it captured the impact of external trade uncertainty on Hong Kong’s economy, which was best reflected in the material drop in the survey’s global economic outlook component. Nonetheless, the headline index improved on strong hiring appetite (the second-highest reading on record) and a rise in the coincident indicators of sales and profit margins.
More information about Standard Chartered is available here