This annual update forecasts developments and trends affecting Hong Kong’s banking sector in 2020. One thing is certain: rapid change will be the new constant.
In this report, KPMG subject matter experts offer a number of predictions for the industry which also shed light on three broader trends. First, risks continue to change, and so does the nature of those risks. In particular, we are seeing a greater focus on non-financial risks, ranging from cyber and climate-related risks to conduct and culture.
Second, we continue to see a fast evolving and increasingly competitive landscape in Hong Kong. The launch of the city’s first virtual banks in the coming months will certainly add new players into the mix, but it also forms part of a broader trend where the lines are blurring between sectors. Many technology and telecom companies are seeking to expand into financial services in order to build and strengthen customer relationships across all areas of their daily lives. At the same time, the way in which people use financial services is changing, and so too are banks’ operating models.
Lastly, we expect digital transformation to become an increasingly important business imperative to enable banks to improve cost and operational efficiency, capitalise on new opportunities and win new customers.
Data underpins each of these key trends, and will be a crucial area of differentiation among banks in 2020. The report notes that banks that will be successful in the long run will be the ones that have a comprehensive data strategy and that can leverage their data to increase revenue, and enhance regulatory compliance and operational efficiency.