1. Art and Diseño

perspective JANUARY 2015
Increasing customer
acquisition,
penetration and
retention by
leveraging mobile
financial services:
Hong Kong review
Mayank Parekh, Stefano Sorrentino, Piyush Maheshwari
Increasing customer acquisition,
penetration and retention by
leveraging mobile financial services:
Hong Kong review
Published by
Value Partners Management Consulting
1402, Harcourt House, 39 Gloucester Road
Wanchai, Hong Kong SAR
January 2015
Written and edited by:
Mayank Parekh, Stefano Sorrentino,
Piyush Maheshwari
For more information on the issues raised
in the report please contact:
[email protected]
If you would like to subscribe
or to be removed from our mailing list
please write to:
[email protected]
valuepartners.com
Copyright
© Value Partners Management Consulting
All rights reserved
CONTENTS
Executive
Summary 5
Introduction 7
The opportunity 9
The customers 11
Payments as the uptake generator
Bill and online payments
Peer-to-peer transactions Physical payments
15
CONCLUSION
21
perspective Mobile financial services: HONG KONG REVIEW
15
15
17
Only around a fifth of Hong Kong
citizens are users of mobile financial
services, showing the size
of the opportunity for local banks
to achieve increased revenue,
greater customer loyalty
and a lower cost-to-serve with
an attractive mobile strategy
4–5
EXECUTIVE SUMMARY
Hong Kong is one of the world’s most
technology-savvy and well banked
markets. However, out of its 90% adult
population who have a bank account,
only around one fifth are users of
mobile banking. Local banks’ CEOs are
clear about this opportunity and the
benefits of mobile financial services,
such as increased revenue, greater customer loyalty and a lower cost-to-serve.
On one hand, the main barriers to usage in Hong Kong are related to security
concerns and limited awareness of the
benefits of mobile banking, highlighting
the need for greater customer education.
On the other hand active users, who are
more likely to be young and affluent, are
strongly seeking select features (ease of
use, speed, real-time access, personalized
caring, and money management). The demand is strong enough to influence their
choice of provider. This is where banks,
especially lagging second-tier players,
must build their value proposition. In addition to the basic mobile banking functionality mentioned above, specific attention
should be provided to payments.
Banks in Hong Kong offer EPS (Electronic
Payment Services) and PPS (Payment
by Phone Service) as a coalition, which
enjoys wide acceptance for bill payments.
However, the role of banks in Hong Kong
in the overall payment space is still limited
when considering online, peer-to-peer
and physical payments. In particular:
• There is limited presence of bank transfer payment solutions for e-commerce,
where credit cards and e-wallets (e.g.
PayPal) are dominating the competitive
online payments battlefield
perspective Mobile financial services: HONG KONG REVIEW
• Banks provide basic, non-user-friendly peer-to-peer payment solutions, at
times charging customers
• Initial market entry attempts into
physical payments have not seen
much success due to limited customer utility and upfront fees, and
the transportation-based Octopus
card continues to dominate, capturing 82% of cash-less transactions in
terms of number
In all these areas, the competition is
becoming increasingly fierce, as even
non-banking players like AliPay (which
is working with shopping malls to enable tourists from China to pay using
the mobile app), PayPal and increasingly compelling products and services
from Apple, Samsung, and Square target customers using digital payments as
the main point of entry. However, these
are all still evolving and there has not
emerged a clear winning model as yet.
Banks, in comparison, enjoy some unique
competitive advantages such as their customers’ accounts, the knowledge of their
spending behaviours, and the opportunity
to conduct a lending business, to mention
a few. These strengths should be adequately leveraged to develop an attractive
proposition, which can help banks acquire
and retain new and existing customers.
In this attractive and extremely competitive context, Value Partners Management Consulting can assist financial
institutions to develop a robust mobile
strategy to successfully capture the
early mover advantage and ultimately a
greater share of customer value.
Exhibit 1
Technology penetration in Hong Kong compared to other peer
countries in the Region
Overall mobile
penetration, 2013
187%
unique mobile
penetration, 2013
156%
122%
Hong Kong
Singapore
Taiwan
108%
Japan
107%
South Korea
87%
93%
92%
89%
89%
88%
China
Hong Kong
Singapore
Taiwan
Japan
South Korea
China
18%
16%
6%
Japan
South Korea
China
64%
tablet penetration
(% of households), 2013
unique smartphone
penetration, 2013
Of which ~36%
Android, 27%
iPhone, 1% other
63%
72%
Hong Kong
Singapore
51%
25%
73%
Taiwan
Japan
South Korea
47%
51%
59%
34%
China
Hong Kong
Singapore
Taiwan
Exhibit 2
Mobile banking application usage
by ‘promoters’ for selected Hong Kong banks
(% of bank ‘promoters’ (*) that are using
its mobile application)
Exhibit 3
Cost-to-serve customers through different
bank channels
(Average cost per transaction, 2014)
$ 3.00
85%
82%
70%
65%
$ 0.65
$ 0.10
Standard
Chartered
Bank of China
HSBC
Hang Seng
Branch teller
Sources: WCIS 2014, Value Partners online customer survey on mobile banking in Hong Kong,
Diebold Inc. investor Presentation Feb 2014
Note: (*) Promoters defined as those customers which select the specific bank as the ‘Best
customer centric / friendly bank’.
6–7
ATM
Mobile
INTRODUCTION
1
This figure refers to on-line time
and excludes off-line gaming and
other non-Internet dependent
applications
The concept of a ‘customer-centric’ bank
has been long discussed, but strong
growth rates and profits in Asia have
undermined the need for investments to
be truly ‘customer-centric’. More recently, with growth plateauing and rising
customer expectations for service levels,
quality and integration of delivery channels, banks are finally trying to overcome
organizational inertia and move towards
customer centricity. CEOs recognize that
this model drives increased loyalty and
lower customer attrition while enhancing cross-selling, ultimately increasing
revenues and profits.
Swift technological development and
new digital consumer behaviours make
the mobile channel an important slice of
the larger transformational journey towards customer centricity. On one hand,
easier connectivity and increasingly
powerful smart devices are changing
customer behaviour; on the other hand,
the same technology should allow banks
to simultaneously enhance revenues and
optimize the cost-to-serve, which is under pressure from tightening regulations.
In Hong Kong, mobile penetration
stands at 187%, with unique mobile
penetration at 93%. Together, these figures make Hong Kong one of the most
mobile friendly countries in the world
and a clear leader in Asia. Similarly,
when gauging the technology savviness
of residents, Hong Kong stands out with
63% of the population owning at least
one smartphone and more than half
of the households owning at least one
tablet (see Exhibit 1).
perspective Mobile financial services: HONG KONG REVIEW
From a network perspective, all Mobile
Network Operators (MNOs) have deployed 4G services utilising LTE technology. This has enabled mobile subscribers to browse with high download
speeds of up to 150Mbps paying just a
few dollars a month. As a result, users
spend on average as long as 2 hours
and 10 minutes every day connected to
the Internet through their phone1.
Despite being a country with high
mobile penetration supplemented with
evident technology savviness, it is remarkable that only a fifth of Hong Kong
residents use mobile banking either via
a smartphone or tablet. This scenario
requires further investigation given
Hong Kong’s highly penetrated banking environment (90% of adults own a
bank account in a recognized financial
institution).
The low uptake of mobile banking
points towards an evident gap between
the offer and customer requirements,
which in turn presents an invaluable
opportunity to serve customers through
an untapped medium, which can greatly
enhance their lives.
Exhibit 4
Perceived service quality offered by Hong Kong banks across
different categories
BANK
#1
BANK
#2
BANK
#3
BANK
#4
BANK
#5
BANK
#6
BANK
#7
Multichannel customer
approach
Mobile banking
Consistent experience
across channels
Customer
centric/friendly
Products and
services
Investment/wealth
management
services
Loan products
Exhibit 5
Perceived quality correlation between banks’ multichannel offer
and products & services
Perceived quality of
bank’s product and services
5 (high)
1 (low)
Perceived quality of bank’s multichannel
Source: Value Partners online customer survey on mobile banking in Hong Kong.
5 (high)
The opportunity
Indeed, the question “How do I bring the
bank to the mobile phone?” is recurrent
in the minds of most banks’ CEOs in
Hong Kong.
They acknowledge the potential of this
additional channel in several areas:
• Increased non-cash transactions (and
hence fees), since mobile operations
are often easier and faster to complete compared to other channels
• Improved targeting of up / cross-sell
products and services, by leveraging accurate and increased customer
information (i.e. big data)
• Better customer experience to bring
eventual loyalty benefits, given the
easier and ‘smarter’ interactions,
with the majority of bank ‘promoters’ observed to be mobile banking
users (see Exhibit 2), according to our
recent customer survey
• Lower operating costs, as the cost-toserve can be reduced significantly by
migrating human-performed operations to mobile (see Exhibit 3)
perspective Mobile financial services: HONG KONG REVIEW
In addition, mobile banking as part of a
well-designed multichannel approach
can be leveraged to increase the overall
perception vis-à-vis the bank’s quality of services. A clear gap seems to
emerge between top vs. second-tier
banks: the perceived ‘best’ banks consistently offer a high quality of services
across all channels, including mobile
banking (see Exhibit 4), as reported by
customer responses.
As a result, there seems to be a strong
correlation between customers’ perception of mobile banking quality and the
quality of other services offered.
Exhibit 5 shows, through a normalized
correlation (respondents-neutral), how
the most popular banks are also perceived as the most multi-channel.
Exhibit 7
‘Conversion rate’ of mobile banking non-users
(respondent answers to “What is the likelihood that you would try new
mobile banking if your concerns are addressed?”)
Higly likely
12%
Not very likely
EXPECTED
‘Conversion rate’
45%
65%
50-50 chance that I would
23%
Exhibit 8
Demographic characteristics of mobile banking user
Gender
AGE
Female
Significantly larger
than 15%-20% of total
population aged 18
and above
> 50
18 - 30
31%
46%
37%
54%
32%
Male
monthly salary
(hkd)
Significantly lower
70% of total
employed population
> 20,000
20,001 - 30,000
profession
30 - 50
Homemaker
> 50,000
16%
Not employed
22%
Self employed
22%
15%
Source: Value Partners online customer survey on mobile banking in Hong Kong.
14%
12%
Professional
14%
13%
40,001 - 50,000
30,001 - 40,000
10 – 10
9%
10%
20%
21%
Bank employee
13%
Corporate employee
Civil servant
Student
The CUSTOMERS
More than half of the non-users of mobile
banking mention security concerns as
the top reason for choosing not to use
the service. In reality, mobile banking
security is as strong as online banking
and uses similar authentication processes (e.g. phone PIN, double password,
authorization through security device),
making this an unjustified worry. Secondly, a lack of awareness and understanding about the services also hinders
customer adoption (see Exhibit 6).
• Service is more popular in the age
range between 18 and 30 years,
given the higher tech savviness
(respondent answers to “What are the reasons you do not use
mobile banking?”)
59%
Do not see a reason, all banking needs
are already met
14%
Lack of guidance on how to use
9%
Do not have an internet enabled phone
9%
Need more financial incentives
to use m-banking
5%
None of the available apps are good,
they are too complicated
2%
I do not even know that such apps exist
and are available to me
2%
23% show lack
of knowledge /
awareness
Source: Value Partners online customer survey on mobile banking in Hong Kong.
perspective Mobile financial services: HONG KONG REVIEW
Looking at active m-banking users, a
dominant socio-demographic group
does not emerge clearly (see Exhibit 8),
but there are few trends to be noted:
• Men use it slightly more than women,
given that 54% of HK population is
female
Exhibit 6
Main reasons for not using mobile banking
Not sure about how secure it is
These findings suggest that banks
should invest in product education and
marketing to overcome these psychological and behavioural barriers and
increase mobile banking usage. In fact,
as seen in Exhibit 7, approximately half
of the non-users express willingness to
try the mobile banking services if their
concerns are addressed.
• In terms of salary, usage of mobile
banking is clearly skewed towards
higher income population
• Even bank employees do not demonstrate a higher mobile banking
adoption than other professions
In light of the above, Hong Kong banks
must shape their mobile offering in the
form of a mass market service, suitable
for all type of customers regardless of
their age, gender, salary or profession.
Exhibit 9
The most important reasons to use mobile banking
(respondent answers to “What are the top reasons you use mobile banking for?”)
34%
All time access (24 hours, 7 days a week)
Time efficient and fast (on-the-go banking)
23%
Better control of my money (stay on top of your money
more quickly and easily)
13%
12%
Track markets and investments in real time
Less fee for banking services
5%
More secure transactions
5%
Like to experiment
5%
Bank offered promotional scheme
2%
Exhibit 10
The most valued services and features of mobile banking according to the customers
(respondent answers to “Which features do you think are the most useful ones?”)
15%
Alerts (deposits/withdrawals, payment due, low balance)
Check Balances (Accounts, Credit Cards etc.)
7%
Check recent transactions
7%
Bill Payments
7%
6%
Peer-to-peer payments/transfers
TOP 10
Contact customer service (chat/e-mail/call)
5%
Access to capital market products (trading account
accessible from the app)
5%
In-network ATM search (location based)
5%
Update contact details (e-mail/phone no.)
4%
Blocking of lost /cards / temporary credit limit reduction on the card
4%
Setting savings goals with monthly reminders, blocking funds for fixed…
4%
Remittances
4%
Cheque deposit using phone camera
4%
Applications for loans
3%
Graphics for spend categorization and comparison across people similar…
3%
Source: Value Partners online customer survey on mobile banking in Hong Kong.
12 – 12
bottom 5
2
Source: Converge Comunicações
The top reasons for using mobile banking (see Exhibit 9) remain the same
across demographic groups. The most
popular incentive is the convenient and
time efficient 24/7 access, followed by
the need to closely manage personal
finances and investments in capital markets, in tune with the city’s reputation
as a regional financial hub. An important aspect to note is that promotional
schemes offered by banks generate
almost no impact on customers’ decision to use mobile banking in the longer
term.
These reasons seem to be consistent
globally, across developed and emerging markets. For instance, the top three
reasons for Brazilian m-banking users
are convenience, speed and ease-of-use
compared to Internet banking through a
desktop2. This can mean that an investment to develop a winning solution in
one region can be used by multi-country banks for a global deployment with
suitable modifications.
Regarding the services currently offered
by local banks’ mobile banking apps,
customer preferences for individual
features are distributed, with no single
feature showing widespread appeal,
thus requiring banks to provide a
comprehensive set of mobile banking
functions. The most valued ones are restricted to a set of 10 features for most
professional categories and age groups
(see Exhibit 10).
The top 10 preferred features can be in
turn grouped into 4 main buckets:
• Alerts for cash deposits, withdrawals
and reminders for payments due or low
balance, to avoid late payment fees
• Money / account management in
real-time, intended mainly for making payments and transfers but also
checking balances and transactions
perspective Mobile financial services: HONG KONG REVIEW
• Customer service, including for
emergency issues such as finding
the closest ATM machine or blocking
lost / stolen cards
• Real-time access to capital markets,
reflecting the importance of wealth
management services for Hong Kong
residents
These features are valued by customers
to the point that over 60% of mobile
banking users claim to be willing to
open an account with a new bank, if
its mobile banking provides all these
services in a reliable and speedy manner, further highlighting its customer
acquisition potential.
It is thus essential for Hong Kong banks
to offer an uncluttered mobile application that enables quick and easy access
to customers’ accounts, provides the
‘peace-of-mind’ through caring features
and allows customers to manage wealth
in real-time (e.g. account information,
recent transactions, stock information,…). The last feature presents obvious challenges in the area of IT development, and could require partnerships
with capital markets entities.
Lastly, customers consider making payments and transactions easily through
the mobile phone as a critical aspect.
An extremely interesting aspect to
highlight is that current mobile banking
users do not mention physical payments as a paramount functionality
they expect from their bank’s mobile
offering.
Exhibit 11
NetBanking direct payment on Rediff Shopping mobile application
+
+
Exhibit 12
HSBC peer-to-peer transfer via mobile app
xxxxx xxx
+
Source: Desktop research, Value Partners Analysis.
14 – 14
Payments as the
uptake generator
Within payments, we distinguish among
three main categories: bill / online payments, peer-to-peer transactions, and
physical payments. Among these three
service types, the current offers of Hong
Kong banks are not entirely meeting
customer expectations and hence not
fully capturing the market potential.
Bill and online payments
While customers find it practical to pay
bills through direct bank functionality (direct debit, ATMs, mobile apps
etc.), the online payment landscape is
dominated by two types of methods:
credit cards and e-wallets. Credit cards
have significantly contributed to the
development of e-commerce in the past
decade, but customers’ and merchants’
concerns about digital fraud and lenders tightening credit have left room for
the rise of e-wallets (like PayPal, Alipay).
Recently, this space is also seeing interest from various Internet giants, including Google and Facebook. Nonetheless,
the ownership of customer accounts
and a greater knowledge of spending
behaviours empowers banks to still play
a significant role. Going forward, we expect banks to expand Internet purchasing services through improved online
bank transfer solutions and e-wallets,
providing the benefits of being secure,
fast and pre-installed in every customer
account.
perspective Mobile financial services: HONG KONG REVIEW
Banks operating in other markets with
a similar context have already started
to move in this direction. For instance,
around 35 banks in India offer NetBanking, an online payment system for direct
payments using just the customers’
bank account, without involving credit
cards, cheques or third party e-wallets.
This system is widely used to pay for
products and services ranging from
travel and shopping to charity donations. NetBanking offers a convenient
customer experience for e-commerce
payments, where the customer is redirected at checkout to a secured page
specific to the customer’s bank, requiring only the user ID and password to
complete the transaction (Exhibit 11).
Peer-to-peer transactions
Peer-to-peer (P2P) represents an
increasingly attractive segment with the
ongoing global digitization of money.
Currently, even making same-bank
transfers of a small amount (<100USD,
i.e. the equivalent of a dinner, a tank of
gasoline, few theatre tickets etc.) via
mobile in Hong Kong, when available,
requires several authorization steps,
including the registration of the receiving account.
For example, HSBC allows only
transfers to self-named accounts or
registered accounts via its mobile application (Exhibit 12). Furthermore, an
inter-bank transfer incurs a handling
charge, which deters customers from
using the service entirely.
Exhibit 13
Overview of venmo P2P payment platform features
a
a
B
PAY your friends instantly
1 - Choose a friend
(via phone, email or facebook)
2- Type amount and message
3- Choose sharing options
B
C
C
BUSINESS MODEL
-Free to pay to Venmo accounts or to bank partners
-3% charged to sender if payment is made to credit
card and some dbit cards
Source: Desktop research, Value Partners Analysis.
16 – 16
At the same time, several non-banking
P2P payment players are emerging and
are expected to capture a significant
share of the market given their simplicity and user-friendliness. An interesting
example is the US-based venmo, as
shown in Exhibit 13 (AliPay also offers a
similar service in China.
Players like venmo provide several benefits over the traditional bank offering
such as:
• The ‘fun and sociable’ nature, since
transactions and their reasons can be
publicized via social media
• The speed of access to recipients
through mobile phone contact lists
• The possibility to chargve multiple
users to settle outstanding balances
Hong Kong banks are recommended
to explore the opportunity to provide
similar services to prevent the migration of their customers to other forms
of money management, as well as to
increase their share of transaction fees.
Exhibit 14
Shares of Hong Kong physical transactions by main categories
Electronic direct/ACH
Others (e.g. NFC, cheque,…)
1%
Card transactions
(including EPS)
12%
Cash payments
29%
58%
Octopus card
Source: Euromonitor and Octopus Card website.
perspective Mobile financial services: HONG KONG REVIEW
Physical payments
The Hong Kong physical payment
market is currently dominated by Octopus Card that enjoys a penetration of
99% among the SAR citizens. Octopus
currently holds the largest share with
around 58% of the total physical transactions (see Exhibit 14). If we exclude
cash payments, this share jumps to 82%.
However, some limitations with Octopus
leave opportunities especially for high
value payments:
• It is a prepaid card, that requires a
top-up once the balance is fully consumed (the top-up can be automatic
but requires the use of a credit card
and effort to enable the service)
• It is accepted by most public transport options except for the majority
of taxis, which are widely used in
Hong Kong, especially among the
affluent segment
• If lost or stolen, the card holder is
not reimbursed for any transaction
occurring during the 3 hours following the reporting and it may take up
to two weeks to receive the new card
with the refund.
• The card is focused on micropayments and hence the maximum
stored value as well as transactional
limit is 1,000HKD (~130USD). This
still leaves significant opportunity for
more convenient forms of payments
in several circumstances for more
expensive transactions (e.g. restaurants, grocery shopping, consumer
electronic purchases, wellness treatments, etc.)
Exhibit 15
NFC mobile payment services in Hong Kong
BANK
launch
date
business model
• Maximum limit per transaction:
$500 or $1000
Oct 2012
partners
NFC enabler
NFC-enabled sleeve
• Annual fee: $400
• Maximum limit per transaction:
$500 or $1000
Dec 2013
• Mobile wallet being able to
store multiple cards and offer
loyalty services
Oct 2013
• Maximum limit per transaction:
$1000
NFC SIM
NFC SIM
NFC sticker
• $18 per mth ($216 per year)
Jun 2013
with Pccw
• Maximum limit per transaction:
$500
Feb 2014
with CSL
• $8 monthly fee ($96 per year),
waived in first year
Oct 2013
• Maximum limit per transaction:
- $1000 in MasterCard payPass
- $500 on UnionPay QuickPass
• Annual: $100
Source: Press search, Company websites, Value Partners Analysis.
18 – 18
NFC SIM
NFC SD-card
Few Hong Kong banks have already
identified this opportunity and in the
past 18 months started to offer physical,
contactless payment services mainly
employing Near-Field Communication (NFC) technologies. Most of these
solutions require partnerships with both
MNOs and credit / debit card associations (Exhibit 15), as well as merchant
willingness to install NFC-enabled POS
terminals.
Looking closer at each bank, we see
that HSBC offers two mobile payment
solutions tailored for either Android
or iPhone, based on NFC SIM cards in
partnership with PCCW (CSL) and MasterCard and an NFC-enabled case with
Visa, respectively. However, the latter
solution’s offers limited attractiveness
given the large sleeve size and lengthy
order time (up to two months). In order
to encourage usage, HSBC integrates
both mobile banking and mobile payment access into the same homepage.
In addition, the use of the mobile
application is necessary to activate the
contact-less chip required to enable the
transaction (up to HKD 500, ~USD 65)
perspective Mobile financial services: HONG KONG REVIEW
Citibank has partnered with H3G and
supports all its Visa credit cards, and
provides payment solutions for both
Android and iPhone using NFC SIM
cards and NFC stickers, respectively.
Citibank also supports features such
as e-coupons and membership cards.
However, the solution provided to iPhone users offers limited protection as a
PIN lock is not required, and the sticker
is simply attached to the phone using
an adhesive tape. Hang Seng Bank
(HSB) collaborates with MasterCard and
multiple MNOs to offer its solution using
NFC SIM cards. Similar to Citibank, HSB
also offers downloadable e-coupons.
Bank of China (BoC) opted not to
collaborate with any MNOs for its NFC
payment service. BoC’s only partnership is with UnionPay and MasterCard
and employs NFC SD cards to offer the
payment service to Android users only.
The NFC SD card is physically connected to the SIM card in order to enable the payments, hence this solution
is applicable only to handsets where
the connection between the SIM card
and the SD card can be accessed and
secured underneath a case (therefore
not available for iPhone).
All these services are commercialized
by banks by charging an annual upfront fee to their customers, which has
been a strong deterrent to widespread
customer adoption so far (i.e. in 12-18
months). Other reasons may include the
relative primitiveness of these services
when compared to more advanced
solutions globally, where we are seeing
rapid innovation and entry from players
across industries:
• Bankinter from Spain launched a
software-based NFC mobile payment
solution that uses a standard mobile
app and does not require a SIM / SD
card or phone case / sticker, thus
eliminating the need for collaboration
with MNOs and limiting the extent of
future technology investment
• Apple Pay was launched with the
iPhone6 and iWatch, providing NFC
payments secured by fingerprints
• Samsung currently offers NFC technology with several handsets, and
includes support for solutions from
other industry players such as Google
Wallet and Visa payWave
• Square and PayPal are already
providing payment solutions for
consumers as well as SMEs, ranging
from payment processing functionality, low-cost payment acceptance
terminals and e-wallets
• AliPay in China has entered this space
without using NFC or cards, choosing
alternate technologies such as QR /
barcodes or NSDT / sound waves to
enable payments with limited terminal investment
20 – 21
However these players do not seem to
be in a position to offer the entire range
of services and products that banks can
typically provide. For this reason, Hong
Kong banks have the opportunity to
develop a unique mobile payment solution, helping them attract new mobile
banking customers and also increase
their stickiness. It is critical for all banks,
large or small, to start planning for a
long-term digital payment strategy and
secure the early mover advantages.
CONCLUSION
With customer expectations evolving rapidly beyond traditional branch
servicing, mobile banking is an important channel in the Hong Kong context.
While increasing loyalty and cross
selling opportunities can help boost
revenues, mobile banking can also be
useful in reducing the cost to serve.
Hong Kong banks (particularly secondtier ones) are not fully tapping the mobile banking segment despite its evident
and enormous potential. Most of their
mobile banking apps do not meet current and expected future needs of their
customers. Simplicity, security and a
seamless experience are the three pillars
required to build a successful mobile
banking experience for consumers.
Payment solutions ranging from Online,
P2P and Physical payments are being
used as the hook even by non-banking
companies to reel in customers. However, the offerings are limited leaving
a large part of the need still somewhat
unaddressed. This may represent the
pivot on which banks can attempt to
build a winning mobile proposition.
However, the multitude of choices and
the criticality of certain decisions for
success makes the path to achieve this
objective far from straightforward.
The winning solution involves several
strategic decisions regarding the type
of services to deploy, the technology
to use, the right partnerships to set-up,
how to work around other players in the
value chain (e.g. MNOs), and so on.
perspective Mobile financial services: HONG KONG REVIEW
At Value Partners Management Consulting we have assisted multi-national
banks across the globe on initiatives
dealing with innovation, be it product,
channel or customer experience. Currently we are working with local banks
in certain geographies to develop and
implement their mobile strategy for the
future.
In Asia, Value Partners has completed
numerous engagements with Telecom
majors around the increasing integration of payments, e-commerce and
mobile banking, acknowledging the
growing interest amongst both banks
and telecom players to explore the
opportunity to fuel growth in the next
phase.
Given this experience in financial services, payments, telecommunications &
media, Value Partners is well positioned
to support banks and other financial
institutions in undertaking the challenging and transformational journey of
bringing the bank to their customers via
mobile devices.
AUTHORS
Mayank Parekh
Stefano Sorrentino
Asia Managing Director and Head of the
Financial Institutions Practice
Senior Engagement Manager of the
Hong Kong office
[email protected]
[email protected]
Piyush Maheshwari
Associate of the Hong Kong office
[email protected]
22 – 23
On-line, physical and peer-to-peer
payments represent the pivot on
which Hong Kong banks could
build a winning mobile proposition
perspective Mobile financial services: HONG KONG REVIEW
About
Value Partners
Value Partners has an established
financial institutions practice with
a proven track record in cards,
payments and transaction banking
consultancy. Over a quarter of our
projects are on behalf of financial
institutions. We have completed
projects with top banks, credit card
issuers and payments schemes.
Value Partners also works across all
sectors of the telecommunications
and digital marketplace, as one
of the largest TMT practices worldwide, with particular expertise
in mobile and digital services, fixed
and mobile voice and broadband,
license bids, network infrastructure
and equipment.
We have assisted 3 of the world’s
top 5 banks, the leading European
financial institutions and the main
telecoms operators in Europe, Asia,
Middle East and Latin America.
Value Partners has played a primary
role in the development of innovative solutions, especially those at the
crossroads, between industries.
Value Partners helps its clients adapt
their business models in an increasingly complex business environment,
to maximise impact and returns
in the financial services, payments,
telco, technology and digital media
spaces.
Founded in Milan in 1993, Value
Partner’s rapid growth testifies
to the value it has created for clients
over time.
For more information on the issues
raised in this note please contact
the authors.
Find all the contact details on
valuepartners.com
Milan
London
Istanbul
Dubai
São Paulo
Buenos Aires
Beijing
Shanghai
Hong Kong
Singapore
Value Partners has built a portfolio of more than 350 international
clients – from the original 10
in 1993 – with a worldwide revenue
mix.
Today it draws on 25 partners and
280 professionals from 23 nations,
working out of offices in Milan,
London, Istanbul, Dubai, São Paulo,
Buenos Aires, Beijing, Shangai,
Hong Kong and Singapore.
Copyright © Value Partners
Management Consulting
All rights reserved