As Hong Kong prepares for a new era of Open banking, a survey by Accenture finds consumers in the territory are far more willing than their Western counterparts to give third parties access to their financial data.
The Hong Kong Monetary Authority released an Open API framework in July, paving the way for bank data sharing with third party vendors. The first phase roll out begins tomorrow, as part of the central bank's 'smart banking' initiatives that also include a new faster payment system and virtual banking licenses.
While consumer wariness of sharing financial data with third parties has proven a roadblock to rapid adoption in the UK and Australia, mobile banking users in Hong Kong appear far more likely to adopt the concept, particularly if they can get something in return like better loan rates or higher savings/deposits rate.
The survey of more than 2000 consumers by Accenture found that more than half are willing to let third parties access their financial data in order to get more-personalized banking services and higher returns. Only 31% said they would not be willing to share their data.
By comparison, similar surveys that Accenture conducted in Australia and the UK showed that consumers in those markets were more than twice as likely to say that they would not be willing to share their financial information with third parties (66% and 69%, respectively).
"The foundations are clearly there for Hong Kong to leapfrog many markets with Open Banking solutions,” says Fergus Gordon, Accenture MD. “To strengthen their engagement with customers and benefit from consumers’ willingness to share their data with non-bank providers, banks must look for opportunities to partner with third parties to offer the types of services their customers want.”
When asked what other types of organisations they would trust their data with, 16% of Hong Kongers cited retailers and large online merchants and 33% international and local payments firms, underscoring their openness to non-bank providers. The local populace is also open to using third-party providers for payments, with 38% and 26% of Hong Kongers saying they would trust online retailers and large technology companies, respectively, to initiate a payment.
Digital payments and wallet services that are ubiquitous in the Chinese mainland are also quickly making inroads in Hong Kong, with the number of Hong Kongers who said they use these services at least once each month more than double the number who say they never use them (69% percent vs. 31%).
“Asia’s large population of digitally savvy young consumers with rising disposable income demands from their financial-services providers the same sort of convenience, ease-of-use and access that they’ve grown accustomed to from their favorite social media or tech platform,” says Piyush Singh, a managing director at Accenture who leads its Financial Services practice in Asia Pacific and Africa. “Banks need to quickly adapt or risk losing this future generation of consumers to startups and tech firms that ‘get’ them.”