Tat Lee, Chief Executive at WeLab Bank

WeLab Bank: Reinventing Customer Experience for the New Decade

by FeaturedTop Stories

The proliferation of digital banks around the world led to Hong Kong Monetary Authority being one of the first regulators in Asia to invite applications and approve the launch of eight virtual banks in Hong Kong. Of the eight applications approved to operate as virtual banks, WeLab Bank –a wholly owned subsidiary of WeLab, positioned as a home grown virtual bank continues to build on an existing eight year relationship with the people of Hong Kong. The bank’s aim is to introduce innovative financial solutions to help the young target market find joy along their financial journey by helping them Manage (M), Save (S), and Grow (G) their money. The Digital Banker interviewed Tat Lee, Chief Executive at WeLab Bank, to understand the lay of the land, discuss highlights and mandates at the virtual bank and what does the future hold for the banking industry as a whole.

The Digital Banker (TDB): Having launched in the midst of a pandemic, can you please recount for us some of the highlights of WeLab Bank in 2020?

Tat Lee: I can vividly recall the day – July 30, 2020, in the midst of third wave of the global health crisis in Hong Kong, we launched WeLab Bank.  People here largely stayed indoors, due to heavy restrictions on social gathering.  Several traditional banks were forced to close down branches or shorten operating hours. In hindsight, 2020 accelerated digital banking adoption – allowing WeLab Bank to step in and fulfil everyday banking needs. A testament of how the people of Hong Kong embraced our bank is that we received 10,000 new account opening applications in the first 10 days!

The highlight for us at WeLab Bank was the launch of GoSave – an innovative term deposit product with a unique social element. Drawing on a symbolic icon, the Hong Kong mini-bus, the GoSave term deposit product harnesses the power of community to provide higher than market 3-month tenor interest rates, with minimum deposit being as low as HKD 10. To kickstart the GoSave mini-bus (time deposit vehicle), 80 depositors must be onboard. Since launch, over 1300 Go-Save term deposit minibus have begun, with half of the customers participating in more than one GoSave mini-bus.

TDB: As a new emerging player in the banking segment, what are some of the challenges and opportunities for WeLab Bank in 2021?

Tat Lee: With a total of eight new virtual banks in the market, coupled with the fact that the concept of ‘virtual bank’ isn’t always clear, the stakes are very high. One of the challenges WeLab Bank as well as other virtual banks have  to encounter is to educate the market on the key difference between virtual banks and traditional banks.

To gain market awareness, all virtual banks  are actively offering perks for opening accounts  by offering cash rewards, bonus points, to merchant discounts in order to attract early adopters.   In 2021, we anticipate all virtual banks to be more mindful of costs, hence curtailing their spending.

At WeLab Bank we aim to continue building brand trust in our first full year of running in 2021. A pertinent message for our current and potential customers is that, like any other traditional bank, we are regulated by the Hong Kong Monetary Authority and depositors are protected under the Deposit Protection Scheme.  As much as we can,  WeLab Bank distinguishes itself from the competition by innovating its product stack.

TDB: How is WeLab Bank differentiating customer experience and enhancing its products and services in 2021, given the fact that HKMA has approved 7 other virtual bank licenses and that other retail banks are also strengthening their digital initiatives.

Tat Lee: While I cannot comment on other virtual banks, at WeLab Bank we aim to help the next generations Manage, Save and Grow their money.  Based on our research, there are three million people in Hong Kong who are “underadvised” on how best to bank based on their personal needs.

These customers are overlooked majority of the time, with banks maintaining “little to no” relationship with them primarily due to balance thresholds.  On the other hand, WeLab Bank provides essential banking services like deposits, card, and loan products that help our customers manage and save.

As we speak, I can tell you that, we are set to increase diversity in our product range to better serve our customers, and take them on a holistic banking journey while also empowering them to take control of their finances. At WeLab Bank, we believe it is vital for the ‘underadvised’ to grow their money. Hence, this is why a range of wealth management products is part of our roadmap.

TDB: What are the ways in which WeLab Bank harnesses technology to create and foster greater levels of personalization for its customers?

Tat Lee: We combine human needs and digital solutions to address a customer’s financial journey pain points. In our team of experienced professionals from both the financial services and technology industries – we believe we have a good understanding of  our customers’ needs. This helps us prepare ahead of time, deploy the required technology and always be ready with insights to improve one’s current spending, savings, and investments, enabling one to accomplish financial goals.

Speaking of personalisation of financial services for customers, in March 2021, we formed a strategic partnership with Allianz Global Investors to introduce digital wealth management solutions for our customers. The first phase of this partnership will include the development of wealthtech advisory solutions to empower our next-gen to invest better.

TDB:  According to The Digital Banker, emerging players such as WeLab Bank are re-shaping some of the mandates related to retail banking. Could you talk to us about some of the mandates that you and your team are trying to achieve/re-shape in the short term and long term?

Tat Lee: I believe, our mandates come from the next-gen banking customers. Specifically, our customers need help and advice on how best to manage their finances. We also understand that, the next generation is not particularly looking for a bank per se, they are looking for an advisor to keep them abreast of the various products and services available, to better manage their finances.

Hence, we took our customer’s mandates for us and applied Fintech-like solutions to bring about a vision of what banking for the next generation can look like.

TDB:  Based on your experience in the banking industry, talk to us about what the future of banking industry looks like? What are the keys trends for the next 5 years?

Tat Lee: I do not have a crystal ball, but I would say that we have already begun to see the emerging trends. Some of them according to me are:

  • Adoption of technology not only by the younger generation, also among the older generation.
  • The power of social engagement, will continue to forge its mark in the banking industry like never before. Peer advice and affirmation on best banking products will play a key role in influencing product adoption.
  • The agility and robustness with which challenger banks introduce new products will determine dominance in market share. Also, the ability to cement relationships with smart relevant advice will significantly affect market share. A phase of consolidation will also occur in the near future.
  • The most interesting to me will be the overhaul of the talent pool by traditional banks in the next five years. Core skill competencies that banks once looked for in new young recruits could no longer be relevant.  Skills like rote learning, routine process adherence, relationship management prowess in servicing high net worth customers may well be replaced by the competency to think out-of-the-box and advise on the basics of manage, save and grow the next-gen money.

To wrap up this interview, I believe, it will be  the willingness and foresight of the upper echelons of our industry, to adopt new ways of banking and performance management, and determine  which banks will win hearts, trust and in the end a chance to build a fruitful relationship with the next generation.

US-China Relations Wide Ranging Issues 2

US-China Relations: Wide Ranging Issues, At Risk of Boiling Over

by FeaturedGlobal Private BankerMagazineTop Stories

In July this year, the Chinese consulate in Houston had been ordered to close its doors by the US government. This development is just one out of the many conflicts plaguing these two economic giants. Nothing like this has been seen in decades between China and the United States.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly. The most notable ones are as follows:

COVID -19

In some of the interviews granted by Donald Trump, he was heard several times referring to the coronavirus as ‘Chinese Virus’. His reasons lay with his staunch belief that the Chinese government failed to give accurate reports concerning the extent of the damage caused by the disease. He believes that their government simply ignored its duty to report to WHO since the first case of the virus was documented on Wuhan in 2019.

However, China insists that it has been nothing but transparent since the onset of the pandemic. Following Trump’s accusations, the World Health Organization has denied its involvement in supporting the disinformation by the Chinese. In response to this, the United States President Donald Trump formally started the withdrawal process from WHO, making good on his threats to deprive the UN body of its top funding source over its dismal handling of the pandemic.

HONG KONG

Tensions have clocked to a new height between the US and China. Recently, protests arose as a result of Beijing’s imposition of a new security legislation over the previous colony of Britain, which returned to China in 1997.

In response to this imposition, Donald Trump has signed a sanction effectively severing preferential economic treatment for Hong Kong. This move will allow him to place visa restrictions and sanctions over financial institutions and Chinese officials who’d been involved in enacting the new security law.

Predictably, China threatens to counter with a retaliatory move of their own in no distant time.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly.

SOUTH CHINA SEA

Until 2020, the Chinese has always laid claim to ninety percent of the South Sea. Meanwhile, Malaysia, Brunei, Vietnam, Taiwan and the Philippines has actively contested this claim.

Currently, the United States has hardened its stance in the matter, tilting towards the other Asian countries. The US believes that China has plans to build a Maritime Empire in the energy rich sea.

On July 13, 2020, Mike Pompeo, the US secretary of state, issued a statement that accused Beijing of a bully-based campaign and its claim, unlawful.

HUAWEI

The tech company based in China has been added to the US ‘Entity list’ In 2019, the US suspected the company of violating their sanction on Iran and can spy on customers through their devices. This security concern led Washington to add Huawei to its ‘Entity list’

However, Huawei has vehemently denied every one of the allegations and accused Washington of frustrating its growth because no American company can compete with their prices and tech savvy.

Washington has gone ahead to push other countries to drop Huawei, posing the same violations as their reason. The friction between the two has caused a serious decline in their access of Chips and other important parts from their US suppliers.

NORTH KOREA

According to the US, China has breached their sanctions on North Korea. Though Beijing has denied the allegations, tensions continue to rise.

The common goal of both countries is for North Korea to give up its nuclear weapons program and as such, should work together. Yet, that is far from happening. The Chinese government has agreed to lift some of its sanctions over North Korea but the United States does not agree.

Kim Jong Un, the leader of North Korea has met with Donald Trump thrice in an effort to ease the US sanctions but failed to agree every time. While US requires them to give up the nuclear weapons in Pyongyang, North Korea wants all the sanctions, lifted.

Nevertheless, the number-two diplomat, Stephen Beigun remains optimistic. In an interview, he opined that the two countries might still work together in spite of the dispute because of the greater good of ceasing the development of nuclear weapons by North Korea.

UIGHURS

The Uighurs are a minority Muslim group that reside in the western Xinjiang region.

The Chinese government set up complexes in that remote Xinjiang called Vocational training centers. They have been condemned for trying to stamp out what they term as extremism and have the Uighurs acquire new skills within the complexes.

Following the discovery of the violation of Uighur’s human rights, the US has placed sanctions on all the Chinese institutions, officials and companies.

A Better, Safer World

The relationship between the US and China is reaching a dangerous point. The already fragile relationship is on the brink of total collapse and we could only hope that in the coming days, the relationship could improve for the better. People from all over the world are pinning their hopes that the result of the 2020 US presidential elections will provide a pathway for calmer, more collaborative partnership between the two great powers.

As a famous world leader once quipped: “If we cannot now end our differences, at least we can help make the world safe for diversity.”

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

Image: Robert Way/Shutterstock.com

How Sustainable Finance Impacts Consumer Decisions

How Sustainable Finance Impacts Consumer Decisions

by FeaturedMagazineTop Stories

Sustainable finance focuses on financial investment in the long-term. Its essence has to do with funding businesses contributing to sustainable development as a way to use the economy to drive positive change. This involves lending support across healthcare, education, and even to small businesses. There’s no better time when this is needed than now.

Today, the pandemic has had a scarring impact on households and small businesses. Many people have lost their jobs, and a lot of small businesses are shut down for good. There is no better time for financial institutions to work to provide relief for less fortunate households and businesses. Not doing anything to make a positive impact on society at this time is not only unethical, but it could adversely affect the business in the long run.

This is evident from an EY research, which revealed that many consumers (more than half) value responsible banking and that their “purchasing patterns and financial institution loyalty will be impacted by financial institutions actively supporting the community.”

This research makes it evident that financial institutions investing and providing support to the community is not only ethical but will benefit such companies, business-wise.

Many consumers (more than half) value responsible banking and that their “purchasing patterns and financial institution loyalty will be impacted by financial institutions actively supporting the community.”

No longer business as usual

In the face of adversity caused by the pandemic, and the accelerating digital revolution that has already taken the world by storm, financial institutions must be at the forefront, taking measures to enhance the nature of their business. In a post-pandemic world, consumers will prefer to stick with the newer models of business since they’re less stressful and offer more comfort. In addition, they will provide strong support to companies that contribute to the betterment of the society and future generations.

Overall, this is a huge advantage for financial institutions as they can cut down on expenses and overhead cost of maintaining physical branch networks. The savings to be had as a result of these efforts can then be channeled towards driving sustainability initiatives that benefits everyone. There’s no better time to take advantage of technology and invest more in digital solutions in banking than now. It’s no longer business as usual everywhere, and financial institutions must leverage on these changes for the benefit of all.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

How the Pandemic is Forcing Wealth Managers to Evolve

How the Pandemic is Forcing Wealth Managers to Evolve

by FeaturedGlobal Private BankerMagazineTop Stories

The Covid-19 pandemic has affected the entire globe in an unprecedented manner. It has presented the world with a humanitarian and health challenge that can only be combated by deliberate and hard-fixed actions. With an increase in mortality rates across the globe, many nations remain perplexed about issues brought about by the pandemic. And as a matter of urgency, people affected by the virus need adequate support. There is also a need to create a vaccine to combat death rate and stabilize activities across the globe.

Besides the direct effect of the virus on human lives and livelihoods, it is also essential to consider its impact on the industrial and economic facets of various nations around the world. And that wealth-management systems have also been hit by the pandemic sheds more light on why firms need to come up with practical and strategic responses to the situation.

In light of the COVID-19 pandemic, wealth-management businesses are currently faced with two different circumstances. First, they can procure updated digital plans that may include educating their customers on how to maximize their digital extensions. Secondly, the pandemic undoubtedly presents wealth-management firms with a temporary problem of customer inactivity.

Considering that the degrees to which clients would utilize digital service will inevitably differ, wealth management firms should seriously consider providing digital strategies and action points for their clients.

If investors are going to be reassured of their investment portfolios with wealth-management firms, a strengthening of engagement metrics would be necessary.

The Evolving Role of Wealth Managers

Wealthy investors would want to have updated details of their investments, alongside other conditions such as maintaining market neutrality in the face of high uncertainty. To keep clients feel reassured of the status of their investments, firms must take strategic actions to arrest any worries.

If investors are going to be reassured of their investment portfolios with wealth-management firms, a strengthening of engagement metrics would be necessary. Firms should consider improving their online presence and be more in touch with the pulse of the market. They can also equip portfolio managers with sophisticated communication tools like investment notes, video content and podcasts to deliver investment policies and philosophy to clients. When contacts are made continuously from the company’s leadership (relationship and portfolio managers) to the client, clients get to be reassured of the financial status of the firm.

Consistent communication among firm’s leadership is also highly important. Given the importance of relevant updates to clients’ portfolios, managers must keep updated tabs on the market fluctuations. Meetings for portfolio update can be integrated into the workflow of the wealth managers – and must be done consistently. These are necessary for understanding the impact of the change on clients’ investments. 

Relationship managers are basically at the core of the relationship between wealth-management firms and their clients. They are to possess detailed knowledge of clients’ portfolios and be able to rebalance them for improved security and sustainability. Relationship Managers may also have to be guided by tax professionals if clients are going to have all their tax-related concerns addressed.

Wealth management techniques and tools can be harnessed to keep relationship managers updated about clients’ portfolios. And relationship managers could increase their reliability by test-running their methods of analysis – mainly their automated rebalancing processes – before implementation.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

The Risks and Rewards of Going Cashless in a Digital World

The Risks and Rewards of Going Cashless in a Digital World

by FeaturedMagazineTop Stories

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries in the world with the highest volume of cashless transactions. Elsewhere in the world, the cashless revolution is being spurred by fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square. These corporate giants have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

Even as we grapple with the factors that are going to affect our move towards a cash-free society, the pros and cons of living in such an idyllic world must be carefully weighed.

“Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

BENEFITS:

Convenient Payment Locally and Internationally

Aside from avoiding the hassle of not being able to avail of desired products of services for lack of cash in your pocket, going full cashless also allows you to leave any worries behind when you travel. You don’t need to worry about exchange rates or currency withdrawal as your mobile device could handle everything for you.

Reduced Illegal Activities

Cash is always the preferred medium in many illegal transactions as it provides no money trail and every person involved in the transaction can go completely anonymous. Those days could end in a cashless society. As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

Increased Safety and Security

Carrying cash around entails risks and makes you an easy target for criminals. Once cash has been taken away from you, it now becomes a criminal’s possession which can be spent without any trace that they were yours.

Printing Money Costs Money

Going cashless is not only convenient, it also saves money. Printing coins and bills have costs. Storing those bills and moving them around have costs. Even storing them costs money. Businesses that churn a lot of cash have to deposit them, withdraw them and keep moving in order to keep the business going. All of these problems will go away once we get rid of the physical cash.

As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

RISKS:

However, depending on how you look at it, going cashless can actually entail more risks than benefits. Some of these are:

Full Access to Funds Might Not Be Guaranteed 

Once you become dependent on technology to get access to your funds, then problems such as glitches, virus, computer error, and even innocent mistakes could prevent you from being able to spend your money. Moreover, merchants that encounter compatibility issues or system malfunction may not be able to accept your payment even if you have enough funds to do so.

Additional Charges by Payment Processors

Moving to a cashless society might entail selecting a few payment processors to handle payment transactions. These payment processors are companies that have invested time and resources to create a product that could handle the task. As such, some form of fees must be implemented in order to recoup their investment. The resultant effect could be higher total cost of transaction instead of savings, purportedly touted due to less cash handling.

Increased Privacy and Security Concerns

Regardless of the amount of encryption, security and safeguards being implemented, electronic payment always entails risks of mishandling data. With the amount of information that will be generated with the continued adoption of electronic payment, malicious elements will be harder at work to get their hands on these data. On the contrary, cash transactions are always anonymous – and to some degree, safe.

Your Funds Can Be Hacked  

While there is zero chance that a robber or a pickpocket could steal from you, hackers could actually do you more damage. It’s not unlikely that if someone is targeted by a particular hacker, his funds could be dried up, leaving you with absolutely nothing in your account at all. Even if there are some form of paper trail, restoring your funds after a breach could be complex and time-consuming.

Will cashless ever be possible for all?

If history has anything to teach us, it is that the world is constantly evolving. With the rise of e-commerce and digital payments, it is not impossible to say that physical currencies will soon be obsolete. What’s important to note is that every country in every region are moving towards this ideal at their own pace. The march for progress continues. For now, we have credit or debit cards, mobile payments and crypto/digital currencies that give us hints as to how a cashless society might evolve. Who knows? Something even more revolutionary might come along.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

3 Factors That Will Accelerate the Cashless Revolution

3 Factors That Will Accelerate the Cashless Revolution

by FeaturedMagazineTop Stories

The COVID-19 pandemic has spared practically no one. In all corners of the world, with people from all walks of life, everyone is talking about a new normal, barely less than a year after the crisis starts. One of the most hotly debated topics of late is whether we are now heading towards a fully cashless society. Will 2020 mark the start of a process when we completely banish cash as a medium of value exchange?

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries with the highest volume of cashless transactions. From food to clothing to the latest gadgets and games, people, regardless of age or social status, are using some form of digital medium to pay for goods and services in China.

China is truly a trailblazer in the “cashless” movement. According to figures from eMarketer, “mobile payment users in China will represent 61% of the 947.1 million proximity mobile payment users worldwide.” Furthermore, 577.4 million people in China made a purchase via proximity mobile payment within a six-month period in 2019. “Those users account for 49.6% of the country’s population,” says eMarketer.

This astounding growth is enabled by leading Chinese fintech firms, Alibaba (Alipay) and Tencent (WeChat Pay). Reports from Forbes revealed that “Alibaba’s revenue grew 144% over 2017-2019 to $56 billion.” Meanwhile, Tencent reported a total annual revenue of nearly 377 billion yuan in 2019, an increase by 20 percent compared to the previous year,” according to figures from Statista. Surely, the rate of growth of these companies is reflective of the Chinese population’s fondness for digital medium.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

PayPal added that it was growing across all markets including those most impacted by the coronavirus pandemic such as Spain and Italy.

Factors that will affect drive towards cashless society

While all signs point to an inevitable shift to a cashless society, there are real and significant issues that must be addressed first before we declare the death of cash. Some of these are:

Technology

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data. In addition, China has also invested significant amount of resources to develop e-RMB, the first digital currency operated by a major economy. Through and through, technology has played a central role in mounting these efforts.

Similarly, in Sweden, a group of six large Swedish banks have joined together to develop Swish, a mobile payment system that boasts of more than 6.5 million users as of 2018. Today, Swish is used by almost all merchants in Sweden as the de facto payment option along with payment by card. Payment by cash, in fact, will earn you some frown as almost very merchant prefers card or payment by Swish mobile app.

In the US, the charge is being led by unicorn fintech companies that have found a way to embed their technology into the lives of online customers locally and abroad. Famous global brands such as Under Armor, Target, Lyft, Grab, Deliveroo, Facebook, Google and Uber, for example, are all using Stripe, an online payments processor for internet businesses.

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data.

Culture

For a cashless society to truly thrive, there must be a widespread shift in cultural norms. Whereas some societies have generally been more open with new technology and innovation, some communities are averse to digital technology because due to the inherent security risks involved. Moreover, the digital divide between the highly industrialised and developing nations couldn’t be denied. As such, customs and beliefs among the population on what constitutes ‘value transfer’ may be hard to shift.

Government

Governments, and people’s trust in them, play a crucial role in pushing the agenda of a cashless society. A purely digital value exchange requires management and security of enormous amount of data. Hence, the population must be able to see that the ultimate custodian of their financial transactions, are trustworthy and capable. Perhaps it would be good to start building momentum by capitalising on familiar government-led initiatives such as smart-nation. By touting the benefits of smart-nation, an argument for a digital value exchange on a national level can be made.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

COVID-19 Pandemic and The Era of Responsible Banking

COVID-19 Pandemic and The Era of Responsible Banking

by FeaturedMagazineTop Stories

An industry that has been able to weather crises such as SARS, Ebola, 9/11, Asian financial meltdown and of course, the 2008 financial crisis, otherwise known as The Great Recession, is nothing less than resilient. Amidst the ongoing uncertainty brought about by the COVID-19 pandemic, the banking industry is once again facing an enormous challenge, the likes of which are totally unprecedented in scale.

Instantly, the impact on the economy started to reverberate across all regions. According to The Center for Global Development, an international think tank that focuses on international development, “travel restrictions and lockdowns imposed to contain the spread of COVID-19 continue to impact the economic outlook for low- and middle-income countries.”

In Asia and the Pacific, economic growth is expected to decline by 2.7 percent in 2020 (down from last year’s 3.6 percent growth) and is seen as the most significant fall since the near-zero growth rate logged in 2009 during the global financial crisis, according to APEC. In addition, Asia-Pacific will also see a 50% decrease in passenger demand this year compared to last year. As a result, airline passenger revenues is estimated to record a revenue decline of $113bn compared to last year.

DBS, Southeast Asia’s largest bank, reports a 29% drop in first-quarter year-over-year net profits, setting aside $772.5 million “to cover potential losses from the coronavirus pandemic.”

Meanwhile, Latin America may experience a contraction of income between 11% and 22% according to a simulation by the Bank of Spain. Moody’s predicts a 6% contraction for Argentina’s economy for 2020, 5.2% for Brazil and 7% for Mexico.

Brazilian government minister Salim Mattar estimates that “the unemployment rate in [Brazil] may even double due to the impact of the coronavirus crisis on the economy.”

Not spared from economic shocks, Africa’s growth is also estimated to slow to 1.8 percent in the best-case scenario or to contract to -2.6 percent in the worst-case scenario from the 2.9 percent in 2019 and the pre-pandemic 2020 forecast of 3.2 percent, according to The United Nations Economic Commission for Africa.

Overall, the World Bank warn that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.”

“Global poverty — the share of the world’s population living on less than $1.90 per day — is projected to increase from 8.2% in 2019 to 8.6% in 2020, or from 632 million people to 665 million people,” World Bank adds.

Overall, the World Bank warns that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.

The Era of Responsible Banking

Since 2008, in the aftermath of the global financial crisis, banks have made significant steps to take action and create products that are better aligned with the social and environmental values of the clients, not just because regulators have demanded it, but because society expects it. Moreover, it has proved to be beneficial to the bottom line.

Formally, this is now known as Principles for Responsible Banking (PRB). The Principles for Responsible Banking were launched by 130 banks from 49 countries, representing more than USD47 trillion in assets, on 22 and 23 September 2019 in New York City, during the annual United Nations General Assembly.

At the end of March 2020, as the world sees the rapid spread of COVID-19, the PRB group called on its signatories to take action to support society and businesses in this unprecedented crisis. More than 150 banks joined the call and were in fact, doing more than what their governments are asking them to do when it comes to supporting small businesses and unemployed individuals.

The examples of how banks are helping societies during the collapse of an economy is aplenty.

For example, in the US, banks have become the predominant channel for its Paycheck Protection Programme, a $659 billion aid programme for small businesses. US regulators have also eased restriction to allow banks to tap into their capital reserves so they can continue lending.

In Switzerland, regulators and banking institutions worked together to provide loans for businesses who only need to fill out an online form and if approved, the loan could be disbursed to their accounts the next day. Likewise, in South Africa, filling in a form is not even needed as banks were allowed to adopt ‘opt-out’ models making it easier for loans to be extended. And in China, banks worked closely with regulators so loans and extensions could be fast tracked.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions.

Elsewhere, in The Netherlands, ABN Amro has extended an automatic six-month deferral on payment of principal and interest for clients with a credit facility of up to 50 million euros. And in Singapore, DBS Bank is allowing credit card holders to roll repayments into a single loan, effectively cutting rates from more than 20% to high single digits.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions. Through various measures such as rate cuts, liquidity support and easing of financial policies, the world’s central banks are playing a crucial role in preserving economic stability during this crisis.

Commitment to Move Forward

While the proverbial light the end of the tunnel may not be very clear in sight yet, COVID-19 and its impact already highlight the importance of keeping sustainability and responsibility at the forefront of banking agenda. Banks that have been committed to responsible banking are seeing good progress and are in fact, dealing better with the COVID-19 crisis.

Through the Principles of Responsible Banking, understanding the needs of all stakeholders becomes a paramount concern, and as such, it allows decision makers to understand the potential impact of any decision during a crisis.

However, any principles and proposals around responsible banking may come to naught if these aren’t backed by commitments and tangible targets. The new normal may come sooner than expected, or later than hoped. What’s important is to continue to look out for each other. After all, doing business is all about helping our customers and our people.

6 Steps to Secure Privileged Access for Remote Admins

6 Steps to Secure Privileged Access for Remote Admins

by FeaturedMagazineTop Stories

While many organisations already have telecommute policies and solutions in place, they are most commonly for either fully-remote workers or for employees who typically work in the office but need flexibility for unusual situations. The current environment most companies now face may put their remote workplace capabilities to the test.

This is most pronounced when considering security controls, cyber-hygiene, and reducing risk exposure that a more remote workforce creates. Are organisations prepared for such a distributed workforce and the potential risks that come with it?

When it comes to IT administration teams, outsourced IT, and third-party vendors who might have privileged access to systems and infrastructure, they need secure, granular access to critical infrastructure resources regardless of location and without the hassles of a virtual private network (VPN). Ideally, how privileged users access these systems shouldn’t be different, regardless of whether they are in an on-premise data center or accessing remotely.

Ditch the VPN

Last year it was reported that Citrix was breached through a password spraying attack that also sought to leverage VPN access. ARS Technica also reported last year that energy companies have specifically become targets of attacks that use password spraying and VPN hacking.

Unlike a VPN that generally gives users visibility to the entire network, organisations should only grant access to resources on a per-resource basis. This gives privileged internal IT admins access to only as much  infrastructure as necessary, while limiting access by an outsourced team to only the servers and network hardware their role requires.

Privileged users should authenticate through Active Directory, LDAP, or whatever the authoritative identity store is, or grant granular, federated privileged access to resources for business partners and third-party vendors.

Guard against cyber-attacks by combining risk-level with role-based access controls, user context and MFA to enable intelligent, automated and real-time decisions for granting privileged access to users who are remotely accessing servers, on password checkout or when using a shared account to log into remote systems.

Unlike a VPN that generally gives users visibility to the entire network, organizations should only grant access to resources on a per-resource basis.

Secure Privileged Access for On-Site and Remote Administration

Here are six ways any organisation can create consistency in their privileged access management (PAM) approaches to secure remote access to data center and cloud-based infrastructures through a cloud-based service or on-premises deployment.

  1. Grant IT administrators secure, context-aware access to a controlled set of servers, network devices and Infrastructure-as-a-Service (IaaS).
  2. Enable outsourced IT without the need of including administrators in Active Directory.
  3. Control access to specific data center and cloud-based resources without the increased risk of providing full VPN access.
  4. Secure all administrative access with risk-aware, multi-factor authentication (MFA).
  5. Single secure access point for administrators to manage infrastructure using shared accounts or their own Active Directory account.
  6. Enable secure remote access to data center and cloud-based infrastructures for internal users, third party vendors and outsourced IT through a cloud service or on-premises deployment.

Many organisations may think they are ready for a larger remote workforce, including privileged administrators. But relying on VPNs rather than maintaining consistent security processes, policies, and postures will create more exposure and risk. Step up your secure remote access game and enable intelligent, automated, real-time decisions for granting privileged access.

>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

The State of Open Banking in 2020

The State of Open Banking in 2020

by FeaturedMagazineSliderTop Stories

Open Banking has quickly leapfrogged from a mere concept some two years ago, to almost an inevitable reality today. In 2020, we expect a further acceleration of its adoption spurred by aggressive moves and consolidation by the dominant players in the banking industry.

What started with PSD2 regulation in Europe in 2018, Open Banking is now being adopted in various regions around the world such as Australia, several parts of Asia, Latin America and many other regions. PSD2 or the second Payment Services Directive, is designed by the countries of the European Union which aims to revolutionise the payments industry. Its goal is to break down the bank’s monopoly of their user’s data and allow third-party merchants to retrieve your account data – with your permission – for the purposes of providing better and more efficient customer experience.

What started with PSD2 regulation in Europe in 2018, Open Banking is now being adopted in various regions around the world.

As security is a key concern and one of the most important issues to be addressed for open banking to be truly successful, PSD2 requires stronger identity checks when paying online and will likely involve even more checks when high value transactions are involved. At this point, the specifics are still being ironed out and various countries are in various stages of implementation but suffice to say that it has now reached a stage when the early movers will reap the most benefits and the laggards will be left behind by their competition.

The State of Open Banking in 2020 2

Who Owns Your Financial Data?

In the age of digital banking, the open banking movement is raising a very important question, an answer to which spurs far-reaching consequences: Who owns banking data?

For the longest time, traditional banks have maintained custody of their customer’s banking data, putting up infrastructure and investing in resources to safeguard that data. Now that consumers have the ability to quickly move their money through so-called fintech apps, access to that data serves as a key enabler to make it happen. In the US, start-ups like Plaid and Teller are leading the charge.

According to reports, Plaid, a “San Francisco-based start-up, founded by two former Bain consultants, connects bank accounts to thousands of apps and helps consumers develop a complete picture of their financial data. The company, valued at $2.7 billion, has attracted investments from the venture arms of Goldman Sachs, Citi, Google and American Express.” Basically, it develops APIs to make it easy to share banking and other financial information.

Plaid powers the majority of fintech apps in the U.S., including the popular app Venmo, and is rapidly expanding overseas. It is so successful that financial giant Visa, announced “a $5.3 billion acquisition of Plaid,” which was announced at the beginning of 2020.

One of Plaid’s competitors, Teller, has also embarked on the same open banking mission. According to report, the fintech start-up has “quietly raised $4 million in seed capital from a slew of U.S. investors.” It comes to a market with a better proposition saying that, “unlike Plaid, Teller’s technology is not built using screenscraping, and therefore is “more reliable and performant,” said Teller co-founder Stevie Graham in an interview with TechCrunch.

“The open banking movement is raising a very important question: Who owns banking data?”

Open Banking Around the World

The US is far more advanced though compared to other countries when it comes to open banking. While the UK and Europe has been the so-called frontrunners, implementation and compliance with set deadlines still remains a challenge. In other parts of the world, a softer, non-disruptive approach is being taken to ensure everything proceeds smoothly. Here’s a snapshot of what’s happening elsewhere in the world (source: Open Banking Report 2019)

Australia

The Australian Government had decided to phase in Open Banking – consumers can direct the major banks to share credit and debit card, deposit and transaction data from July 2020, and mortgage and personal loan data from November 2020.

Singapore

The Singapore Government is committed to an organic transition towards Open Banking, more than a coercive framework of deadlines. The Monetary Authority of Singapore (MAS) encourages financial institutions to adopt APIs as a key foundation layer for innovation. Along these lines, together with the Association of Banks in Singapore, MAS launched a Finance-as-a-Service API Playbook. With the Finance-as-a-Service API Playbook, banks have a common guide to identify and develop APIs.

Hong Kong

The monetary authority released a report on open APIs, a first step for the development of the ecosystem, with recommendations on standards and protocols, as well as an implementation schedule.

Japan

The government and industry are collaborating on a commitment set by Prime Minister Abe for at least 80 banks to establish open APIs by 2020. Amendments to Japan’s Banking Act in June 2018 established requirements for partnerships between fintech payment operators and financial institutions, aiming to formalise registration rules, standards, and the development of open API systems by June 2020. This focuses initial open API requirements on the payment industry, as part of a broader push to increase the role of non-cash payments in Japan.

Malaysia

In January 2019, the BNM (Bank Negara Malaysia) released its Policy Document on Publishing Open Data using Open API (the Policy Document), which set out the BNM’s guidance on the development and publication of Open Application Programming Interface (Open API) for open data by financial institutions. The BNM aims to encourage open banking through the use of Open API, which enables third-party developers to access data without needing to establish a business relationship with financial institutions. While not mandatory, financial institutions are encouraged to adopt Open Data API Specifications recommended by the Open API Implementation Groups for credit card, SME loans and motor insurance products.

Mexico

Implementation is not expected until the secondary dispositions of the fintech law are due in March 2020. Implementation will likely take place in phases, with the first phase requiring a regulatory sandbox to test Open APIs. Regardless, Mexico’s embrace of Open Banking pushes its fintech sector further ahead of most other countries in Latin America.

Switzerland, Indonesia, and China have also initiated moves towards Open Banking. However, adoption remains limited.

South Korea, Bahrain, Brazil, Canada, and Thailand are chasing closely behind as fast followers.

At the earliest stage of development are the US, Chile, Nigeria, Kenya, and Rwanda.

The State of Open Banking in 2020 1

Open Banking Initiative On A Bank Level

While several strategic initiatives are happening at a macro level, banks are taking their own initiatives to move ahead and win in a world where Open Banking is the norm. One of which is Taiwan’s Taishin Bank, Winner of Best Open Banking Initiative at the recent Global Retail Banking Innovation Awards 2019.

Taishin Bank’s Richart was developed as an open bank, which integrates all the services that customers need in one platform.

From account opening, saving money, investing, to foreign currency exchange, Richart and its partners created a user-centric digital environment to respond to users’ expectations, providing customers with more innovative and complete financial services with partners from different industries, including the telecom company, FinTech start-ups and insurance companies.

Through its strategy, Taishin Bank conquered three major pain points of its customers:

Information isolation

In the past, customers need to fill out replicated application forms when they apply for different financial services. To save time for customers, Richart used open API to transfer customers’ information between different partners and help customers fill out forms automatically. Once customers become Richart members, they will no longer need to fill out forms when they apply for other financial services on Richart App. By simply clicking a few buttons, customers can easily complete their application of various financial services such as insurance purchasing, foreign currency exchange, and investing.

Service isolation

Taishin Bank provided customers with a service that meets all their needs in one versatile platform. Customers in Taiwan usually have 5 or 6 different accounts to manage different services such as insurance, foreign currency, investment etc. – but with Richart, they only needed one account. Customers no longer need to memorise several different accounts and passwords. In addition, they are able to manage and keep track of different financial products in one App and one account.

Channel isolation

Taishin Bank has also extended Richart’s financial services to LINE, the most popular instant messaging APP in Taiwan, allowing more than 6 million customers to enjoy its services more easily and conveniently. With this breakthrough, customers can now enjoy financial service to check their transactions and reach out to Richart customer service through a common channel they use every day without logging in the banking App.

Through the competitive and integrated products Richart provides with its partners, they have attracted more than 1,400,000 applications for Richart’s saving accounts – more than 70% of them are aged 35 or under, and more than 74% of them are first-time customers for Taishin Bank.

Also, via the partnerships with FinTech startups and companies from different industries, they were able to provide their customers a more complete financial services without building up a whole new system. Costs related to system infrastructure, maintainance, and labour have been reduced by 30%.

As such, Richart has become the most popular digital bank in its market. According to a 2018 customer satisfaction survey, over 95 % of its customers showed high satisfaction and strong willingness to continuously use Richart and recommend it to their friends.

Open Banking Will Make You Win

The old rules of banking don’t apply anymore. As digital banking grows and fintechs continue to introduce innovation to the market at a breakneck speed, embracing this brave new world of open banking will prove to be a long-term win, even for traditional banks.

According to a survey by Accenture, 90% of bankers believe open banking will boost organic growth by up to 10%. That does not mean though that it will be a smooth ride. Indicators coming out of European banks reveal that resistance among incumbent banks will be great and that change might come slower than what’s ideal or is required. The onus will be on those banks who can see the future before it happens and are bold enough to take action, now. The future is open. Wide open.

90% of bankers believe open banking will boost organic growth by up to 10%.

>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

Standard Chartered Korea’s ‘Leapfrog’ amongst the Best of the Best

Standard Chartered Korea’s ‘Leapfrog’ amongst the Best of the Best

by FeaturedMagazineSponsored ContentTop Stories

Over the past year, the Standard Chartered Korea digital team and group team have worked tirelessly in developing an all new and next-generation mobile app – one it can be immensely proud of.

Known as ‘leapfrog’ the relatively new mobile app was awarded Best User Experience – Mobile at the Digital CX Awards 2020, hosted by The Digital Banker.

The Digital CX Awards is a gathering of the best-in-class worldwide banks that are recognised as pioneers at the cutting edge of customer experience innovation. Co-judging by subject matter experts from EY, KPMG, Bain & Company, Forrester and Wipro Digital augments this remarkable achievement for Standard Chartered Korea – especially amongst such avid global competition.

Best User Experience – Mobile

The new mobile app adorns an aesthetically pleasing user interface and offers users a state of the art mobile experience that dramatically simplifies the way customers manage their finances on the go. The all new and next generation version of the SC Mobile App delivers a reimagined ‘3.0’ experience which represents a quantum leap and a new global standard in digital banking. Many of the mobile app’s exciting new features are trailblazers in their own respect and allow Standard Chartered Korea to boast first to market status.

It’s all About the Metrics

The bank’s digital sales regained momentum post launch, with Digital Retail and Wealth products rising 44% and 36% against the Q2 2019 average. Subsequent to launch – App downloads stood at 1M, as of 2nd March 2020 and continues to grow. Eight hundred thousand clients currently actively use this feature with the number of users continuing to grow.

Multi-aggregation Technology

Standard Chartered is the first bank in Korea to have launched a mobile app affording customers an easy way to get a snapshot of their finances through multi-aggregation technology. This tech enables customers to monitor their entire financial portfolio at other financial institutions.

Further user benefits come in the way of money transfers, which the new app has made exceptionally easy: a simple sliding gesture to transfer money allows customers to send money directly to their friends via contacts or KakaoTalk messenger, the no.1 messenger app in Korea all this without requiring their bank account information.

Everything in One Place

Standard Chartered Korea’s multi award-winning ‘Self Bank’ app, mobile sales and onboarding app- designed for non-face-to-face digital interactions- and digital wealth capabilities have been combined into the new mobile app. The result for the end user is end-to-end customer journeys from real-time onboarding and retail products purchases, to day-to-day transactions and wealth tracking.

Enhanced Security and Access

The bank set out to create new ways to authenticate its customers for easier access with greater security. Customers can now choose their preferred way of accessing the app among various digital authorisation technology, such as fingerprint, face recognition, iris recognition, mobile token and a blockchain based digital certificate.

The Challenger Landscape in Korea

Challenger banks and fintech players in Korea began establishing their businesses in 2017. Similar to the vast majority of challenger banks across the world- the offering is a pure-play mobile / online banking application with an innovative UI/UX, combined with simplified processes. There are a select number of challenger players that have recently achieved a level of success in Korea’s digital banking space. Such success can almost undoubtedly be attributed to the increasing trend of the Korean mobile market moving towards a single integrated mobile application.

With an accurate assessment of the threats posed by such challengers, Standard Chartered Korea’s response was to create something that is meticulously designed and engineered for the new digital age. The bank’s team purposefully refined every detail from the ground up to provide customers full control of their finances in a single application. The new mobile app signifies a tremendous step toward the bank’s goal of providing superior user experience.

Read more about the winners at the Digital CX Awards 2020 here.

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Download the magazine print version of this article here.