7

/ BANKING TODAY / JANUARY - FEBRUARY 2020 封面故事COVER STORY

We believe the banks that will be successful in the long run will be the ones that have a comprehensive data strategy and that can leverage their data to increase revenue, and enhance regulatory compliance and operational efficiency.

我們相信成功的銀行將是擁有全面數據策略，並可以利用其數據來增加收入、增強符合監管的合規性和營運效率的銀行。

Embracing Digital Transformation Managing Non-Financial Risks Key to Navigating 2020數碼轉型 穩中求進 再創輝煌

2019 was a challenging year for banks in Hong Kong. The low interest rate environment and muted loan growth throughout the year continued to squeeze margins and revenues. The year also saw an increasingly competitive landscape in Hong Kong with the issuance of eight virtual bank licences by the Hong Kong Monetary Authority (HKMA). The launch of these new players has been keenly anticipated – not just in Hong Kong, but also across the rest of Asia – and will spur greater competition for customers and market share once they commence operations later in the year.

At the same time, the growth of non-financial risks also contributed to the revenue challenge for banks in 2019. In particular, third party risk management and cybersecurity risk are becoming increasingly important as banks continue along

their digital transformation journey, while regulators continue to place a greater focus on conduct and culture. Sustainability and climate-related risks are also coming to the fore with the world now at a critical juncture in its efforts to combat climate change.

We are likely to see slightly downbeat financial results for 2019 across Hong Kong’s banking industry. With revenue a challenge, many banks have sought to embrace digital transformation and manage costs to streamline operations, increase efficiency, and ultimately ensure that they continue to grow and remain profitable.

These challenges for banks are expected to persist in 2020, with rapid change the new constant. In KPMG’s recently published annual Hong Kong Banking Outlook[1],

2019年對香港的銀行來說是充滿挑戰性的一年。全年的低利率環境和緩慢的貸款增長繼續為利潤和收入帶來壓力。今年香港金融管理局（金管局）發出了八個虛擬銀行牌照亦令香港銀行業的競爭日趨激烈。香港及整個亞洲其他地區市場都對這些新型銀行抱有熱烈的期望，相信這些新型銀行在不久將來開始營運時將引發客源和市場佔有率的更大競爭。

與此同時，非金融風險的增長亦增加了2019年銀行收入的挑戰。值得留意的是，隨著銀行繼續發展其數字化轉型，第三方監管和網絡安全風險變得越來越重要，而監管機構亦更留意虛擬銀行的行為和文化。可持續發展和與氣候相關的風險也在當今世界應對氣候變化的緊要關頭顯得更為重要。

我們很有可能會看到香港銀行業在2019年的財務業績有下滑的趨勢。面對利潤減少這挑戰，許多銀行試圖採用數字化轉型及管理成本以簡化運營模式，提高效率並希望最終能確保它們業務能繼續發展並保持盈利。

98

/ BANKING TODAY / JANUARY - FEBRUARY 2020/ BANKING TODAY / JANUARY - FEBRUARY 2020 封面故事COVER STORY

這些銀行所面對的挑戰預計將在2020年持續存在，迅速的變化亦將成爲新常態。 在畢馬威中國最近發布的年度《香港銀行業展望》[1]中，我們的專家針對該行業提供了數項預測，亦就競爭、數字化轉型和風險方面的三個廣泛趨勢作出分析。

應對競爭日益激烈的環境我們看到香港繼續處於一個瞬息萬變、競爭日益激烈的環境 。比如說，新的虛擬銀行將大張旗鼓地推出市場，如果他們在市場上取得成功，我們可預計現有傳統銀行帳戶中的存款將流入這些新的銀行的帳戶中。但我們預計這種存款過戶的影響不會很大（至少在其運營的最初幾個月內）。我們預測直到2020年底，這些虛擬銀行將分別吸引成千上萬的客戶，但我們預計虛擬銀行將僅佔銀行資產的一小部分。我們也相信只有到2020年之後，客戶才會開始將其出糧戶口轉換到虛擬銀行。

我們反而認為中小企業將有較大的影響，因為目前香港許多中小企業都得不到完備的服務或是對信貸有極大渴求。中小企業可能會傾向於轉換其帳戶至虛擬銀行，因為在虛擬銀行開設帳戶，並通過虛擬銀行獲得融資相對來說較為容易。

我們預計傳統銀行將通過更激進的定價以作出回應，尤其是在全年定期存款中鎖定定期存款。我們也預計許多傳統銀行將尋求加速其科技資訊和系統的轉型，並投資於新技術及將其數字平台升級以增加競爭力。

虛擬銀行將在未來幾個月面世，這肯定會增加市場上的參與者，但亦會成為一個更廣泛趨勢的一部分：這更廣泛的趨勢是指各行各業之間的界限將越來越模糊。許多科技和電信公司都在尋求擴展到金融服務範疇，以建立和加強與客戶

“With increased competition and continued pressure on margins, managing costs and operational efficiency in a sustainable way will continue to be a key focus for banks in Hong Kong.”

our subject matter experts offered a number of predictions for the industry, which also shed light on three broader trends around competition, digital transformation and risk.

Navigating an increasingly competitive landscapeWe continue to see a fast evolving and increasingly competitive landscape in Hong Kong. For example, the new virtual banks will launch amid great fanfare, and if they are successful we expect to see deposit outflows from traditional bank accounts into the accounts of the new entrants. However, we do not expect this impact to be material, at least during their first few months of operation. By the

end of 2020, we predict that virtual banks will have attracted tens of thousands of customers each, but we expect them to only have a minor share of banking assets. We also believe that only after 2020 will customers start to switch their payroll accounts to virtual banks.

Where we do expect to see a greater impact is in the SME space, with many in Hong Kong currently underserved and hungry for credit. SMEs may be tempted to switch their accounts as they will likely start to see an improvement in their ability to open bank accounts and obtain access to finance through the new virtual banks.

We predict traditional banks to respond through more aggressive pricing, particularly in term deposits to lock in deposits throughout the course of the year. Many traditional banks will also seek to accelerate their IT and systems transformation, invest in new technologies and upgrade their digital platforms to compete.

The launch of the virtual banks in the coming months will certainly add new players into the mix, but it also forms part of a broader trend where the lines are blurring

between sectors. Many technology and telecoms companies are seeking to expand into financial services in order to build and strengthen customer relationships across all areas of their daily lives. At the same time, the way in which people use financial services is changing, and so too are banks’ operating models.

Furthermore, competition is increasing as the mainland Chinese banks in Hong Kong continue to grow and diversify their business significantly. Hong Kong’s status as an international financial centre, offshore renminbi hub and premier regional wealth and asset management centre will help to open up new opportunities for those banks as they continue to support the overseas expansion of Chinese companies, particularly as part of the Belt and Road Initiative.

Investing more in digital transformation to save more in the long runWith increased competition and continued pressure on margins, managing costs and operational efficiency in a sustainable way will continue to be a key focus for banks in Hong Kong. While some banks will seek to make quick cuts to

在其日常生活各個領域的關係。同一時間，市民使用金融服務的方式及銀行的運營模式也在改變。

除此之外，隨著內地銀行在香港不斷發展和增加多元化業務，銀行業的競爭日益加劇。香港作為國際金融中心、離岸人民幣樞紐和主要的區域財富與資產管理中心，這優勢將為內地銀行繼續提供新機遇及在一帶一路的倡議下，繼續支持中國的公司在海外擴展事業。

投資更多在數字化轉型上長遠來説可以節省更多隨著競爭的加劇和利潤率的持續壓力，以可持續的方式管理成本和運營效率將繼續成為香港銀行的焦點。儘管一些銀行會快速削減成本，但領導市場的銀行將意識到長遠來看，他們需要進行更多投資才得以節省更多資金，他們因而會在其業務和運營模式上變得更創新。

1110

/ BANKING TODAY / JANUARY - FEBRUARY 2020/ BANKING TODAY / JANUARY - FEBRUARY 2020 封面故事COVER STORY

The really creative banks may also seek to partner with technology and consulting firms to build their own AI-enabled solutions, which can then be taken to market as a new revenue stream for the banks. This option presents a potentially lucrative opportunity to tap into a solution that can provide long-term cost savings while generating return on investment.

The rise of non-financial risksAnother key observation for 2020 is that risks continue to change rapidly, and so does the nature of those risks. In particular, we are seeing a greater focus on non-financial risks, including conduct and culture, and cyber and climate-related risks.

In 2020, banks will continue to embrace AI and cloud technology and partner with fintech firms, creating an increasingly interconnected ecosystem consisting of traditional banks, virtual banks, fintech players and other third party service providers.

All of these developments, while positive, continue to bring cyber and third party risk to the fore. We expect the HKMA to increase their focus on how banks manage their relationships with third parties and how they risk assess them. Banks

在這方面，數字化轉型將成為當務之急，以使銀行能夠減低成本和運營效率、把握新機遇並贏得新客戶。來年成功的銀行將在運用技術及採用人工智能和相關的數字解決方案方面邁出更大步。這些銀行將使用複雜的技術來解決需要大量人力及困難的流程，例如入職過程中需要做大量資料蒐集的部分，或是複雜的產品的盡職調查程序。

一些銀行也將更創新地運用外包或使用託管服務，以使流程更加自動化和提高效率。銀行將開始整合目前分散在其組織中的各個自動化項目，從而獲得對其自動化計劃更全面和更具戰略性的看法。

最創新的銀行更可能尋求與技術和諮詢公司合作，打造一個獨特的支持人工智能的解決方案並推出市場，為銀行帶來新的

“隨著競爭的加劇和利潤率的持續壓力，以可持續的方式管理成本和運營效率將繼續成為香港銀行的焦點。”

costs, leading banks will realise that they need to invest more in order to save more in the longer term, and will become more creative with their business and operating models.

In this regard, digital transformation will become an increasingly important business imperative to enable banks to improve cost and operational efficiency, capitalise on new opportunities and win new customers. The successful banks will take greater strides in the year ahead to embrace technology and adopt artificial intelligence (AI) and related digital solutions. These banks will work on more proofs of concept using complex technologies to solve labour-intensive and difficult processes, such as the research-intensive parts of the onboarding process or complex product due diligence procedures.

Some banks will also be more creative in terms of how they outsource or use managed services to make processes more automated and efficient. Banks will start to consolidate different pockets of automation projects that are currently scattered across their organisation to gain a more comprehensive and strategic view of their automation programme.

收入來源。此舉不但提供了一個潛在有利可圖的商機，在長遠來說既節省成本，又同時產生投資回報。

非金融風險的崛起2020年的另一個主要觀察是風險及其性質繼續快速變化。我們尤其看到非金融風險越來越多受關注，包括行為和文化上，以及網絡和氣候相關的風險。

銀行將在2020年繼續採用人工智能和雲端科技，並與金融科技公司合作建立一個包含傳統銀行、虛擬銀行、金融科技公司和其他第三方服務提供商相互連接的生態系統。

雖然以上的這些發展都是正面的，但與此同時亦把網絡和第三方風險置於首位。我們期望金管局將集中關注銀行如何管理與第三方的關係以及如何對其進

行風險評估。銀行其實一直都有對其客戶、主要外判服務提供者，以及某種程度上對其主要的供應商進行某種形式的評估，但銀行現時大致上並沒有一個對其所面對的第三方作全面而有效的評估的程序。

銀行的經營環境也與以往大不相同，我們因此認為銀行需要充分接受其數字化轉型的新轉變，並同時確保網絡安全及持開放的態度去面對數字化轉型，以確保其業務模式和運營不會受到擾亂。

此外，全球監管機構（包括金管局）亦越來越關注銀行如何主動管理行為風險、塑造和鼓勵公司內部推行正確文化。由於文化是造成行為操守問題的重要因素，在2020年我們很有可能在香港看到更多與行為相關的加強措施執行，這將繼續改變銀行對行為和文化的看法。儘管銀行過去

have always made some form of assessment of their customers, their main outsourcing providers, and to some extent their main suppliers – but they generally do not have a comprehensive and effective process for assessing the full range of third parties to which they are exposed.

Banks are also operating in a very different landscape than before. We believe that they therefore need to fully embrace their digital transformation initiatives while ensuring that cybersecurity and resilience become part of every digital adoption to ensure that their business models and operations are not disrupted.

1312

/ BANKING TODAY / JANUARY - FEBRUARY 2020/ BANKING TODAY / JANUARY - FEBRUARY 2020 封面故事COVER STORY

ABOUT THE AUTHOR | 關於作者

Paul MCSHEAFFREYPartner, Head of Banking & Capital Markets, Hong Kong KPMG China

馬紹輝

香港銀行業及資本市場主管合夥人畢馬威中國

常常將文化評估和塑造行為的因素視為一個「打勾」的例行公事，銀行正逐漸擺脫這種情況，並像鐘擺一樣朝著更加積極主動的前進方向邁進，以防止將來此類不當行為的出現。

領導市場的銀行將專注於有前瞻性、實時的指標和文化評估，以加深它們對組織内的日常行為的了解，並更好地理解可能影響這些行為並塑造理想的文化結果的優勢。

金管局在2019年推出了多項措施以促進香港銀行業的可持續發展和綠色金融發展，我們預計金管局在2020年將更加關注可持續發展和與氣候相關的風險。

我們在資產管理行業所看到的發展是投資者日漸要求資產管理經理將「環境、社會及管治」（ESG）納入其投資決策中，並要求他們提供更多與可持續性有關的產品，我們相信這趨勢將擴展到香港的銀行業。我們亦預計沒有積極管理ESG事務

（尤其是與氣候相關的事務）的公司（包括銀行）的資本成本將會增加。

這些領導市場的銀行將開始（如果還沒有開始的話）把ESG納入它們不同服務線的市場策略中。其中可能包括支持「氣候相關財務資訊披露工作組」提出的自願性、與氣候相關的財務風險披露，以向投資者和其他利益相關者提供信息。一些主要的國際銀行已經這樣做了，我們因此相信在

2020年可看到更多的銀行效仿。

數據就是關鍵區別數據是銀行重要的資產，也是銀行業未來的關鍵推動力。數據是每個圍繞競爭、數字化轉型和風險管理的關鍵趨勢的基礎，並將成為2020年銀行之間差異化的關鍵。

長遠來看，我們相信成功的銀行將是擁有全面數據策略，並可以利用其數據來增加收入、增強符合監管的合規性和營運效率的銀行。

儘管面臨著充滿挑戰的時代和持續的利潤壓力，銀行仍需要繼續專注於繼續保持客戶為業務核心。這意味著利用他們的數據來實現個性化和最佳的客戶結果，公平地對待客戶並為其產品，服務和建議提供物有所值，並最終提高客戶體驗的標準。 未能將客戶置於其工作核心的銀行將看到其利潤下降，面臨更大的行為和聲譽風險，並且可能會看到客戶流向其他競爭對手，例如新的虛擬銀行。

In addition, regulators globally – including the HKMA – are increasing their focus on how banks proactively manage conduct risk and shape and promote the right culture within their organisations. It is possible that we could see more conduct-related enforcement cases in Hong Kong in 2020, with culture playing a significant contributing factor to the conduct failures. This will continue to change how banks perceive conduct and culture. While the assessment of culture and the factors shaping conduct have often been viewed as a tick box exercise in the past, banks are moving away from this and the pendulum is swinging towards a more proactive, front-foot approach in order to prevent future cases of misconduct.

Leading banks will focus on forward-looking real-time metrics and cultural assessments to provide them with greater insights into the day-to-day behaviours within their organisation, and to better understand the levers that can influence these behaviours and shape the desired cultural outcomes.

The HKMA is also expected to increase its focus on sustainability and climate-related risks, following the introduction of a number of measures in 2019 to promote sustainable banking and the development of green finance in the city.

The developments we have seen in the asset management industry – investors increasingly demanding that asset managers integrate ESG into

their investment decisions and offer more sustainability-related products – will extend into Hong Kong’s banking sector. We also expect the cost of capital to increase for corporates – including banks – that do not actively manage ESG matters, in particular climate-related matters.

Leading banks will therefore, if they haven’t already, start to incorporate ESG into their strategy across different service lines. Part of this could include opting into the voluntary climate-related financial risk disclosures – developed by the Task Force on Climate-related Financial Disclosures – to provide information to investors and other stakeholders. Some major international banks have already done so, and in 2020 we may see more banks follow suit.

Data the key differentiatorData is a crucial asset for banks and a key driver of the future of banking. Indeed, data underpins each of the key trends discussed around competition, digital transformation and managing risk, and will be a crucial area of differentiation among banks in 2020.

We believe the banks that will be successful in the long run will be the ones that have a comprehensive data strategy and that can leverage their data to increase revenue, and enhance regulatory compliance and operational efficiency.

Despite facing challenging times and continued pressure on margins, banks need to remain focused on continuing to keep

the customer at the heart of their business. This means harnessing their data to achieve personalised and optimal customer outcomes, treating clients fairly and providing value for money for their products, services and advice, and ultimately raising the bar for customer experience. Banks that fail to keep

“We also expect the cost of capital to increase for corporates - including banks - that do not actively manage ESG matters, in particular climate-related matters.”

the customer at the heart of what they do will see their profitability decline, face greater conduct and reputational risk, and may see an outflow of customers to other competitors, such as the new virtual banks.

[1] https://assets.kpmg/content/dam/kpmg/cn/pdf/en/2019/12/hong-kong-banking-outlook-2020.pdf