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 Like peers around the world, banks operating in Hong Kong including
Bank of China Ltd <601988.SS> <3988.HK> and Citigroup Inc <C.N> are
trying to improve their online banking products to lure tech-savvy
students and young professionals as they are about to open their
first bank account.
For HSBC the battle to win the hearts of young Hong Kongers is
particularly important as retail banking activity in the Asian
financial center helped drive its overall profit up 2 percent in the
first half of this year.
The London-based bank, which has put China at the center of its
global strategy, is also in the process of deciding whether to move
its global headquarters to Hong Kong. <0005.HK>
A survey of 2,500 people conducted in November by specialized
research firm RFI, gave Bank of China a bigger market share among
bank customers aged 18-24 than HSBC, which dominates in all other
categories.
These customers loathe spending time at bank branches and seek a
lender that can allow them to carry out multiple transactions from
their smartphone.
"I would rate both the online and mobile services offered by Bank of
China as good as they allow me to pay my parking tickets instantly,
and this is very important to me," said Chun Hoi Lau, a 23-year-old
student at the University of Hong Kong.
Bank of China, which says the young generation is a key customer
segment, allows clients to carry out cross-border payments through
an app, uses the popular WeChat social media platform to handle
customers' queries and has introduced a popular virtual securities
investment contest for students.
"We have been developing a comprehensive strategy with a set of
products and services delivered through their preferred channels to
suit their life styles," the bank told Reuters.
BANK FOR LIFE
The jury however is still out on which lender is making effective
inroads among the young, a segment targeted because people often
stick with a bank for life once they have made their choice,
analysts said.
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In a detailed survey commissioned by HSBC, and conducted by Nielsen
last year, the bank said its market share of 18-24 year olds was
nearly double that of Bank of China. It said it was aware of the
increasing need to offer more online services.
"We are investing heavily in developing new capabilities to meet
customers' needs," said Kevin Martin, HSBC's head of retail banking
and wealth management, Asia Pacific.
HSBC will next year launch more products for smartphones and digital
payments as well as new security features, Martin added.
Citibank is also appealing to younger customers with 19 "smart"
branches in Hong Kong that boast the sleek lines of Apple Inc's
retail stores, touch panels, video conferencing facilities and iPads
to access a wide range of banking services.
Hong Kong spokesman James Griffiths said Citibank was also offering
customers discounted fees on stock and forex trading via digital
platforms to encourage more transactions.
The question now for HSBC's challengers is whether they can convert
young people lured by attractive rates or flashy online offerings
into lifelong customers.
"HSBC isn't that popular among young people," said John Pang, a
24-year-old civil servant who banks with the lender. "It hasn't
changed a lot in the past 5-10 years, the online interface still
looks the same."
(Editing by Lisa Jucca and Miral Fahmy)
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