Hong Kong Retail Banking - Competitor Benchmarking 2021
Despite the impact of COVID-19, banks in Hong Kong remain well capitalized and ready to support recovery going forward. All incumbents increased their total divisional assets (TDA) in 2020. Although the threat of a long-term low-rate environment persists, profitability is unlikely to be affected as banks focus on controlling costs and non-interest income. As net interest margins across the banking sector compress due to the need for ultra-low interest rates, the importance of non-price factors has become significantly more important in the banking space.
This report - which is part of a series of Hong Kong content including market analysis and consumer profiles - looks at market performance, retention risk, and current account market share. It ranks Hong Kong’s top banks across a range of criteria, from digital adoption and user experience to rewards and money management tools.
Reasons to Buy
- Use of digital channels peaked in 2020. However, reversion to pre-pandemic habits appears to be underway. Standard Chartered, HSBC, Hang Seng Bank, and Bank of China are all experiencing greater branch usage in 2021 than in 2020.
- 38% of Citibank customers have joined within the last five years, suggesting its customer acquisition efforts have been successful.
- HSBC leads the way in terms of cross-selling, with 20% of its customers holding three products with the bank. Challengers ZA Bank and Mox Bank struggle in this regard due to a lack of services.
- Discover which banks in Hong Kong are performing best.
- Learn which banks are under threat and are perceived as behind the curve by customers.
- Understand the Hong Kong retail banking landscape and how it may develop based on key performance indicators.
- Executive summary
- Financial Performance, Market Share, and Cross-Selling
- Hong Kong's incumbents were prepared for the impact of the COVID-19 pandemic following the implementation of new stress tests post-2008
- Incumbents perform strongly in the residential mortgage market, but results for retail deposits and consumer credit suggest digital challengers are making gains
- HSBC accounts for 32% of the current account market in Hong Kong, while Citibank is under threat from ZA Bank and Mox Bank despite their lack of track record
- ZA Bank and Mox Bank struggle with cross-selling, in part due to a lack of services As margins across the banking
- Channel Visitation Trends and Digital Adoption
- Digital channel usage was accelerated by COVID-19, but consumer behavior is showing signs of reversion
- Customers show a strong preference for alternative providers in Hong Kong
- In Hong Kong, an average of 86% of customers have used mobile wallets in the last 12 months
- Customer Satisfaction
- Citibank and ZA Bank customers are promoters, while all other providers have negative NPS results
- Customers in Hong Kong care most about efficient problem resolution, followed by easy digital banking
- Standard Chartered and Citibank have the highest customer satisfaction in terms of their ability to help customers resolve problems Given the investment in digital
- Despite being digital-only banks, ZA Bank and Mox Bank score poorly in terms of digital banking satisfaction
- Due to the high levels of competition in Hong Kong, the need to compete via non-price factors such as easy-to-understand products has become critical
- An emphasis on branch closures and shifting to digital forms of customer interaction have impacted perceptions around helpful staff
- Satisfaction with money management tools is broadly high among Hong Kong consumers
- Hong Kong's banks are struggling in terms of satisfaction with loyalty rewards
- Satisfaction regarding customization is low across the majority of providers, suggesting improvements are needed in this area
- Despite cost-cutting efficiencies and a reduced cost to serve, net satisfaction is low in terms of competitive prices
- Incumbents in Hong Kong have a strong omnichannel presence that the majority of customers appear to find accessible and useful
- Sample size
- Further reading