Standard Chartered aims to boost its market share amongst next-generation users with the launch of its digital bank.
The bank has three times more market share amongst older clients than those in their twenties and thirties, according to a report citing Standard Chartered chief executive Bill Winters, who hopes that its upcoming digital lending business will help change the mix.
Our virtual bank can help expand our market share of the younger generation, Winters said. We are very focused on developing digital services. The launch of our Hong Kong virtual bank will be a key strategy for our business.
Digital rivals entering the market and are attempting to initially lure clients with attractive pricing on deposit rates. For example, ZA Bank – the first virtual lender to launch – made its entrance in grand fashion with a 6.8 percent three-month deposit offering, significantly higher than the 2-3 percent offered by traditional competitors. Hong Kong’s central bank said last week that the remaining seven virtual banks are earmarked to launch this year.
We will offer an attractive package which is not purely based on pricing but also exceptional convenient services for customers,» Winters explained. «Our team has been testing some good, innovative products with a small group of customers.
Standard Chartered will enter the market with considerable experience managing an online-only banking business having launched eight such outfits over the last 18 months in Africa. Its inaugural digital lending entrance occurred in Ivory Coast in mid-2018 where it attracted 18,000 new accounts in the first year. Within the region, the bank has also launched in Uganda, Tanzania, Kenya, Ghana, Botswana, Zambia and Zimbabwe.
Whilst Africa has undoubtedly very different characteristics when compared to Hong Kong due to the latter market’s high population of unbanked individuals, the technological benefits gained from digitally acquiring clients was self-evident.
The number of new customers we have in Africa over the past 12 months is more than what we had in the prior 12 years, Winters explained.
Although Standard Chartered is undergoing major transformational changes to both its business model and infrastructure, Winters underlines that components of the old regime will remain such as the bank’s branch network.
Brick-and-click is a good business model, he said. Our branch network gives confidence to people as they continue to serve customers who never want to pick up a mobile phone app to do their banking.
Hong Kong too is facing changes after experiencing unprecedented political unrest that has threatened the city’s status as a global financial hub. But this is another area Winters sees no need to rewrite the strategy for.
We will not change our view on Hong Kong, which remains our regional hub, acting as a gateway to mainland China, he said. These have been very difficult times during the past six months. But I am confident in Hong Kong, whose fundamentals are still resilient. Hong Kong’s capital markets – including IPOs, equities trading and debts, remain very active. It remains a regional financial hub.
