Hong Kong banks should build across Greater Bay Area to succeed in digital age, says Cognizant’s Banking Head in Hong Kong

Consumers around the world are adapting to digital banking at different paces. Take China, for example, which has emerged as one of the world’s leaders in both innovation and investment in digital technologies.

Chinese fintech firms are now making a name for themselves locally and globally because many mainland consumers are bypassing traditional offline banking systems (which first emerged in more mature banking markets) and going straight to digital platforms.

“Digital behavior is very advanced in China,” says Thomas Tam, who heads Cognizant’s Banking and Financial Services business in Hong Kong. “Chinese consumers tend to use digital platforms to interact with their bank, rather than physically going into a branch. Everything they do is through an app. From retail shopping payments, to ordering food and booking rides – every transaction is now a digital process,” he adds.

Cognizant, one of the world’s leading technology services companies, is supporting established Hong Kong banks as they expand into China and cater to a more digital-savvy consumer market. “In China, banks cannot replicate the same business model of running branches as they do in Hong Kong, because there are too many differences in their operating structures,” says Tam. “Today, there are many opportunities for Cognizant to help banks rethink their digital strategy for the Chinese market – what they want to do, and how they want to do it.”

Digital Agility

Cognizant works to help businesses, including many banks, stay competitive by accelerating their shift to digital business models, keeping on top of era-defining innovations and sustaining growth in the face of continuous technology change.

By understanding the existing market positions and objectives of the businesses it serves, Cognizant is able to design and implement transformation models to help them become modern, data-enabled and data-driven enterprises in the digital era and unlock new value in markets by leveraging technologies such as artificial intelligence (AI), analytics, digital engineering, cloud and Internet of Things (IoT).

Cognizant, which has offices and operations in more than 79 cities in 37 countries around the world., is a leading digital partner. “Our local knowledge combined with our global experience enables us to provide well-rounded solutions to our clients,” says Tam, whose team works directly with clients in the city on their digital transformation projects. “Our associates are amongst the best in their field, and are responsible for all of our delivery services.”

While Hong Kong has long been one of the world’s top three financial hubs, Tam says the structures of many banks in the city need to modernize further. “We have seen a surge in demand for banks to transform their applications, moving from mainframe into a more agile environment, to cope with volatile changes in the marketplace,” he says.

For example, a lot of digital transformation work involves automating a number of banking processes. Robotic process automation (RPA) tools are “gaining favor” in the banking sector as they help customers increase efficiency, and speed up customer onboarding and time to market, adds Tam.

Open for Business

The introduction of ‘open banking’ via open application programming interfaces (APIs) – creates opportunities to operate a host of innovative financial service offerings, beyond running simple banking businesses like savings accounts, lending, and app-based transfers.

Open banking is the practice of sharing user information outside of financial institutions, such as with third-party apps. “APIs can integrate the bank into a platform that provides seamless integration with other providers,” says Tam. “From the bank’s perspective, it opens new channels for more customers to engage with banking services.”

Tam provides the example of a travel website that has seamlessly integrated with banks via open API into its online booking system, allowing its customers to take out a mini loan to cover the costs of their trip and pay for it via instalments. Behind the scenes, the customer is actually receiving financial services from the bank, via the third-party travel website.

“Customers often experience the benefits of open API without even realizing it,” says Tam. “We help banks do this by going beyond simply being a service provider. We build an eco-system that encourages different businesses to work together and create more opportunities to offer more value.”

A Greater Plan

With over 190 authorized banking institutions operating in the small city-state of Hong Kong, there is a huge impact on banks’ margins. Banks in Hong Kong need to look beyond their city and explore opportunities across the Greater Bay Area, he says.

China’s Greater Bay Area (GBA) plan aims to transform Hong Kong, Macau and nine mainland cities in Guangdong into a new Silicon Valley-esque technology and innovation hub. One of the economic goals of the region is to expand the financial services industry, which is currently concentrated within Hong Kong – a city with a population of about 8 million. By contrast, there are around 70 million people in the Greater Bay Area as a whole.

However, for the planned expansion of financial services to happen, there needs to be better integration between Guangdong and Hong Kong/Macau.

“Certainly, there will be challenges such as new regulations and competitors that may have a better understanding of Chinese markets, but the maturity and legacy of Hong Kong banking organizations presents a huge opportunity for businesses to get into the GBA marketplace,” says Tam. “As long as banks maintain an open mind – including the use Open APIs – and actively participate in such eco-systems, there are endless opportunities to interact and innovate across the GBA,” he adds.

Being Cognizant

The mobile banking landscape in Hong Kong and China is rapidly changing and Cognizant will be helping consumers interact with banking services on their devices and to expand into GBA. Beyond that, Cognizant is committed to supporting changing work-life patterns within the financial and tech sectors. The company seeks like-minded people to join the team of experts.

Tam is enthusiastic about the career opportunities at Cognizant in Hong Kong and says the company’s culture reflects its inclusive and agile working practices.

“At Cognizant, we are responsible for managing our work and personal time,” says Tam.

His colleague, Kitty Lau, Client Services Manager at Cognizant, echoes this sense of freedom. Kitty joined Cognizant two and a half years ago. “At Cognizant, we are encouraged to work creatively to propose solutions to our clients,” she says. “We can work within different commercial models and present to clients by adapting to the latest market trends. We are the business driver and we help the client to drive their business.”

Since joining, she immersed herself to learn more about digital transformation for her clients. The hard work paid off and she secured a key deal with a China-based client. “It was not easy to secure a deal like this, but through hard work I made this deal. It felt amazing.”

“I'm self-motivated, and coupled with the support from the bosses and the team spirit across the company, all of us are encouraged to work harder to make life easier for everyone.”

Tam agrees, “People here at Cognizant have a winning mindset. We don’t just win business, we earn and win the trust of our customers. Everyone in Cognizant shares this attitude. It’s great.”

From the way we work today, to the way we will work tomorrow, the digital and societal transformation in Hong Kong is certainly an exciting development to follow. Join Cognizant and your expertise will inspire the same infectious confidence for changes in the market. In these uncertain times, having confidence in your skills and surrounding yourself with like-minded experts is a winning approach worth looking into.