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Some currency symbols floating on the phone; image used for HSBC Malaysia Liquid Banking Of The Future article

Banking Of The Future

Digital innovations are driving the future of banking. At HSBC, we are taking the lead in investing in digital capabilities & innovations in Malaysia and globally to build a smarter nation and world.

9 in every ten people in developed countries/regions own at least one smartphone or smart device.1

78% of the Malaysian population were active social media users from 2016-2019.2

The digitisation of our lives as a result of rapid advancements in technology is inevitable. Whether it is getting from "a" to "b", how we stay in touch with our friends and family, do our shopping or consume entertainment, companies are harnessing the power of technology and data to personalise the products and services they offer to us.

Digitisation is also driving change in banking and financial services.1 We are used to technology making our lives easier, and now expect the same level of simplicity and intuitive interaction from banks – like how we experience and benefit from technology in other areas of our lives.1 So it's no surprise that more of us are increasingly going online or using our smart phones to manage our financial lives and interact with our banks.1

At HSBC, we have seen this change in consumer expectation and behaviour, and as an organisation we are conscious that we need to be at the forefront of this digital shift. Eighty-seven percent of HSBC's global retail banking transactions are now digital.1 We are investing heavily in technology across HSBC to meet customers' expectations, manage risks even more effectively, and at the same time make our business more efficient.1 In the first half of 2019, we made a global investment of US$2.2 billion, up 17% compared with the same period in 2018, on near- and medium-term initiatives to grow the business and enhance digital capabilities.1

87% of HSBC's global retail banking transactions are now digital.1

As we push ahead and ramp up our digitisation efforts, we are conscious of the fact that the successful bank of the future will need to carefully balance a series of trade-offs between what technology and data enable, in terms of improving customer experiences, with the absolutely fundamental need to ensure the highest customer standards are upheld and the integrity of the financial system is maintained.

We are excited about our transformation into a bank of the future and here are some of the things you can expect...

Better experiences

Digitisation has changed how we interact with money and financial institutions. To answer this change, many banks have set a future agenda that includes plans to develop mobile and digital communication channels beyond straight-forward transactions, finding new ways to engage consumers through personalised nudges and notifications based on dynamic data sources.1 These are usually combined with human support for more complex interactions to enhance problem-solving and increase understanding.1

As future banks move to more service-based models, they will likely focus investments on experiences rather than products.1 Indeed, the emergence of the app economy and the aggregation of services and data requires a fundamental rethink of the way money and information is being communicated and experienced by consumers.1

But winning the experience game alone may not be the decisive factor.1 Rather, it is the bringing together of the power of transactional data and purchase histories with payment, locational, credit and social network information, which has huge potential.1

Cashless societies, almost

Cash and credit cards will not disappear completely over the next decade.1 While the demand for digital and increasingly frictionless experiences will see a move towards more "cashless societies", physical money will still have a role to play – albeit a significantly reduced one.1

Newer digital payment journeys still need to be tested, improved, adopted, and – more importantly – trusted by consumers before they feel comfortable abandoning their cards and cash.1 Banks like HSBC can certainly play a leading role in this transition, as retail payments processes and IT architectures are re-engineered to fill gaps in the new open banking environment.1

The variation of payment technologies and relevant innovations, and their penetration in markets across different regions also need to be taken into consideration.1 For example, the acceleration of digital transformation of businesses is faster in developing economies than in the west.1 In China, the value of mobile payments is already close to US$28 trillion per year.1 At the same time, payment via facial recognition technology is starting to take hold and is expected to spread rapidly in the next year.1 Around 1,000 convenience stores have already installed the system and more than 100 million Chinese users have registered to use the technology.1

Security and the digital ID

In the wake of the surge of stories about data breaches and mishandling in the technology sector, a survey by Boston Consulting Group and Capgemini asked respondents what kind of company they trusted most to manage their data: more than 80% said banks and less than 5% said consumer tech companies.1

Banks are trusted with customers' identification and reference data (ie customer IDs, proof of address, etc.) and so will be seen as a reliable safeguard of customers' identity when they transact online.1 This is a real strategic advantage, and to capitalise on it, banks will build on their existing infrastructure to capitalise on new authentication protocols and communication standards to interface with external marketplaces or platforms.1

Banking innovation: Tackling financial crime

In 2018, HSBC became the first bank to deploy AI and machine learning in the fight against financial crime.1 The AI solution has doubled the speed and accuracy of screening for sanctions and money-laundering in cross-border payments.1 The bank has also just launched a machine learning solution called Cog-I for transaction monitoring.1 Each month it screens over 650 million transactions, across 200 million accounts.1

The convergence of identity and money has accelerated with the extensive influence of social media and mobile phones leading us to rethink the concept in the digital age.1 Managing people's privacy and confirming their identity online will continue to be a crucial stronghold for banks like HSBC in the battle for data.1 This will give choice to consumers when you want to share some of your credentials but remain anonymous to certain non-financial providers or networks.1

Meanwhile, over the next 10 years, consumers will take much greater personal ownership over their data and who you want to open it up to.1 This will evolve towards the formation of digital IDs, secured and accessed by advanced biometrics technology, which individuals will use to open and close relationships with providers underpinning your entire financial lives.1 These IDs will not just contain financial information and history, but also build an individual profile of social patterns and preferences encompassing your entire digital footprint.1 Robust identity is critical to risk management and these digital IDs will enhance banks' ability to limit bad actors' access to the financial system, without significant impact on customer experience.1

In the future, banks will be at the centre of a more open and connected e-commerce system – able to integrate and partner with organisations outside of financial services and become the gateway to this activity.1 Take utilities for example. Imagine you moved to a new home. HSBC would automatically get in-touch and offer to set up all your utilities for you – finding suitable providers or eco-friendly ones if that is more important to you – based on your digital ID profile.1

Relationship of trust

In the age of digital banking, trust will be an absolute crucial factor in the new partnership between you and your financial provider, as banks become the bastions of their customers' digital identities – helping them to maintain, nurture and grow them over time.1

Customers would only be willing to share their data when the benefits of doing so are clear and there is transparency around how it is being used.1 As such, banks will need to focus heavily on building this trust exchange with their customers.1 At HSBC, we embrace the fact that banks of the future will need to intensify their efforts in order to compete in this fast-changing global economy and redefine their role in the future financial services industry.1

As customers, these digital innovations will herald a newer, better way of banking and managing your finances as well as enhance your quality of life. It will also empower you with the ability to perform all your banking activities online and via your mobile device no matter where you are or what time of the day it is.

Digital innovations at HSBC

Here in Malaysia, we have already introduced some key digital innovations to enhance your banking experience with us while others are coming soon. So stay tuned...

Online personal loan applications

Available now, you can apply for personal financing by logging into your online banking. It's a quick and simple process that will take just a few minutes. You can even get an approval in-principle in just one minute.

Fast, simple log-ons with biometrics

You can now authenticate your identity and access the new HSBC Malaysia Mobile Banking App in mere seconds using FaceID or with fingerprint authentication with iOS Touch ID and Android Fingerprint ID. No hassles of remembering passwords but just as secure.

Enhanced digital customer service

Live Connect is a video chat application that will allow our staff to connect and talk to existing Premier customers using the HSBC Live Connect app available on Google Play and Apple App Store.  Live Connect allow us to provide you with individualised customer support by letting you have face-to-face conversations with your Relationship Manager or our staff remotely. Live Connect will also allow your Relationship Manager to invite additional participants such as our investment specialists to join the conversation.

Meanwhile, our new Live Sign digital service allows for the creation of e-signature workflows that allow the sending, signing and tracking of signature processes online via the computer or a mobile device. As a customer, you will be able to view and check documents sent to you via Live Sign and digitally sign it before sending it back to the bank. There's no hassle of having to travel to the bank just to sign a document and sending physical copies by mail or courier.

Live Sign Live Connect is currently available to our customers covering Structured Investments, Unit Trust and Personal Loans from five pilot branches, namely Bukit Bintang, Damansara Heights, Kuala Lumpur, Petaling Jaya and Subang Jaya.

Voice ID

Imagine in the near future: no more having to remember your PIN or Telebanking PIN each time you call the bank for phone banking. It could be a reality here at HSBC with VoiceID – our new innovation that lets you use your voice to authenticate yourself when you call HSBC. When VoiceID is implemented in Malaysia, it will make banking over the phone more efficient and secure by analysing your voice in seconds – checking over 100 behavioural and physical vocal traits, from your pronunciation to the tone and pattern of your voice – which fraudsters and hackers can't replicate.

To learn more about how our digital innovations can help your banking experience with HSBC, speak to your Relationship Manager.

Banking Innovation: Better online banking

While online banking may not be new, HSBC has made major steps in enhancing our online and mobile banking platforms to make banking for our customers easier and more seamless no matter where they are in the world. Through online banking and the HSBC Malaysia Mobile Banking app, you can now securely manage all your accounts and carry out your everyday transactions at your convenience. Simple, fast and secure, online and mobile banking lets you view account balances, make easy fund transfers with Move Money, pay utilities with JomPAY, send money instantly with DuitNow, access eStatements and more on-demand. The HSBC Malaysia Mobile Banking App can be downloaded via the Apple App Store and Google Play.

Download the HSBC Malaysia Mobile Banking App* now!

Not an HSBC Conventional Online Banking* and HSBC Malaysia Mobile Banking App* user? Scan the QR code to register.

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*HSBC Bank Terms & Conditions for Online and Mobile Banking (Dec 2019 Edition) and HSBC Terms of Use apply. More information at www.hsbc.com.my

Sources:

1. HSBC, Banking of the future: Finance in the digital age, undated.

2. Asian Banking & Finance, How banks in Malaysia are keeping up with the digital shift, 12 August 2019.