RFi Group - Hong Kong Commercial Banking Council

Hong Kong CommercialBanking CouncilH1 2019 Market Report

Presented by: RFi GroupAnalyst: Divij Gaur, Senior Research Analyst

For questions and enquiries, please contact:Andrew Kim, Client Services Director – Asia, [email protected]

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Financial Councils – Global

Priority & Retail Banking Council

Payments & Innovation Council

Merchant Acquiring Council

Digital Banking Council

Commercial BankingCouncil

SME Banking Council

Youth Banking Open Banking/ PSD2 Council

Commercial Payments

B2B Payments Remittance


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• Research Methodology

• Market report

• Firmographics• Market overview• Business Sentiment• Business Banking Relationships• Future banking• Relationship management• Channels

Agenda

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• The data in this report is sourced from the H1 2019 Hong Kong Commercial Banking Council survey. The survey was in

field from April to May and 2019.

• In total 364 businesses were interviewed online.

• Basic quotas were applied to ensure that respondents are representative of the Hong Kong business population by

industry and revenue. To qualify as a commercial banking client, company must have a global annual revenue

between U.S $10 million and U.S $500 million.

• In terms of reporting,

• All currency related questions are in US$ unless otherwise stated

• For single response questions, totals may not add to 100% due to rounding. Multi-response question totals do

not add to 100% as respondents can choose more than one response

• NPS is calculated by subtracting the proportion of customers who said the likelihood of recommending the

institution was a rank of between 0-6, from the proportion of customers who said the likelihood was between 9-

10 where 0 is ‘not at all likely’ and 10 is ‘extremely likely’

• Slides marked with an institution’s logo in the title are proprietary to the institution.

• Further data cuts are available on request.

Methodology

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• The H1 2019 Hong Kong Commercial Banking Council survey is only asked to respondents who have direct knowledge

of their companies’ financials and are of the following positions.

• Owner/ Operator

• Director

• Chief Executive Officer (CEO)

• Chief Financial Officer (CFO)

• Partner

• Logic checks in the online questionnaire ensure that responses are coherent. Respondents are otherwise terminated

from the survey.

• Fieldwork for the survey is divided into two phases, the soft launch and the full launch. Data check is performed twice,

one after soft launch and the other after full launch.

• Additional checks are performed to remove straight-liners and duplicates.

Quality Assurance

• Finance Manager

• Managing Partner

• Not for profit Office Bearer

• Managing Director/ General Manager

• Financial Director

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▪ NPS is a measure of recommendation amongst Existing Clients

▪ It correlates well with Intent to buy more amongst Existing Clients

▪ However, smaller brands even with high NPS can have a smaller absolute number of promoters, compared to a larger brand with lower NPS

▪ The introduction of a new product or an exciting scheme in the market by one brand has the potential of disrupting the market. The incumbents NPS may remain high but their sales may not speak the same language in the face of the new product.

▪ Some brands can over-service existing customers thus getting high NPS, at a cost, and focus less on acquisition. NPS surveys can tell us potential acquisition triggers.

▪ There is cultural bias in scoring so we must look at scores trended within each market and Vs competition in each market (not across markets). Markets like India, Indonesia and UAE generally give higher scores, whereas Hong Kong, Korea, Singapore and Taiwan give lower scores.

Net Promoter Score

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Market Report• Firmographics

• Market overview

• Business Sentiment

• Future banking

• Business products

• Relationship management

• Channels

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Preview Slides

• Primary Bank: Recommendation

• Main Domestic/ International Bank: Switching Drivers

• Future Product Take-Up

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Primary Bank: Recommendation

How likely are you to recommend your bank?NPS (-100 to 100)

By primary bank, Trended

17% 24% 25% 26% 19% 21% 23% 28% 21% 26% 22%35%

25% 29%

26%38%

25% 24% 27%16%

27% 21% 22% 18% 9% 6%22% 19%

FY 2018 H1 2019 FY 2018 H1 2019 FY 2018 H1 2019 FY 2018 H1 2019 FY 2018 H1 2019 FY 2018 H1 2019* FY 2018 H1 2019

Hang Seng Bank BOC Citibank SCB HSBC DBS* Total

Difficult (0-6) Neutral (7-8) Easy (9-10)

Base: Primary bank relationships (FY18: BOC: n=184, Citibank: n=85, DBS: n=48, Hang Seng Bank: n=96, HSBC: n=359, SCB: n=67, Total: n=990; H1 2019: BOC: n=76, Citibank: n=38, DBS*: n=17, Hang Seng Bank: n=50, HSBC: n=176, SCB: n=39, Total : n=510)*Sample size is small (n<30); use results indicatively

9 140

-3

8

-5

4

-8

1

-8 -13-29

-3 -10

NPS Scores [100 × (%(9-10) - %(0-6))]

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Main Domestic/ International Bank: Switching

Base 1: Primary bank relationships (H1 2019: n=510)Base 2: Companies who are considering switching their main domestic/ international bank (H1 2019: n=146)Base 3: Companies who are considering switching their main domestic/ international bank excluding respondents who selected “I don’t know” (H1 2019: n=126)

12%

10%

8%

8%

8%

7%

6%

6%

3%

3%

Citibank

BEA

BOC

DBS

SCB

CCB

Hang Seng Bank

HSBC

Chong Hing Bank

OCBC Wing Hang Bank

Where are you planning to switch? – Top 10 Why is your business looking to switch the main domestic/ international business bank?

Top 10 drivers

18% 11%

How likely is your business to switch its main domestic/ international business bank?

Very unlikely (0-2) Unlikely (3-4) Neutral (5) Likely (6-7) Very likely (8-10)

Potential switchers

Better online banking 21%

Better branch access 19%

Better pricing and fees 18%

Flexibility to suit the business' banking needs 18%

A greater international presence 16%

A larger credit facility 16%

Improved product/ service offering 15%

Better telephone banking 15%

Better operational processing quality, efficiency and reliability

15%

Better mobile banking 14%

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Future Product Take-Up

84%

53%

37%

30%

29%

16%

11%

0% 20% 40% 60% 80% 100%

Cash services

Trade-related products

Borrowing products

Cards

Foreign exchange products

Insurance products

Investment/Wealth products

What business banking products does the

business intend to take up in the next 12

months?

68%83%

<$50M >$50M

% who are planning to take up new products

By annual turnover

Base 1: All companies (H1 2019: <$50m: n=234, >$50m: n=130, Total: n=364)Base 2: Businesses who intend to take up new banking products in the next 12 months (H1 2019: n=268)

Yes

74%

No

26%

Do you intend to take up new banking products in the

next 12 months?

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Intelligence to bank on

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RFi Group - Hong Kong Commercial Banking Council