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Friday, August 03, 2018, 12:08
Walking tall in a technology world
By Oswald Chan
Friday, August 03, 2018, 12:08 By Oswald Chan

Citibank (Hong Kong) is the first locally licensed bank in the city to develop its Open Application Programming Interface platform and share its information with third-party institutions. The bank has developed 37 APIs and attracted nearly 500 third-party organizations to conduct prototypes and concept trial tests. (CHRISTOPHER DILTS / BLOOMBERG)

HONG KONG - In Hong Kong, when applying for a personal loan from a bank, you’ve to visit the branch office, fill up the application form, provide your address and income proof and wait for the result. The process is always cumbersome, time-consuming and, most often, a good customer experience is profoundly lacking.

The growing proliferation of smartphones is the key to digitization and more equal access to financial services in future

Tony Wong Tze-chui, Chief Marketing Officer, Zero Finance

Three investors were resolved to get rid of those hassles, dishing out an eight-digit, Hong Kong-dollar investment to get Zero Finance — with the city’s first automated loan app X Wallet — off the ground in April this year. The company is a licensed money lender and has developed its proprietary machine learning system for loan approvals.

The loan approval process involves three stages — filling in the applicant’s personal information and scanning his or her identity card; scanning the ATM card provided and entering the payee’s bank account number; and answering three security questions from consumer-credit rating agency TransUnion.

The agency will allow its credit reports to be linked with X Wallet’s system in real time. By leveraging on technical analysis and data consolidation of previous users’ credit records, the machine learning system is able to approve or throw out a loan application in an average of 15 seconds.

Once the loan is approved, the amount sought is transferred to the borrower’s bank accounts within 20 minutes. Borrowers can choose to make their repayments at any 7-11 convenience store without having to pay an early repayment fee or inactive fee. X Wallet’s current minimum loan amount is HK$1,000 and the maximum is HK$15,000. The startup will gauge market demand to determine whether the loan amount could be increased.

Since its launch, the app has registered 1,300 downloads. The company aims to have up to 10,000 downloads by the end of next year, with 90 percent of those who download the app expected to be its customers. At present, Zero Finance has some 1,000 clients.

“Using technology can help achieve inclusive finance in Hong Kong, creating equal opportunities for accessing financial services in an affordable, convenient and sustainable manner,” Zero Finance Chief Marketing Officer Tony Wong Tze-chui told China Daily.

“The growing proliferation of smartphones is the key to digitization and more equal access to financial services in future,” he said.

In May, the Hong Kong Monetary Authority — the city’s de facto central bank — issued guidelines waiving the necessity for some local banks to adhere to traditional lending practices, such as requiring borrowers’ income proof. Lenders may adopt innovative technology, such as big data and consumer behavioral analytics, to approve and manage related credit risks. This “Banking Made Easy” initiative is aimed at promoting smart banking in the city.

“The new guidelines will enable banks to be more innovative and adopt more financial technology in the personal lending business so as to improve digital customer experience, and this is a major development in banking supervision,” said HKMA Deputy Chief Executive Arthur Yuen Kwok-hang.

Apart from “Banking Made Easy”, Open Application Programming Interface (API) is another key step taken by the HKMA to spur smart banking in Hong Kong since September last year.

Open API

An open API allows banks’ internal data and system to be accessed by third parties so that product comparison and consolidated account information kept in several banks may be available to customers through third-party apps or websites.

The HKMA also said last month it would implement Open API for data sharing in phases, based on the level of risks and data sensitivity.

By January next year, banks and third-party service providers will exchange product information through the Open API. Between August and November next year, both parties will exchange information regarding customer acquisition. The delivery time for shared information relating to account information and transactions, such as payments and transfers, will depend on the market’s response.

Citibank (Hong Kong) is the first locally licensed bank in the city to develop its Open API platform and share its information with third-party institutions. By developing the “Citi API Developer Portal”, the bank has developed 37 APIs to date, covering seven categories for app developers and consumer brands to build innovative services. Nearly 500 third-party organizations have registered with Citibank (Hong Kong)’s Open API platform to conduct a variety of prototypes and concept trial tests.

From last month, Citibank cardholders can offset online purchases with their reward points instantly after checkout when shopping at the online stores of EGL Tours, electrical appliance retailer Fortress and pharmaceutical store Watsons. 

In May, Citibank (Hong Kong) rolled out several new open API partnership initiatives in these banking services — offsetting Citibank credit-card holders’ reward points with online purchases at HKTVmall; helping customers to apply and activate the Citi Octopus Credit Card on one platform; and simplifying the application procedure when customers purchase certain products from Zurich Insurance (Hong Kong).   

In addition, Citibank customers can enjoy a simplified procedure of conducting financial need analysis at its branches when purchasing insurance products from AIA International. During trips overseas, customers can leverage the Citi Visa Fetch app to obtain seamless services, such as instant language translation, foreign currency conversion, and price comparison between various online platforms.

Hong Kong insurers AIA and Prudential are seeking to create better customer experiences with their online platforms, which make it possible for customers to buy insurance policies or submit claims in three minutes. (BILLY H.C. KWOK / BLOOMBERG)

Citibank, at this stage, focuses on Open API in areas like card application and activation, as well as reward point redemption. Other service areas like chatbox, account transaction, account security and third-party verification will be implemented later.

Except for the HKTVmall and EGL Tours services, the other four initiatives will be introduced in different phases this year.

“We welcome other banks in Hong Kong in adopting more Open API technology to enrich the financial technology’s ecosystem in Hong Kong,” said Angel Ng Yin-yee, Citi country officer for Hong Kong and Macao.

“We’ll also cooperate with more third-party service providers to enhance the range of services on offer,” she said.

“The cooperation between the HKMA, banks and technology companies will be sustained in the hope that the market can be further developed through building up ecosystems and strengthening the network connectivity effect,” said HKMA Deputy Chief Executive Howard Lee Tat-chi.

Besides applying for personal loans, customers can also trade securities, buy insurance policies or make insurance claims on their mobile phones.

Hong Kong-based CASH Financial Services Group invested HK$200 million in May to launch the city’s first mobile share trading app using cloud-based technology infrastructure. Its clients can download the app for free to trade in Hong Kong securities.

Utilizing US-based National Aeronautics and Space Administration’s licensed technology, “Alpha i” builds on artificial intelligence, deep learning and big data analytics to help investors make investment decisions by detecting price increases and falling trends with higher accuracy.

On the cloud

The mobile app also links up with various cloud services, such as Alibaba Cloud, Amazon Web Services, Google Cloud Platform and Microsoft Azure, to allow clients using Alpha i to execute trades within 0.8 milliseconds, thus enabling investing anytime and anywhere. In addition, trading parameters have been pre-set for users to place their orders speedily so that they can manage their accounts and trades single-handedly.

The mobile trading app is also equipped with a two-factor authentication security check to ensure safety for clients when using the app for securities trading.

The financial services group expects the mobile trading app to be extended to other investment markets and asset classes, such as US securities, mainland A-shares and other derivative products. At this juncture, the mobile trading app only provides technical trading information, while fundamental company and market information will be offered at a later stage.

“AIA iShop” — the online insurance purchase platform launched by insurer AIA Hong Kong — enables customers to buy insurance policies as fast as three minutes with just three steps. Currently, nine insurance products covering life protection, medical protection, accident protection, as well as savings and general insurance categories, are sold through this platform.

Before making purchases, the app powers an instant quotation system that allows customers to obtain a price quotation immediately to help evaluate products’ suitability. The live chat function enabled by the app can instantly answer customers’ questions during the application process.

When customers decide to buy, they do not need to fill up personal particulars as some of them have been pre-filled for existing customers when logging into shortened application time. A confirmation email will be sent immediately after the application process is completed, and a secure payment channel will be offered to customers when making payments.

Prudential Hong Kong recently launched its online portal “Hospital to Prudential” and “Chatbot Claims” that can significantly slash the claim submission time to three minutes, or by 75 percent, compared with paper-based submissions. “Chatbot Claims” will support 90 percent of the insurer’s medical protection products and help financial consultants process claims of any amount.

“Technology will have to be used endlessly flexible whereas, literally, you can change at the click of a button. Robotics, artificial intelligence and machine learning are exerting an ever greater impact on insurance technology. I think technologies would be used to drastically alter the face of insurance business,” Equinix’s global head of insurance James Maudslay told China Daily.

“Financial services institutions in Hong Kong are more willing to use technologies as they are in greater need of boosting customer services. They are constantly gauging changes in consumer behaviors and life patterns, which are poised to change at an even faster pace in future,” said Terick Chiu, vice-president and executive partner at Gartner — a research firm tracking global technology investments.

According to Ieong Mei-kei, chief technology officer of the Hong Kong Applied Science and Technology Research Institute (ASTRI), two insurance startups are working with insurance companies to speed up the medical insurance claim process by leveraging blockchain technology.

ASTRI is also working with HSBC, Bank of China (Hong Kong) and ICBC (Asia) to apply blockchain technology in the streamlined property valuation process to save costs.

The institute is developing the artificial technology to speed up the verification process for signatures on business forms. Some enterprises have already embraced such technology, while the government has yet to make up its mind on whether or not to adopt it.

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