Hong Kong more open to sharing financial data says new report
SHARING sensitive data with companies is something customers have always been cautious about, but a new report suggests Hongkongers are more open to sharing financial data than their neighbors.
In other words, Hong Kong’s residents seem to be more keen on Open Banking as compared to people in other parts of the world, indicating big opportunities ahead for fintech companies in the country.
Typically, in an Open Banking arrangement, data is shared by financial institutions, upon request by the customer, with authorized third-parties. The exchange ordinarily uses APIs (secure digital feeds).
Those third-parties, typically fintech companies, use that data to accelerate customer on-boarding and augment their overall offering.
Accenture surveyed more than 2,000 consumers in Hong Kong and found that 51 percent of them would be comfortable and willing to share their data with a third-party provider if doing so would get them more-personalized services or tailored offers like a better mortgage rate or higher returns on savings and deposits.
This is, of course, provided companies could assure customers that their data would be kept secure.
In comparison, similar surveys conducted by Accenture in Australia and the UK showed that consumers in those markets were more likely to refuse to share their financial information with third parties (66 percent and 69 percent, respectively said no to sharing data).
When asked what other types of organizations they would trust their data with, 16 percent of Hong Kongers cited retailers and large online merchants and 33 percent cited international and local payments firms, underscoring their openness to non-bank providers.
Consumers in Hong Kong are also very open to using solutions created by third-party providers for payments, with 38 percent of Hongkongers saying they would trust online retailers to initiate a payment, and 26 percent said they would trust large technology companies for payments.
The survey also found that residents of Hong Kong are also getting increasingly comfortable using digital payments and wallet services that are ubiquitous in the Chinese mainland.
The number of Hongkongers who said they use these services at least once each month more than double the number who say they never use them (69 percent vs. 31 percent).
Not surprisingly, younger consumers are more frequent users of digital wallets than older ones, with 80 percent of millennials and Gen Z-ers saying they use them at least monthly, compared with only 47 percent of baby boomers.
Although it is natural for young consumers to be more familiar with Open Banking, and more willing to share their data than older customers, Accenture believes that the generational divide is even more evident when comparing consumers’ attitudes toward payments.
For example, only 30 percent of Gen Z-ers and millennials said they’re not willing to initiate payments through non-bank providers, compared with more than half (55 percent) of baby boomers.
When asked to identify the main hurdles to embracing Open Banking, 71 percent of Hongkongers cited concerns over security and privacy of their financial data.
This was followed by lack of trust in large tech companies and third-party providers to handle financial data (43 percent of consumers), and a lack of sufficient understanding of Open Banking (42 percent).
When talking about Open Banking in the APAC, it’s hard to remain silent about Singapore. According to a recent report by the IDC, Singapore beat Hong Kong and Australia in its readiness for Open Banking.
However, to Accenture’s credit, it’s important to realize that regulatory or institutional readiness doesn’t imply customer readiness.
It’s why Singapore, despite launching its Open Banking initiatives way back in 2016, is still competing with Hong Kong, who published its Open API guidelines for banks in July last year.
In the coming months, as more fintech companies enter Asia and as more banks and financial services companies seek to collaborate with technology providers, it is expected that services provided to individuals will see a significant change for the better.