Hong Kong Bank Opens First Digital Branch

Mary Ellen Power, November 21, 2013
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The North American banking industry has been conceptualizing the branch of the future for some time, however with consumers now used to and demanding the ability to do business online or via a smartphone, one international financial institution has taken a seemingly significant step forward.

Standard Chartered Hong Kong has opened a purely digital branch as part of its stated intention to take advantage of "major lifestyle changes" in 21st century society. According to Banking Technology, customers who visit the location will engage with interactive technology as opposed to branch staff, with the innovative move expected to be of interest to users of mobile technology such as smartphones and tablets.

"Digitization has become one of our top priorities as we strive to create a superior banking experience for our customers," said Benjamin Hung, executive director and chief executive of Standard Chartered Hong Kong, in an interview with the news source. "With the innovative technology and user-friendly features at this digital branch, simple banking services can now be done through digital channels and transactions are settled more efficiently."

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While the introduction of a digital location in Hong Kong is a logical step promoting the various services that the bank offers in a user-friendly environment, the key word in Hung's statement is "simple." Unfortunately, it seems the futuristic concept of this branch glosses over the need for digital technology behind its electronic transactions.

To stay compliant with regulations in the banking industry, financial transactions like account openings or loan origination need to capture a customer's intent to be bound to the terms and conditions of financial products. So while Hong Kong's digital bank offers electronic signature capture pads, what they're not offering is a capture of intent behind the signature that an electronic signature software built on digital signature technology offers – something that can't be overlooked in the branches of the future.

What's holding digital back?

Recent studies have shown that banks in Europe are lagging behind when it comes to moving business online despite McKinsey analyst and Financial Times contributor Tunde Olanrewaju sharing that 66 percent of banking customers are expected to become "self-directed" or adapted to encrypted business practices such as digital signature within the next five years. So what's holding digital back? The same report cites that bank executives are looking at digital too narrowly, thinking only in terms of stand-alone, front-end functionality rather than the straight-through processing, something e-signatures built on digital signature technology facilitate.

With that in mind, it appears that Standard Chartered customers in Hong Kong are taking the first step towards a digital future, however one that needs to consider the back-end of processes and focus on building digital technology into those areas. For more information on how to integrate digital signature technology into current banking practices, download the Electronic Signatures for Banking Beginner's Guide.