Adapt to thrive: HKIB conference provides vital insights into preparing for ‘new normal’ in the banking sector
With markets roiled by the shifting economic fortunes of mainland China and the US, as well as volatility in currency markets and a looming rise in interest rates, it’s clear the world is moving into a “new normal”.
But that shouldn’t necessarily be the beginning of a downward cycle for Hong Kong and its banking sector, according to Dr Patrick Fung Yuk-bun, chairman of The Hong Kong Institute of Bankers’ (HKIB) Executive Committee.
Also chairman of OCBC Wing Hang Bank, Fung says there is enough innovation and new initiatives in the pipeline to keep the city’s finance sector ticking along. It is a theme on which he is keen to elaborate at the HKIB Annual Banking Conference at the Hong Kong Convention and Exhibition Centre.
“It’s true that economic growth in mainland China has slowed, but it’s important to put that downturn into the context of the nation’s development and in the global context,” Fung says.
“It is increasingly apparent that the new normal will be a period of more sustainable growth, driven by the mainland’s transition to a highly advanced tertiary economy,” he says. “Already capital is on the move from production and manufacturing to value-added industries.”
The Chinese leadership spelt out the terms of the new normal during the Third Plenum in late 2013. It would see momentum shift to a “higher quality” economic growth and an enhanced effort to allow the market to play a greater role in determining the allocation of resources.
Part of how the new normal is expressed is also through opportunity and Fung says there are significant opportunities emerging for Hong Kong’s finance sector. The Stock Connect scheme, mutual fund recognition scheme, the “One Belt, One Road” infrastructure development programme and the Asian Infrastructure Investment Bank should make better use of the city’s natural advantages as a global centre for finance.
“Banking is very much part of this city’s DNA and we’re beautifully placed to create significant new opportunities for ourselves and the community,” he says. “The city can capitalise on these opportunities if bankers continue to innovate, and revisit our priorities and business models.”
Innovation is at the heart of the conference. One of the hottest topics is the race to establish new business lines within banks that make full use of emerging technology.
Financial technology, or “fintech”, might be viewed as a disruptive force to traditional banking, but Fung disagrees.
“The pace of change in the new normal environment is something the banking sector has never experienced before,” Fung says. “The changes we’re witnessing are taking place at a faster rate, and will have far-reaching effects on the markets, as well as the way we conduct our business and engage customers.”
“The extent of the changes reminds me of a ‘Big Bang’ in comparison to how the business has traditionally developed.”
This year’s conference will see a three-hour block devoted to fintech. Attendees will hear the latest regulatory efforts from the Hong Kong Monetary Authority and learn how data can help improve the experience of their customers.
In the panel discussion “Turning Fintech into Value – Putting Innovation into Action”, business leaders from IBM, Accenture and DBS Bank (Hong Kong) will talk on topics that include overcoming hurdles in creating a digital-ready bank, privacy, and online safety concerns.
While these changes are typical of the questions being asked at all levels of the finance sector, their potential impact is perhaps felt no more acutely than by bank staff. Fung says the Annual Banking Conference is designed to meet the needs of middle-management professionals and deliver actionable takeaways.
“Within the banking sector there is an exceptional demand for new skill sets; it is perhaps the most positive outcome from the new normal,” Fung says. “If I could offer any one piece of advice to the modern banker, it would be to grasp the changes and the opportunities that come with reinvention. With any change comes a great opportunity for the best talent, and the HKIB is well placed to assist bankers embrace the future of the industry.”
LASTING LOYALTY TO LEARNING
No matter the state of Hong Kong’s economic health, the one consistent during the upturns and the downtimes for the past 52 years has been The Hong Kong Institute of Bankers’ (HKIB) commitment to education.
Carrie Leung, chief executive of the HKIB, says the institute has played an integral part in developing the finance sector’s human resources, and that continues at this year’s Annual Banking Conference.
“The institute has a mandate from the banks in particular and finance sector more generally to help finance professionals stay ahead of the curve,” Leung says.
“The Annual Banking Conference is the ultimate expression of that, with intelligent analysis from insiders who offer peerless insights into the business.”
This year’s conference surveys the impacts and opportunities of mainland China’s “new normal” phase of economic development. Among the elite speakers are three chief executives of leading mainland banks: the Industrial and Commercial Bank of China (Asia), China Construction Bank and Bank of Communications (HK).
Their views will be complemented by the conference’s keynote speaker, Secretary for Financial Services and the Treasury Prof KC Chan.
Since the last annual conference, the HKIB has been deeply involved in the expansion of the Hong Kong Monetary Authority’s Enhanced Competency Framework programme. Leung says the scheme’s major objective is to provide a career path and education milestones for bankers.
“We are committed to developing sets of qualifications that will help finance sector professionals and create career opportunities along the way,” she says.
“It’s our hope that with the right learning opportunities in place, Hong Kong’s bankers will be able to weather any challenges that the global economy might present. The slowing growth of the ‘new normal’ might represent change, but we’re confident that the educational framework and support we’re helping develop will be beneficial in the long run.”