Here's how fintech disrupted banks' customer-facing functions

The number of people engaged in banking fell 0.6% from 2015 to 2016.

Hong Kong banks are embracing financial technology (fintech) and improving services, but some of their customer-facing functions are deteriorating, Deacons Hong Kong revealed.

According to a study with Corrs Chambers Westgarth and Employment Law Alliance (ELA), fintech improved Hong Kong's currency exchange, online lending and wealth management using large data chunks.

However, the customer-facing functions in banking and financial services are being challenged.

The number of banking establishments in Hong Kong has declined for four consecutive years from 2012 to 2016 by 5.23%, and the number of persons engaged in the sector has also fallen by 0.6% from 2015 to 2016.

This is to be contrasted with the drastic increase of gross output of the banking services by 29% from 2012 to 2015.

"This exhibits a negative correlation between business performance of banking services and the number of persons engaged in this sector," the report said.

As a result, banks and financial institutions have made attempts to digitalise customer-facing functions.

Banks like the Bank of East Asia, Standard Chartered, and Wing Lung have introduced efforts such as mobile banking platforms, online credit card and mortgage applications, and cheque processing through an integrated retail banking system.

"All in all, the expansion of digital ecosystem and platforms has reduced the demand for the lower-skilled labour as back-office procedures in banking and trading operations have increasingly been automated by digital solutions," the report said.

However, Deacons also highlighted that automation is not only about threats and disruption.

The firm said fintech also has opportunities for Banking and finance professionals offering tailormade solutions to customers, like using predictive analytics.