A study by PwC has said Hong Kong banks could earn at least an additional HK25 billion over the next six years by better client service.

Banks in Hong Kong, including those serving wealthy clients, have
the potential to boost revenues by at least HK25 billion by 2020, and a big
majority of such banks see the problem but too few are tackling it, according
to an industry study by PricewaterhouseCoopers.

A PwC-commissioned poll of 300 Hong Kong
banking customers in the emerging affluent and affluent segments has revealed a
high level of dissatisfaction with their current banks – only 14 per cent
believe that their bank will listen to their feedback and only 15 per cent of
these customers would be willing to recommend their bank to friends and family.
 In addition, less than half of those customers who have been provided
with a relationship manager by their bank actually know that individual’s name.

The
consultancy firm said the figure is based on conservative estimates; banks can
obtain such an incremental improvement if they employ the same approach to
serving client as is used by new entrants into the financial services industry.

To
bolster the idea that banks are missing out on a big revenue gain opportunity,
PwC says its global Retail Banking 2020 survey found that 80 per cent of banks
is surveyed say they have a problem with customer service but that only 18 per
cent are actually doing anything to improve the situation.

The report said that “among
the wide range of forces that are being felt within the retail banking industry
is the arrival of entirely new players. They bring capabilities that the
incumbents don’t possess: they have a flair for innovation and a deep
appreciation of the value of data analytics, HK being unhampered by clunky
legacy systems”.

“Banks
must generate greater value for their customers,” says Peter Li, PwC Hong Kong Banking and Capital Markets Leader. “We are
seeing new providers attracting and retaining customers through a superior
experience that challenges banks’ traditional focus on products and channels.
 This is a tremendous challenge – but the rewards are there if they can
overcome it,” Li said.

“Banks are aware that
customers are unhappy with existing levels of service and are more willing than
ever to go elsewhere,” said James Quinnild, PwC Hong Kong
Financial Services Consulting Leader for Asia Pacific.

“What
explains banks’ lack of progress is the complexity of the challenge. It is not
enough just to enhance channels or products through technology. Banks need to
undergo a true transformation in what drives every aspect of their business; as
new entrants are bringing innovative cultures, streamlined supporting
operations and trusted financial/transactional relationships with customers,”
Quinnild said.