Study: 3 most popular digital banks in HK and what's driving their uptake?

Hongkong citizens are getting more used to digital banking services as half of them have opened a virtual banking account, but concerns remain  over security and data privacy. The Visa Consumer Payment Attitudes Study 2021 examined the preferences and emerging trends of consumers in Hong Kong, Macau and Taiwan.

In Hong Kong, half of the citizens had an account with a virtual bank because of the rewards with account opening (58%), better interest rates for savings (55%) and quick and easy account opening procedures (36%).

Also, the awareness of virtual banking has risen from 75% in 2020 to 86% this year, with ZA Bank, Ant Bank and Mox being the most popular virtual banks.

Respondents in Hong Kong still have concerns over virtual banks. For example, 34% believe that there was a higher chance of accounts getting hacked, while 31% think that they will fall victim to fraudulent or unauthorised transactions.

“The pandemic has led to a big shift in consumer behaviour as digital becomes more integral to everyday life. We are delighted to see that virtual banks are springing up in the region, and more consumers are embracing mobile banking services. These trends have brought new opportunities to the market, particularly for the payments industry," said Maaike Steinebach, general manager, Visa Hong Kong and Macau.

Apart from virtual banks, the study has also examined other preferences over digital banking.

Nearly four out of 10 consumers in Hong Kong used more mobile banking services from their primary banks than the pre-COVID period. The same level of growth is expected one year from now on.

Mobile banking was the most frequented banking method in Hong Kong as 82% used it several times a month. 

Moreover, 82% of Hong Kong consumers have mobile banking apps installed on their phones (77% in 2020), citing that they can save some time by not travelling to the bank (68%), access mobile or online banking (65%), skip the queue at the bank (64%).

However, traditional banks continue to have the upper hand mainly due to security concerns. Around 80% of respondents said they would use traditional banks as their main bank; while 59% feel that their money was safe in the traditional banks and 56% find traditional banks reliable for transacting. 

Lastly, the majority of Hong Kong, Macau and Taiwan respondents believed that data sharing poses more risks than benefits. They were hesitant to offer their personal data for monetisation, and 63% of consumers thought they should be the main custodian of their personal and financial data instead of banks, government, or corporations.

In Hong Kong, people were most worried about monetary loss due to unlawful acts (56%), malicious intentions of hacking and obtaining information (55%) and unauthorised information sharing with third parties (53%).

In contrast, respondents showed growing faith in mobile payments as 61% felt safe when using mobile payments, a substantial increase from 28% in 2020. Nearly 20% of respondents experienced security breaches for mobile payments. For example, they were not charged the proper amount (18%) by merchants and companies misusing personal information (18%) were two common breaches encountered by users, followed by companies not providing sufficient security to protect mobile transactions (16%).

"It is of crucial importance for the industry to balance convenience, speed and user experience with robust privacy and security protection. Visa will continue to work closely with these service providers to bring innovative and secure payment solutions to consumers," Steinebach added. 

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