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Online Banking in Hong Kong

Product Type: Market Research Report
Published by: Datamonitor
Published: July 2008
Product Code: R313-34409
Description
Introduction

The Hong Kong online banking market is among the most advanced in the world, with online banking portals offering sophisticated features not seen elsewhere. The Hong Kong market is mature with around 3.5 million online banking customers. Hong Kong’s close ties with mainland China makes the market an ideal springboard for financial institutions looking to expand into the mainland.

Scope
  • Includes a comprehensive overview of the Hong Kong online banking market.
  • Provides online banking customers data and market share of top competitors.
  • Discusses security issues and two-factor authentication.
  • Analyzes current trends in the market.
Highlights

There are over a hundred fully licensed foreign banks in Hong Kong, in addition to 23 fully licensed domestic banks. In Hong Kong’s three-tier system of banking there are also dozens of restricted license banks and deposit taking companies, which are limited in terms of offering retail banking to the public.

The emergence of banking directly from the mobile phone will change the playing field for security and two-factor authentication. If the banking transaction is performed on the mobile phone, then that device is no longer considered “out of band” as a separate route of confirming identity.

Although not as fast off the mark as some other countries, Hong Kong banks have shown foresight when it comes to realizing the potential of the online banking proposition, as well as being proactive regarding channel challenges. Chekiang First Bank started offering basic online banking in 1997, and Citibank introduced online banking in 1998.

Reasons to Purchase
  • Improve your strategic position using Datamonitor's in-depth analysis of the Hong Kong online banking market.
  • Understand the unique challenges the online banking market is facing, and benefit from forecasts of future product trends.
  • Financial services providers hoping to tap the enormous market of mainland China should study analysis of the Hong Kong market first.
Table of Contents
Overview
Catalyst
Summary
Executive Summary
The state of online banking in Hong Kong
Competitive dynamics of the Hong Kong online banking market
Future focus
The State of Online Banking in Hong Kong
Hong Kong is highly connected
Online banking is commonly used in Hong Kong
Online banking has contributed to deposit growth in Hong Kong
Hong Kong is one of the world’s most technologically advanced markets
Competitive Dynamics of the Hong Kong Online Banking Market
There are 138 fully licensed banks in Hong Kong
Two-factor authentication has been managed in different ways
Banks have different strategies when it comes to online banking
A wide range of products and services are offered online
Future Focus
Online will become the dominant channel
Security will continue to be the main concern for consumers
Hong Kong will remain on the cutting edge of innovation
APPENDIX
Supplementary data
Definitions
Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
TABLE OF FIGURES
Figure 1: Online banking customer numbers have grown strongly since 2002, 2002-08
Figure 2: HSBC has a dominant market share of online banking customers in Hong Kong, 2008
Figure 3: Mobile phone subscription rates are high in Hong Kong, 2007
Figure 4: Internet usage is prevalent in Hong Kong, 2007
Figure 5: Internet penetration has increased strongly in Hong Kong over the last seven years, 2000-07
Figure 6: The elder generations of Hong Kong residents are less likely to use the internet, 2000-07
Figure 7: Internet access and website propensity have increased in Hong Kong businesses, 2000-07
Figure 8: Broadband subscription in Hong Kong has increased strongly, 1998-2007
Figure 9: A rising proportion of Hong Kong internet users access electronic business services, 2001-07
Figure 10: Online banking customer numbers have grown strongly since 2002, 2002-08
Figure 11: Bank deposits have grown strongly in Hong Kong over the last decade, 1997-2008
Figure 12: Hong Kong ranks among the world’s most advanced nations in terms of ICT, 2006-07
Figure 13: HSBC has a dominant market share of online banking customers in Hong Kong, July 2008
Figure 14: Visitors to Hong Kong banking sites come from different countries, 2008
Figure 15: Hardware tokens are offered for two-factor authentication in Hong Kong
Figure 16: 2FA affects the key factors of online banking for both customers and providers
Figure 17: The main steps in SMS based two-factor authentication
Figure 18: The BEA online demonstration tour shows the services available online, June 2008
Figure 19: The online channel is the cheapest for banks and the most convenient for customers
Figure 20: Online banking customer numbers will increase over the next three years, 2002-11
Figure 21: Security is paramount for prospective online banking customers, 2005
Figure 22: Hong Kong residents are concerned about security, 2007
Figure 23: Security concerns in Hong Kong have increased somewhat since May 2007
Figure 24: Banks should work on improving both real and perceived security
TABLE OF TABLES
Table 1: Locally incorporated licensed banks in Hong Kong, July 2008
Table 2: Hong Kong online banking sites and traffic rankings, July 2008
Table 3: Number of customers regarding bank as main online banking institution, July 2008
Table 4: Top seven non-Hong Kong locations for visitors of Hong Kong online banking sites, 2008
Table 5: Different Hong Kong banks offer different 2FA solutions
Table 6: Advantages and disadvantages of different 2FA solutions
Table 7: Mobile phone subscribers per 100 inhabitants in selected countries, 2007
Table 8: Internet users per 100 inhabitants in selected countries, 2007
Table 9: Proportion of Hong Kong households with PC and internet, 2000-07
Table 10: Proportion of Hong Kong businesses with website and internet, 2000-07
Table 11: Broadband subscribers in Hong Kong, 1998-2007
Table 12: Proportion of Hong Kong residents that have used the internet in last 12 months, 2000-07
Table 13: Proportion of Hong Kong internet users who name electronic business services as major purpose of internet, 2001-07
Table 14: Online banking customers in Hong Kong, 2002-08
Table 15: Different types of bank deposits in Hong Kong, April 1997-November 2003
Table 16: Different types of bank deposits in Hong Kong (continued), December 2003-April 08
Table 17: E-readiness score for top 10 countries in 2007, 2006-07
Table 18: Location of visitors to Hong Kong banking sites, June 2008
Table 19: Market shares of online banking customers in Hong Kong, 2008
Table 20: Factors prospective online banking customers look for, 2005
Table 21: The Global Unisys Security index, 2007
Table 22: The Hong Kong Unisys Security index, May 2007-08
Table 23: Forecasted online banking customer numbers in Hong Kong, 2002-11
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