With the Covid-19 pandemic accelerating digital transformation across businesses, adaptation to the digital age loomed large during the discussions at the ACCA Hong Kong virtual annual conference 2021.
The challenges of adapting growth strategies to the digital age were highlighted during an online discussion forum at the event. Fred Ngan, co-founder and co-CEO at life insurance company Bowtie, said: ‘Since Covid-19, health has become top of mind and we saw an increase in our website traffic. Customers are concerned about how to purchase a suitable insurance package. We captured the demands, and opened up a clinic and ran a coffee shop in our studio to have a connection with customers.’
Herman Cheng, head of digital banking at Hang Seng Bank, saw similar trends on the bank’s digital platform in terms of day-to-day transactions and investments, insurance purchases and forex trading. ‘Though people spend more time at home, the demand for banking services still exists, forcing people to shift to use the online platform,’ he said. ‘Also, the Government’s Cash Payout Scheme promotes the use of online banking.’
Shift to digital
Cheng’s department thinks highly of the customer engagement on the platform and the business it generates. For him, digital is not merely about putting information online but also includes the value of the user experience and the information included on the platform.
‘But not all business is suitable for doing online,’ Cheng pointed out. ‘For services like insurance purchases and wealth management, which have a knowledge threshold, we intend to offer enough information online and direct customers to our branches, where we can serve them better.’
‘Departments may not be willing to take the risk of a technology implementation failing, so digital transformation has to be top-down, not bottom-up’
Different industries face different difficulties achieving digital transformation. ‘Since we are a startup that has built up the online system, we have less legacy,’ Ngan said. At the other end of the legacy spectrum, Hang Seng did not set up a new entity to carry out digital transformation but decided instead to improve the digital element within its core banking operations, according to Cheng, which requires collaboration with different departments.
‘To operate a business and digitalise at the same time requires understanding from your colleagues, which is hard. The application of a new technology may face failure, and other departments may not be willing to take the risk. Therefore, the digital transformation has to be done from the top down, not the bottom up,’ said panel discussion moderator Jennifer Tan FCCA, CEO at Alipay Financial Services (HK), executive vice president for the GBA at Ant Group, and chair of ACCA Hong Kong.
And the challenges are not exclusive to big business. Small and medium enterprises also have big decisions to make on digital. ‘Small and medium enterprises can directly adopt solutions from startups,’ Cheng pointed out, while Ngan advised: ‘Do not try to rebuild things – any function can be found on the internet. See what makes efficiency a little higher on use.’
Data protection
One concern is that, as corporates implement digital platforms and tools, they invariably collect more data from users, which is something that often gives customers pause for thought.
Take the example of ‘open banking’, which allows third-party financial service providers to gain access to customers’ data from financial institutions. ‘The essence of open banking is that the objective is to enable customers to use the data and services from banking,’ said Cheng. He believes that this can bring convenience for customers.
‘Our creativity, problem-solving skills and prompt judgment certainly won’t be replaced. We should not fight the machine, just be more creative’
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However, giving customers confidence that data is appropriately handled remains an important issue.
Cheng said: ‘The regulator has put in a lot of effort and set up regulations to protect information. But the range of data is so wide that how to effectively make use of it ethically is a big issue for the future. Internally, banks also refine security systems, educate customers and improve their fraud detection.’
Cheng believes that banks are very stringent about data protection and take care to follow the restrictions imposed by the Personal Data (Privacy) Ordinance.
Ngan suggested there is another way to protect data. ‘We have an online evaluation system which will ask users questions like a virtual doctor. The system won’t ask for their personal information. Unless the customer makes up their mind to buy insurance, we are unable to trace it back to the person, and that gives some space to customers and helps us to gain their trust.’
Creative skills
A question for many at the forum was how accountants and finance professionals can equip themselves in the digital age, and whether the role of accountants would eventually be replaced by artificial intelligence and robots.
Ngan, for his part, believes everyone is an app user nowadays, and understanding the needs of users may help accountants develop the business sense behind digital efforts. At the same time, accountants have a strong learning ability, which makes it easier for the profession to adopt new technologies.
‘The mechanical work will be replaced, but you will have more time to do analysis, to understand what the users need,’ said Ngan. ‘We are surrounded by technology. Our creativity, problem-solving skills and prompt judgment certainly won’t be replaced. We should not fight the machine, but just be more creative.’
