Speech at The Hong Kong Management Association 2010 HKMA Quality Award Dinner

1. It is a great honour to speak at this year's HKMA Quality Award Dinner. When David invited me in November last year to be the Guest Speaker tonight, I gladly and promptly accepted the invitation, not only because David is a good friend of mine for many years, but also because there is a favour that I owe the HKMA. When the Hong Kong Monetary Authority was set up in 1993, it was not surprising that people would address us in short form as "HKMA", which is the same as the abbreviation for the Hong Kong Management Association. I had harboured the fear that the Hong Kong Management Association, which was set up many years before we did, would object to the use of "HKMA" by us. However, what I feared did not materialise. So David, you may not have thought too much about this, but we in the Hong Kong Monetary Authority are most grateful to the Hong Kong Management Association for your understanding and forbearance.

2. I have been asked by David to speak on a subject of my choice. While I could certainly talk about housing bubble in Hong Kong or the macroeconomic imbalances that the world is now facing, I thought it would not befit tonight's occasion if I don't talk about quality.

3. But what do I know about quality? I am of course not qualified to talk about how to achieve and maintain high quality by a firm engaged in production or in services. One thing I do know, however, with rapid pace of globalisation and technological development, the marketplace has become much, much more competitive across all fields over the past decade or two. Nothing can be taken for granted and past market share or dominance can be wiped out in no time if a company becomes complacent and starts to lag behind its competitors. So constant pursuit of quality is not only the key to success, but also vital to survival.

4. Obviously quality is not only relevant to private firms, it is equally relevant to public services. May I share with you the message I shared with my colleagues in the Hong Kong Monetary Authority at a staff gathering on the first day I took over the position as the Chief Executive. I was asked what would be my expectation for the HKMA staff going forward. I said that, as the HKMA was providing vital public services to Hong Kong, our community would expect nothing short of the highest standard or quality when we discharged our duties. This is what I expected of my colleagues in the HKMA. I then elaborated on what I meant by using three "Ps" in achieving quality of services in the context of the HKMA. Let me explain here what three "Ps" means.

5. The first "P" is easy to guess and understand. It is "Professionalism". The areas in which the HKMA is responsible for are matters requiring very high technical and professional expertise and skills. It does not matter whether it is the supervision of over 190 authorized institutions in Hong Kong with about HK$11 trillion of assets in total, or the management of over HK$2 trillion of assets of the Exchange Fund, or in the macroeconomic surveillance or market research work that we undertake every day, professionalism is the key and is everything. If the HKMA does not excel in professionalism, we are failing our duty.

6. The second "P" is passion. This means our colleagues in the HKMA should be passionate about the work they do. This is somewhat more difficult to understand. Being passionate is an important point because the mere fact that our colleagues in the HKMA are highly professional in their respective fields does not necessarily mean that they can deliver quality service to the community. In the private sector, it needs no explanation regarding the point that a service provider, regardless of their fields, must ensure that they know who they are serving and how they can serve their customers better. It is not easy to achieve or maintain quality service to customers if the staff of a service provider is professionally proficient but lacks passion in what they are doing. They could probably provide adequate service but not quality service on a sustained basis that the customers wish to have. The same principle applies to the work of my organization. It is not enough just to be professional in our work. The HKMA staff must be passionate about the work they do. It is true that the HKMA is discharging public duties, such as banking supervision, and is not serving "customers" in the usual sense of the word in a commercial world. However, it is equally important that we feel passionate about the work we do and about how to improve the quality of our service. In the context of the HKMA, empathy is often a useful point to bear in mind. For example, when we supervise banks, we need to ensure that banks comply with the relevant rules and risk management standards. However, we should also care about minimising banks' compliance and reporting burden without compromising the necessary prudential requirements. Similarly, when we introduce measures to improve the regulation on the sale of financial products by banks in Hong Kong, we must care about the need of bank customers who want to have convenience in buying investment products as well as the need to provide investors with appropriate protection. At the same time, we should also care about banks' practical considerations in providing such services without creating unnecessary impediments for both the banks and the customers. To achieve this goal, our colleagues in the HKMA need to have empathy or, put it in another way, apply their "hearts" in order to render good care for our "customers", which in this case includes both bank customers and banks themselves. Of course, the issue becomes a lot more complicated when there are conflicting requirements between different customers at the same time. If you have another three hours for me I can go into more details about striking a balance here, but let's not do this for now as I am mindful of the empty stomachs around.

7. Let me turn to the last "P". It is "Pride". If the HKMA serves the community in a professional and passionate manner, it will be welcomed and embraced by the public. Then our colleagues can justifiably feel proud of being staff members of the HKMA. The self-pride (自豪) will become an important motivation for them to further excel in their job and strive for even higher quality. I have kept on reminding my colleagues in the HKMA that they should guard against the mistake of feeling proud simply because they discharge their duties in a professional manner without sufficient passion or heart. This is because pride without public endorsement can only be regarded as complacency (自滿) or arrogance (自大). This is not the kind of quality service that our community would expect from the HKMA.

8. I think I should stop here. And thank you, David, for giving me this opportunity to speak at tonight's HKMA Quality Award Dinner.