You may think that being the Chief Executive of the HKMA, I only care about financial news. Actually, I also keep close tabs on the latest development of technology. Whenever I come across new inventions which can improve people’s lives, I often marvel at the creativity of scientists. They also inspire me to think how to harness technology to promote “financial inclusion” in Hong Kong.
“Financial inclusion” means that everyone, even those in the lower income strata, should be afforded reasonable access to basic banking services. Many may think that this can be achieved by the advent of internet banking. True, with internet banking, financial services are just one click away. But not everyone is able to benefit from it.
Some people, especially the elderly, are still reluctant to use automatic teller machines (ATMs). They are either sceptical of or oblivious to its use. They also find it difficult to seek in-person assistance. For the same reasons, they don’t bother to use internet banking. For those living in remote areas, banking service could be a luxury.
Technology may hold an answer to this intractable problem. During my recent visits to several local banks, I saw video teller machines (VTMs) newly developed by them, shaping a new direction for “financial inclusion”.
So what is a VTM? While the design and look of VTMs differ from banks to banks, they have similar functions. In general, they are larger than typical ATMs and come with a video camera and an ID card and document scanner, offering a relatively wide range of basic banking services like cash deposit and withdrawal, account enquiry, time deposit, money transfer, etc.
Many will agree that, no matter how advanced technology is, machines can never replace human touch. Take the soon-to-be opened Softbank cellphone shop in Tokyo as an example. Although humanoid robots, Pepper, will join the rank of storekeepers, human staff are still necessary to verify customer identities.
As I have seen in my visits to banks, services at VTM are provided by human staff. Through the video camera in the VTM, users can have “face-to-face” conversations with human staff sitting in the customer service centre. Staff can also read users’ ID cards with the scanner and identify them with the video camera. Guidance can be offered and enquiries answered in a convenient and safe manner, as if you were at a conventional branch counter.
VTMs can have wide applications. Not only can they raise the standards of banking service, but they can also foster “financial inclusion” in Hong Kong. VTMs enhance efficiency in banks’ manpower resource management. Instead of stationing at different branches, tellers manning VTMs can be centralised in one location and serve customers in different areas via the VTMs.
At the same time, in areas where suitable location for physical branch is difficult to come by, VTMs, which take up much reduced space, can provide an alternative. Further, with more flexible operating hours, VTMs can provide services outside the normal opening hours of bank branches. Nine-to-fivers may now be able to talk to tellers “in-person” after clocking out.
In fact, we notice that ATMs could be a rare find in some remote areas or neighbourhoods with high proportion of the aged. The HKMA has been following up with banks on the issue of insufficient branch coverage, and our efforts start to bear fruits. For example, following the launch of a mobile branch by Standard Chartered Bank last year, another bank is considering launching similar service.
I appreciate that banks are profit-seeking commercial establishments. Business in some places may not justify the running costs of a conventional branch. Some banks may also have difficulties in staff deployment. However, banks in Hong Kong still earn a decent profit from their business operations. Bank management should be guided not only by accountability to shareholders but also by the principle of customer centrism.
Retail banks should understand their social responsibilities. Providing a branch network convenient to customers is one of them. I encourage banks to be innovative in harnessing technology and implement “financial inclusion” after balancing benefits and costs, creating a win-win proposition for banks and the public.
Hong Kong Monetary Authority
18 February 2016
Financial inclusion series - second article
To review other articles in the series:
 Mobile Banking, Customer-Centrism, Financial Inclusion