Asia-Pacific Financial Services Insights - December 2019

Asia-Pacific Financial Services Insights - December 2019
Asia-Pacific Financial Services Insights - December 2019

Welcome to the latest edition of Protiviti’s Asia-Pacific Financial Services Insights. In this monthly newsletter, we provide a summary of important developments across the Asia-Pacific financial services sector, including those related to the ever-changing regulatory landscape.

In December, virtual banking and mobile financial services continued to be common themes across the APAC region. Hong Kong saw an increase in capitol outflow from investment funds due to continued unrest; In Singapore, those aspiring for digital banking licenses must prove they can make China moves closer to scrapping foreign ownership limit; Japanese banks eye JPMorgan’s blockchain network, and Australia urges the banking industry to address high cross-border fees.

APAC

APAC investment banks face increased pressure from global challenges

According to Fitch Ratings’ report, global macroeconomic challenges are likely to increase pressure on the short-term earnings prospects of investment-grade banks in APAC. Fitch said banks in most markets faced several challenges in their operating performance which are decreasing net interest margins and overall profitability.

(NET, 03/12/2019)

Asia Pacific leads in adoption of mobile financial services

The introduction of mobile technologies has brought incremental innovation across industries, including the personal finance space. In APAC, finance app downloads jumped from 383 million in 2014 to a massive 1.8 billion in 2018, showing that APAC has been gaining momentum in this field. When it comes to number of downloads per user, China is at number one with user downloading 6.8 finance apps on average.

(Fintech Singapore, 04/12/2019)

Data privacy in APAC: A fragmented landscape

With the emergence of fintech and added competition from big technology firms entering i consumer finance, data governance and privacy have never been more important. Japan has been the only country in Asia to be granted an Adequacy Decision by the European Commission, highlighting that the rest of APAC’s privacy laws are fragmented.

(Regulation Asia, 10/12/2019)

Hong Kong

Hong Kong, Thailand to roll out two-tier token to speed up cross-border trade settlement

The monetary authorities of Hong Kong and Thailand are poised to roll out a two-tier digital token, part of the process for creating a prototype for cross-border fund transfers between the two economies using financial technology. The use of the blockchain-backed token is expected to speed up currency settlement between the two economies which have US $19.6Bn in bilateral trade in 2018.

(SCMP, 04/12/2019)

Hong Kong's WeLab raises US $156M as virtual bank launch approaches

Months after scooping up one of Hong Kong's new virtual banking licences, mobile lender WeLab has raised US $156M of Series C strategic financing to further build out its proposition. The financing round drew the backing of new investors as well as five existing investors, including Alibaba Hong Kong Entrepreneurs Fund and China Construction Bank.

(Finextra, 12/12/2019)

US $5Bn leaves Hong Kong funds amid unrest, says Bank of England

According to the Bank of England (BoE), unrest in Hong Kong has led to as much as US $5Bn of capital outflows from investment funds in the Asian financial hub since April 2019, equating to nearly 1.25% of Hong Kong's gross domestic product. The BoE monitors Hong Kong since several leading UK banks having a significant presence in the market.

(Business Standard, 17/12/2019)

China

China allows foreign firms to own majority of joint ventures

The China Banking and Insurance Regulatory Commission now allows foreign entities to own more than half of the shares in life insurance joint ventures. This move is in preparation for the scrapping of the foreign ownership limit in 2020 and is part of Beijing’s push to further open up China’s finance industries to foreign investment.

(Insurance Business, 07/12/2019)

China's central bank issues 10 Bn worth of bills in Hong Kong

The People's Bank of China (PBOC) announced that it has issued 10 billion yuan (US $1.43Bn) worth of bills in Hong Kong. The bills will mature in six months, with an interest rate of 2.9 percent, according to the PBOC. This move helps to enrich yuan-investment products with high credit ratings in Hong Kong, offer more yuan liquidity management tools, improve the yield curve of yuan bonds and advance the yuan's internationalisation.

(Xinhua Net, 20/12/2019)

Singapore

Grab Singapore launches numberless cards for payments

Grab Singapore, in partnership with Mastercard, launched a numberless card that can be used as part of its e-wallet app, GrabPay. The GrabPay card comes without any numbers on the physical card - a feature that supposedly offers users exceptional security, along with a host of additional rewards and offers.

(Entrepreneur, 05/12/2019)

The Monetary Authority of Singapore (MAS) co-launches steering committee for the insurance industry

MAS, together with the General Insurance Association of Singapore, the Life Insurance Association and the Singapore Reinsurers’ Association, has established the Insurance Culture and Conduct Steering Committee to strengthen culture and standards of conduct amongst insurers in Singapore.

(SBR 13/12/2019)

Singapore digital bank aspirants must prove they can make money

MAS is putting more emphasis on profitability and strong capital requirements than some other regulators inviting fintech firms into banking. Companies aspiring for digital bank licenses in Singapore must prove how their users will help them to generate profits in order to win digital banking licences.

(Strait Times, 18/12/2019)

Japan

MUFG Bank to launch smartphone payment service

MUFG Bank will set up a joint company with human resources services provider, Recruit Holdings Co., to launch a smartphone-based cashless payment service. The core banking arm of MUFJ Financial Group Inc. will seek to utilize Recruit’s client base amass participating stores and users for the service, in a market currently dominated by technology companies.

(Japan Times, 04/12/2019)

JPMorgan blockchain network may draw more than 80 Japanese banks

More than 80 Japanese banks have expressed interest in joining the Interbank Information Network (IIN), JPMorgan’s blockchain-based payment network, which it plans to launch in Japan at the start of 2020. The IIN will help Japanese banks bolster their anti-money laundering and counter terrorist financing strategies.

(Banking Dive, 10/12/2019)

Australia

Australia central bank keeps cash rate at 0.75% despite doubt over spending

Australia's central bank held interest rates at a record low, despite uncertainty over consumer spending ahead of the festive season. Reserve Bank of Australia chief Philip Lowe said, the cash rate would remain unchanged at 0.75 per cent as downside risks in the global economy lessened recently.

Australia banks need to do more on payments, cross-border fees

Australia’s central bank want the country’s banking industry to roll out new payments platforms at a faster rate and to reduce fees on some products, particularly for the high cost of sending money across international borders. Reserve Bank of Australia noted the price of sending money out of Australia has been consistently higher than the average for the rest of the G20 nations.

(Reuters, 10/12/2019)

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