Welcome to the latest edition of Protiviti’s Asia-Pacific (APAC) Financial Services Insights. In this monthly newsletter, we provide a summary of important developments across the APAC financial services sector, including those related to the ever-changing regulatory landscape.
Recent headlines across the region are dominated by the evolving impact of the prolonged COVID-19 pandemic. Due to the changes brought on by social distancing, the industry faces increased consumer demand for enhanced digital experiences, while at the same time financial institutions deal with an increase in cyber-attacks. Concurrently, regulatory bodies and central banks in the region continue to introduce new measures intended to offer relief to banks and their customers.
According to security firm McAfee, cyber hackers are exploiting threat opportunities by abusing cloud account credentials, with financial services being the biggest target. The financial services sector witnessed a 571 percent increase in cloud threats from January to April 2020.
(Independent Financial Adviser, 01/06/2020)
Shifts in consumer behaviour towards digital services are resulting in monumental changes across the banking industry in Asia. The pressure is on for incumbents to adapt to the new world by offering the digital experience that customers are starting to expect.
(FinTech Hong Kong, 08/05/2020)
Across the industry, IT and operations teams are working hard to tackle operational, technical and logistical challenges in a changing environment. Many banks have come to realise that the ongoing situation is likely to alter the customer experience landscape forever.
(Retail Banker International, 04/05/2020)
According to recent survey findings from Finastra, Hong Kong is ahead of Singapore, the UK and the US in terms of financial institutions deploying artificial intelligence, but barriers to innovation persist.
(Hong Kong Business, 27/05/2020)
In response to several downside factors that have confronted the Hong Kong economy over the last two years, the Hong Kong Monetary Authority has rolled out a series of new measures to free up lending capacity and relax regulatory, liquidity and operational constraints.
(Regulation Asia, 13/05/2020)
ZA, the first virtual bank to go live in Hong Kong, has branched out into insurance after obtaining a digital-only insurer license. ZA Life will eliminate intermediaries through a digital-only insurance platform that fulfils quotations, underwriting and claims.
According to data from the Monetary Authority of Singapore, bank lending declined for the second consecutive month in April, with consumer loans taking a bigger hit than business loans from the disruption caused by COVID-19 measures.
(Straits Times, 29/05/2020)
More Singapore consumers took action to secure their financial future in view of COVID-19's drastic impact on the global and local markets. However, with increasing unemployment and an impending recession, the life insurance industry may experience an adverse impact, according to the Life Insurance Association of Singapore.
(Straits Times, 22/05/2020)
Major banks in Singapore have noted that, in the wake of social distancing measures, customers are opening accounts that they can use for digital investing and using robo-advisory services in greater numbers.
(Straits Times, 18/05/2020)
China's banking and insurance regulator said that bad loans at banks are at a high level due to the impact of the coronavirus pandemic. Chinese lenders recorded rising soured debt and shrinking net interest margins, a gauge of banks' profitability, amid the economic impact from a prolonged pandemic.
The China Banking and Insurance Regulatory Commission issued new rules on credit insurance and guarantee insurance contracts, raising requirements on insurers’ solvency margin ratios and risk control practices. Implementation of the new rules is expected in the short term to reduce the number of insurers eligible to provide financing credit insurance.
China published a list of guidelines to promote financial opening and innovation in the Greater Bay Area. The guideline was jointly issued by the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange.
The Bank of Japan introduced new funding for banks to help them make loans to companies affected by the coronavirus pandemic. The central bank said it planned to make loans at zero interest for up to one year to banks participating in a government lending programme that provides funds to cash-strapped smaller companies at no interest and with no collateral required.
(Market Watch, 21/05/2020)
Bank of Japan Governor, Haruhiko Kuroda, recently stated that he saw no need to take interest rates deeper into negative territory now, as the central bank's immediate focus was to pump money into cash-strapped firms and keep financial markets stable.
Financial Services Agency of Japan, together with the Bank of Japan, has written to the CEOs of major financial institutions regarding LIBOR transition. The purpose of sending the letters is to urge financial institutions to take actions for permanent cessation of LIBOR and to request submission of relevant materials to review the progress of preparedness in individual firms.
(Japan FSA, 01/06/2020)
The Australian Banking Association said that 100,000 loans had been deferred, bringing total deferrals to 643,000. The surge in demand for assistance shows that economic impacts continue to be felt, and most major banks have lifted their loss provisions in case of defaults, deferred or cut their dividends and raised fresh capital to prevent them through the crisis.
The Australian Securities and Investments Commission has granted banks regulatory relief to fast track the issuance of debit cards to ‘vulnerable customers’ dependent on cash amidst the COVID-19 crisis.
(Cards International, 29/04/2020)