Taipei Times (TT): Many Taiwanese do not feel as much of a need as before to save money in the bank due to low interest rates. We noticed that Standard Chartered [StanChart] Taiwan’s deposits rose only 1.06 percent last year from a year earlier. Are you concerned with the slow pace given that banks traditionally rely on retail deposits to fund long-term loans?
Andy Halford: Interest rates go up and go down. If you go back to the beginning of this year, most people worldwide were expecting interest would be gently rising. The fact is that no one will know how the benchmark rates would change in the next 10 months or 20 months.
Even though in a low interest rate environment, customers still need to find a home for their money. Banks that are trustworthy, safe and competitive should still have good potential in deposit business. Deposits are important for us. We must make sure we are market competitive. Currently, we book a market share between 3 to 4 percent globally, so there are growth opportunities.
Photo: Kao Shih-ching, Taipei Times
We focus on our relationships with customers. It seems that customers move more into digital space so we are to use new digital programs to attract them.
TT: StanChart earlier this year announced that it would accelerate its digital transformation. Could you share how that would help the bank grow?
Halford: I spent 15 years working in Vodafone Group PLC. People buy and use more mobile services. Technology is changing consumers’ behavior ... and with [the younger generation] growing up, we need to play a part in digital service and offer them mobile access to our financial service.
We have four approaches. Firstly, we have won Hong Kong’s first three licenses to open a virtual bank. We [plan to] launch the bank next year. We see that as an interesting opportunity to deploy different technologies and would use a new operational model running the bank. If it is successful, there is no reason why the approach cannot be adopted in other countries.
Secondly, we have launched digital-only banks and offer a mobile-based application for consumers to apply for loans in Africa. Currently, the services have been operated in eight markets. It has been very, very successful. We have signed up as many new customers in the past six months as in the previous six years.
Thirdly, were are looking to develop software that would enable us to join up with e-commerce operators who have got bountiful customers but do not currently offer financial services or products. Customers who want to borrow money or use a better payment service could be extended into our service through the software connection. So, we can find new customers.
As for which operators we are to partner with, it would vary by market. We will be looking at market dynamics and be flexible.
Lastly, we are working with other companies doing experiments with new ideas to see what new service we can offer to meet new demand from our clients. An instance is the application of blockchain.
TT: Has StanChart seen new business opportunities with the supply chain reshuffling amid the US-China trade tensions?
Halford: Taiwan has some very valuable suppliers. If companies are considering making a change, we can help them plan, advise them and offer them financing and other services, as we have significant and longstanding operations in many markets. We are neutral about which country they should invest in.
Meanwhile, supply chains have been more complex in a time [that is] less predictable. How fast the supply chain transfer occurs varies by different sectors and depends on specific and individual circumstances.
Some types of investment are less easy to move due to human capital. [Moving] is also about whether companies think current uncertainties would be there for a long time, or there is no point to disrupt business just for something that may come and go.
TT: How are your operations in Hong Kong coping with the unrest and do you agree with some analysts that Hong Kong could lose its position as Asia’s financial center?
Halford: We are very responsive at what is going on in the city. We have to be more flexible. We want our staff to be safe, and if some branches have to close earlier than usual, we will do that.
Business overall has actually been strong during this period, and in the third quarter, profits rose year-on-year. Lending and deposits also both advanced from a year earlier. One part of our business has been affected, but not all of it.
Only a small number of clients have opened additional accounts in other countries, including Singapore, since the protests. We sincerely hope the tensions settle and that Hong Kong would go back where it was before. It is a vibrant financial center.
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