Chinese finance giant HSBC invested further in digital banking and fintech during the first six months of this year. The bank also insisted that it doesn't need a digital banking license to pursue its targets.
According to the South China Morning Post, HSBC's move of ramping up investments in financial technology (fintech) was brought about largely by the rise of startup virtual banks in Hong Kong as well as competing for online payments service providers in the country.
As of the first half of 2019, the lending giant already poured in $2.2 billion on enhancing its digital banking processes. The amount accounted for a 17 percent increase compared to its fintech investments in 2018.
Regarding talks on whether or not HSBC will apply for a digital banking license, the bank stood firm on its stance that it doesn't need do so since it can provide the same services that virtual banks offer.
Head of digital banking for HSBC's Hong Kong office, Andrew Eldon, noted that the lender does not believe a virtual license is necessary to kick off operations related to digital services or payments.
So far, the bank has 1,600 robotic devices in different branches both in China and other countries. Last year, these robotic devices completed 11.5 million transactions, marking another milestone in the Chinese lender's fin-tech applications.
Artificial intelligence is another segment that HSBC has been adopting. In the Hong Kong area, credit card approvals are now approved almost instantly, compared to the six days required when human staffers work on the approval process.
While HSBC and other banks around the world are largely leaning on digital banking and fintech applications, professional services firm Accenture said in a recent report that around 15 percent of the global payments revenue of banks will be displaced due to the rise of technology in banking.
Last month, Wells Fargo predicted that around 200,000 human jobs will be displaced in the global banking industry within the next decade. At that time, the bank noted that more and more banks are spending on digital services and automation.
The trend in the Chinese financial sector as well as the global the industry could be a thorn in the neck of job seekers in the near future unless humans upgrade their skills accordingly. "You're about to see the the biggest capital for labor swap in history," Wells Fargo analyst Mike Mayo forecasted.
Joining the global digital banking competition that HSBC has just started to infiltrate is RBS (Royal Bank of Scotland) as more people shift to online transactions, Reuters reported. RBS revealed last week that it is finishing the new digital bank called Bo.
Industry analysts are expecting more banks to adopt virtual banking processes and more fintech applications in the coming years.
