HSBC is moving ahead with its strategy to digitize its business, particularly for its customers in China. The company announced on Monday that it has launched a new digital account opening system for business accounts in Hong Kong, which it claims is the city's first. The system will be made available to small and medium-sized businesses (SMEs) and is a follow up to the launch of its account opening system for individual customers.
The move is meant to bolster the bank's ability to compete with the growing number of virtual banks that are already operating or are planning to operate within the city this year. Under the new system, SMEs will be able to open a business account without having to personally visit the bank's branch. After going through an online verification process using HSBC's mobile app, businesses will be able to immediately obtain their account numbers. Accounts are then activated within three to five business days.
HSBC utilized several new technologies to accelerate the verification process, including the use of facial recognition software to verify a person's identity using their submitted documents. The authentication process also uses a mixture of machine learning and artificial intelligence technologies to speed things up.
In 2018, HSBC had implemented a "selfie" verification process for its commercial banking process. The technology was a bit rough around the edges and the bank still required customers to personally visit its branches in order to sign contracts and submit necessary documents.
The bank's head of business banking in Hong Kong, Daniel Chan, stated in a press release that its new seamless account opening solution should provide SMEs and startups increased convenience and accessibility to its slew of banking services. He added that the addition of the feature underscores the bank's commitment to supporting China's digital innovation in its banking sector.
For now, the feature will be only available to companies based in Hong Kong that has been in business for less than three years. According to HSBC, these types of companies make up about 80 percent of new business accounts opened each month. HSBC eventually plans to expand the services to mainland China and other markets in the coming months.
When the Hong Kong Monetary Authority (HKMA) had granted virtual banking licenses last year, HSBC was one of the major banks that declined to apply. During that time, the bank reasoned that its existing digital banking operations were already sufficient to compete with any newcomer, including fully digital banks.
