Bad Timing for New Campaigns
Secondly, timing is also favorable for banks due to marketing-related reasons.
Excluding Hong Kong’s ongoing social unrest, virtual banking was set for a major boost as capital, government support and looming secular trends all favored the fintech outlook. But the pandemic will likely set back efforts as freshly established firms will find it harder to reach new homebound users.
Simultaneously, increased usage of already established platforms continues, creating an opportunity for piggybacking. Citi, for example, recently partnered with major Hong Kong e-shopping platform HKTVmall to provide API-based credit card services after online orders doubled in the first quarter. Also, limited brand recognition and perceived competition risk make it unlikely for online-only banks to sign many similar deals with established e-commerce platforms.
Foot in the Door?
Elsewhere, banks are doing more than enhancing credit flows and brand recognition. As fintechs are entering into traditional financial services, some banks are currently making an entrance into the former’s stomping grounds.
DBS, for example, launched its own online food delivery platform as a part of a recently announced «digital relief package». In addition to lower costs and faster time-to-market, the platform which is built by homegrown tech startups hopes to provide much needed additional cash flow to the bank’s F&B SME client base.
In the last decade, global tech giants gradually convinced its e-consumer base that it had financial services competencies. Perhaps the current environment could also create an opportunity for global financial giants to convince its banking client base of their technological competencies.
