Battle for young customers heats up in HSBC's Asia stronghold
By Lawrence White and Daria Hsu
HONG KONG (Reuters) - Banks in Hong Kong are intensifying the battle for young customers key to their future retail profit, offering online perks and mobile banking products in a bid to erode the dominance of HSBC (HSBA.L: Quote) in its Asian stronghold.
Like peers around the world, banks operating in Hong Kong including Bank of China Ltd (601988.SS: Quote) (3988.HK: Quote) and Citigroup Inc (C.N: Quote) are trying to improve their online banking products to lure tech-savvy students and young professionals as they are about to open their first bank account.
For HSBC the battle to win the hearts of young Hong Kongers is particularly important as retail banking activity in the Asian financial center helped drive its overall profit up 2 percent in the first half of this year.
The London-based bank, which has put China at the center of its global strategy, is also in the process of deciding whether to move its global headquarters to Hong Kong. (0005.HK: Quote)
A survey of 2,500 people conducted in November by specialized research firm RFI, gave Bank of China a bigger market share among bank customers aged 18-24 than HSBC, which dominates in all other categories.
These customers loathe spending time at bank branches and seek a lender that can allow them to carry out multiple transactions from their smartphone.
"I would rate both the online and mobile services offered by Bank of China as good as they allow me to pay my parking tickets instantly, and this is very important to me," said Chun Hoi Lau, a 23-year-old student at the University of Hong Kong.
Bank of China, which says the young generation is a key customer segment, allows clients to carry out cross-border payments through an app, uses the popular WeChat social media platform to handle customers' queries and has introduced a popular virtual securities investment contest for students. Continued...