Hong Kong banks must deliver a needs-based selling approach to build customer loyalty
Banks’ core retail deposit generation ability at branch level linked with strength of franchise and customer trust. May 07, 2013 | ResearchAs part of The Asian Banker’s Excellence in Retail Financial Services Programme 2013, we selected several banks in the Hong Kong market to test their ability to generate core retail deposits. We believe that the ability to do so is closely linked to the health of a bank’s franchise, regardless of the volume and depth of extension of a bank’s distribution network. Wealth management centres generally contribute 40%–50% to the overall full service branch network, thus the deposit business is linked also to the strength of its wealth management business. To be a high achiever in Hong Kong, banks must realign their organisations to meet the needs of their customers, in order to build wallet share and loyalty. They would also need to deliver a needs-based selling approach to build trust. HSBC outperforms peers in core retail deposit generation Figure 1. Total core retail deposit generation of the top four banks in Hong Kong 2009–2012 We tested four key aspects in the strength of the deposit franchise in Bank of East Asia (BEA), Hang Seng Bank, Bank of China (BoC) and HSBC. These include deposit gains over a period of four years, growth in number of full service branches, deposit gains and deposit size relative to the bank’s branch network, total deposit load and growth rates in the last four years. The strongest deposit franchises in Hong Kong belong to HSBC and Hang Seng Bank. While BEA has a comparable branch size to its peers (except BoC), it generated the lowest deposit gains per branch in 2012 and also has the lowest retail deposit load per branch. In fact, BEA’s recovery of its franchise lags behind its peers and may be related to the fact that the bank never really recovered from the loss of trust of its customers in the brand since the Lehman Brother crisis and mis-selling incidences. ...
Categories: Deposits and Liabilities,HK,retail,Wealth Management, Deposits and Liabilities,Hong Kong,Retail Banking,Wealth Management, Keywords:BEA, Hang Seng Bank, BoC, HSBC
BEA, Hang Seng Bank, BoC, HSBC
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