Hong Kong Retail Banking Market to 2025 - Analyzing Mortgage, Deposit, Lending Market Trends, and Digital & Alternative Channel Preferences

1.1 Positive CAGR growth is expected across all product areas, although consumer credit growth is slowing
1.2 The preference for services from incumbents has decreased, and Hong Kong banks needs to deliver competitive prices

3.1 Residential mortgages
3.2 Retail deposits
3.3 Credit cards
3.4 Personal loans

4.1 GDP and unemployment

5.1 Retail deposits
5.2 Residential mortgages
5.3 Credit cards
5.4 Personal loans
5.5 COVID-19 has increased costs for leading incumbents in Hong Kong and across the region

6.1 Preferences are beginning to shift away from incumbents towards digital wallet providers
6.2 Banks in Hong Kong have prioritized the attributes of service that customers rank as most important
6.3 Banks need to prioritize perfecting the basic user experience
6.4 Banks in Hong Kong can increase revenues by offering digital mortgage applications
6.5 Cross-selling is correlated with high rates of customer satisfaction and tenures of five years and above
6.6 The longer the tenure, the better the opportunity to cross-sell products

7.1 Mox Bank
7.2 ZA Bank
7.3 Airstar Bank

8.1 Abbreviations and acronyms
8.2 Methodology
8.3 Further reading
About The Publisher
Contact The Publisher

Figure 1: Residential mortgage and retail deposit balances have increased year on year since 2010
Figure 2: Consumer credit balances have grown at varying rates since 2010, with personal loan growth far exceeding that of credit card balances
Figure 3: Hong Kong product growth over 2021-25 will generally be stronger than other Asia Pacific markets, with the exception of China
Figure 4: Growth rates are set to increase in 2021 as vaccination programs allow for reopening and recovery
Figure 5: Wage growth has been experiencing a downward trend in Hong Kong since 2013, in line with inflation
Figure 6: With the exception of Standard Chartered, quarterly deposits market shares show minimal change over the review period
Figure 7: Mortgage market shares are forecast to increase post-pandemic as consumer sentiment rebounds
Figure 8: Incumbents’ market shares have declined in the credit card space
Figure 9: Personal loans market share has generally decreased for incumbents over the review period
Figure 10: Cost/income ratios for Hong Kong banks have generally increased since 2015
Figure 11: Preference for digital-only banks and digital wallets has grown in Hong Kong over 2020-21
Figure 12: A decline in preference for traditional providers has been seen across markets in Asia Pacific
Figure 13: The preference for transaction/savings accounts from incumbents has declined across all age groups
Figure 14: A history of good service, better overall levels of service, and distrust of alternative providers are the key reasons for choosing traditional providers
Figure 15: Better rates and rewards is the top reason for preferring alternative providers across all age groups
Figure 16: Better rates and rewards are a major driver among individuals who prefer digital banks, digital wallet providers, and big tech companies
Figure 17: On average, having their card details stolen online is the main way customers expect to be a victim of fraud
Figure 18: Satisfaction scores show that banks in Hong Kong have prioritized the attributes that matter most to customers
Figure 19: Customers who never use branch services and those who use services on a daily/weekly basis value improvements related to an omnichannel experience
Figure 20: When applying for a mortgage, preference for branch services is significantly higher than any other channel across Asia Pacific
Figure 21: 69% of 18-24 year olds in Hong Kong have been with their main banking provider less than five years, suggesting those who hold accounts as children tend to switch more than in comparable markets
Figure 22: A tenure of five years and above is when customers are most receptive to cross-selling
Figure 23: Higher rates of cross-selling are correlated with higher rates of satisfaction across all attributes