【True Burn Finance】Bankers Association Survey: Dual Growth in Digital Banking Usage and Public Trust, Over 97% of the Public Satisfied with Security Measures. Awareness of Digital Banks Increased Significantly to 80%.

Digital banking services cover a wider range of applications, with 20% of individual respondents using digital banks as payroll accounts. Public willingness to open accounts is high, and the rebranding and increase in deposit insurance continue to strengthen customer confidence.

Hong Kong, October 22, 2024 – Since their launch in Hong Kong over four years ago, digital banks have gradually gained public trust and recognition. The latest survey by the Digital Banking Public Education Task Force ("Task Force") of the Hong Kong Association of Banks ("HKAB") shows that both individual and SME respondents have significantly increased their trust in digital banks, with over 97% of individual respondents and 99% of SME respondents satisfied with the security measures. Public awareness of digital banks has also significantly improved, with over 80% of individual respondents and 92% of SME respondents stating they have a certain level of understanding of digital banks, and their usage is no longer limited to basic services like deposits. The Task Force believes that the collaborative efforts of digital banks to enhance public awareness of fintech and service standards in Hong Kong have helped boost public confidence. Recent initiatives, such as the rebranding of virtual banks as digital banks and the increase in deposit insurance coverage to HKD 800,000, will further accelerate the adoption of digital banks. The Task Force commissioned the School of Communication at Hong Kong Baptist University to conduct an online survey from July 31 to August 8, 2024, interviewing approximately 1,000 individual respondents and 200 SMEs to understand public perceptions, impressions, and usage habits of digital banks.

Overall trust remains high, with security measures widely recognized. Both individual and SME respondents expressed high satisfaction with the security and anti-fraud measures of digital banks. Approximately 97% of individual respondents believe that the security measures implemented by digital banks provide sufficient and effective protection, while the figure for SMEs exceeds 99%. Over 90% of individual and SME respondents are satisfied with digital banks' measures to protect personal data and prevent fraud.

A spokesperson for the HKAB Digital Banking Public Education Task Force stated: "The digital banking industry has been relentless in providing new customer experiences, promoting financial inclusion, and driving fintech innovation. The survey results show that, thanks to the joint efforts of regulators and the industry, public confidence in digital banks has significantly increased, serving as a strong boost for the sector. Like traditional banks, digital banks are strictly regulated by the Hong Kong Monetary Authority (HKMA), and customers are equally covered by the deposit protection scheme, which increased to HKD 800,000 in October. At the same time, digital banks have been committed to maintaining high levels of information security, including advanced encryption technologies and 24/7 real-time monitoring. Through continuous public education, enhanced customer experiences, and the recent rebranding of virtual banks as digital banks, public perception of digital banks will further improve, laying a solid foundation for the industry's future development."

High willingness among individuals and SMEs to open accounts, with potential for broader age demographics. According to HKMA data, the number of digital bank depositors continued to rise to 2.2 million by the end of last year. The survey results indicate that the adoption of digital banks is expected to grow further. Nearly 75% of individual respondents expressed willingness or strong willingness to open new accounts with other digital banks, and among those who already hold digital bank accounts, the figure exceeds 90%. For SMEs, close to 93% of respondents are willing or very willing to open new accounts with other digital banks, and among SME respondents with existing digital bank accounts, the proportion reaches as high as 99%.

Public understanding of digital banks continues to deepen, with 80.3% of individual respondents and 92.1% of SME respondents stating they have a considerable understanding of digital banks, representing year-on-year increases of 27.3 and 9.1 percentage points, respectively. Most individual and SME respondents noted that digital banks offer cost-effective products and services along with attractive promotions.

The survey reveals that digital banks are not only attracting younger generations but also gaining traction among older demographics, indicating potential to appeal to a broader age range. Among individual respondents, 65.7% of those aged 26-35 hold digital bank accounts, the highest proportion across age groups, while 44.6% of those aged 55 and above also hold accounts. Among SMEs, 81.3% of respondents aged 36-45 have digital bank accounts, and the figure for those aged 55 and above is 66.3%.

Comprehensive Use of Digital Banking Services Strengthens Customer Base

This year's survey identified 13 services adopted by at least 20% of individual respondents, a significant increase from five services in the previous year. In addition to primarily using basic services like deposits/savings, credit cards, and fixed deposits, individual users are increasingly purchasing insurance products and investing in funds through digital banks. The proportion of users utilizing digital banks as payroll accounts has risen to around 20%, demonstrating that digital banks are successfully deepening customer relationships.

Among SME respondents, the usage of 11 functions has significantly increased, with 14 functions adopted by over 20% of respondents. The most commonly used functions include savings/deposits, fixed deposits, and payroll accounts. Notably, the number of SMEs using digital banks for invoice financing, business installment loans, and global remittances has increased significantly compared to last year, with adoption rates of approximately 30-40%. This trend highlights the growing popularity of digital banks among SMEs, becoming a primary tool for managing business operations and conducting daily banking services.

The spokesperson for the HKAB Digital Banking Public Education Task Force commented: "The survey shows that the financial behavior patterns of the public and SMEs are gradually changing, with digital banking services further integrating into their daily lives. At the same time, digital banks are offering increasingly diverse services. We believe that digital banks will continue to deepen customer relationships and seize more cross-selling opportunities, further enhancing customer loyalty and benefiting the business performance of digital banks. We share the views of 80% of individual respondents and 90% of SME respondents in the survey: as public understanding and acceptance of digital banks continue to grow, digital banks will become even more widespread."

Digital Banks Drive Web3.0 Development

Digital banks continue to promote fintech and innovation. Regarding Web3.0 development, many respondents believe that digital banks can contribute to Hong Kong's Web3.0 ecosystem by offering more diversified banking services to Web3.0 enterprises and launching Web3.0-related products. Most surveyed Web3.0-related companies also agree that digital bank services help improve efficiency, reduce costs, and facilitate account opening.

1. The survey was conducted from July 31 to August 8, 2024, via online questionnaires, interviewing approximately 1,005 individual respondents and 202 SMEs. Web3.0-related companies accounted for 67.3% of SME respondents.

2. Hong Kong Monetary Authority, "Virtual Banks Review Report" (August 6, 2024)