In 2018, we saw continued investments into digital transformation. Hong Kong’s premier bank, HSBC, invested US$2.3 billion in digital platforms, AI and new technology to reach tech-savvy customers.

Between 2015 and 2017, the bank created new platforms and partnered with technology companies such as Tencent’s popular messaging application WeChat to serve its clients.

This whirlwind of developments will continue to gain speed in Hong Kong and the region. I believe we will see banks take digital transformation another step further. With a report from J.D. Power stating more than 57% of customers in Hong Kong are ready to embrace virtual banking, digital must be viewed as more than just an app or website — it will be the foundation for an entirely new way of engaging banking customers. I believe these three trends will shape banks’ digital transformations in 2019:

1. Customers — not products — will be at the centre of banks’ business processes

Banks embracing digital transformation will recognize that customer-centric business processes are critical for success. This goes beyond just technology to encompass team incentives, talent, and trust.

For example, banks will begin thinking about growth through the lens of customer journeys rather than product sales. This will involve a balance of automation and empathetic human experiences — journeys may begin in a self-service digital channel but end with an in-person interaction featuring a banker or advisor in the branch.

Connecting these digital and physical touchpoints is key for a seamless experience, and employees need to be empowered with the right skills and tools to help customers progress on their financial life journeys regardless of channel. This also applies to virtual banks as they are required to have physical offices in Hong Kong for dealing with the HKMA and customer questions or complaints.

Regulations such as GDPR will require transparency into how banks and partners leverage customer data. Ongoing controversies around how Facebook and others shared customer data with partners will only heighten the importance of data privacy in 2019. But banks should continue to have ample data at their disposal to power holistic banking experiences.

The “2017 Accenture Financial Services Global Distribution & Marketing Consumer Study: Banking Report” found that 67% of customers are willing to give more personal data if it means more tailored service or advice. This will provide opportunities for banks to optimize the customer experience and deliver fully personalized banking through AI.

2. Ecosystems will be the key to holistic financial experiences  

Banks recognize they cannot provide holistic financial experiences on their own. They need to cultivate an ecosystem of partners to be present throughout customers' lives at each moment of financial need. The evolving role of financial technology firms (fintechs) in financial services is a great example of this trend, and it was on prominent display when Salesforce participated in the 2018 Singapore FinTech Festival.

The 2018 Singapore FinTech Festival was a fascinating transformation: banks were exhibiting their own open platforms, illustrating how they have moved from competing against fintechs to actively nurturing fintech ecosystems.

The future was clearly on display — regulators, financial institutions, and fintechs all working together. BBVA is a great example with their Open Platform and Open Talent initiatives, and Barclays is also fostering fintech innovation with their RISE accelerator.

3. Banks will partner with the broader consumer services ecosystem T

The trend toward ecosystems will only become more pronounced as banks go beyond fintech and begin to partner with industries such as healthcare, insurance, and retail. This is already happening through partnerships such as the joint healthcare initiative that JP Morgan Chase, Amazon, and Berkshire Hathaway announced last year.

For an idea of what this will look like, we can turn to China where companies such as WeChat and Ping An are transcending traditional industry boundaries through a combination of in-house innovation and partnerships.

For example, WeChat began as a mobile messaging platform and has since evolved into a leading financial services provider offering peer-to-peer payments, financial advice, and even insurance products. Among the other things you can do with the app: schedule doctor appointments, pay traffic fines, and book transportation. WeChat now has 1 billion monthly active users, 60% of whom open the app more than 10 times a day.

Ping An is another remarkable example of industry convergence. China's largest insurer with US$94 billion in premium revenue, Ping An also has a fintech incubation arm that has spawned companies such as Ping An Good Doctor and Ping An Healthcare and Technology.

The former is a healthcare portal with over 30 million monthly active users, and the latter is a mobile app for booking hospital visits used by 800 million customers across 70% of cities in China, according to Forbes. I believe banks will make it their resolution in the new year to connect with every customer on a human level, rather than on the basis of a particular product, process, or channel. Regardless of digital maturity, banking leaders will work towards this goal by cultivating the right skills and establishing the right structure and incentives for their teams while making smart technology investments.  

The banks that are further along in their digital transformation will continue to expand and cultivate ecosystems that encompass fintech innovators and partners from other industries. All the while, trust, transparency, and data security will remain paramount.

By Rohit Mahna, SVP and general manager Salesforce