An even bigger increase was noted in long term insurance policies sold through digital channels by retail banks, which more than doubled in the first half of this year when compared with the second half of 2019. 8. Some may argue that the rising trend in the use of non-F2F channels for distributing banking services would have continued with or without Covid. But we could not deny the fact that the pandemic has injected a strong catalyst into this trend. So while we all embrace technology, and very much enjoy the convenience brought about by that, also we must not lose sight of the additional conduct risks involved. We have seen complaints, for example, that sales staff might have deliberately conducted investment transactions for vulnerable customers through internet banking in order to circumvent controls for safeguarding the interests of those customers. 9. There are indeed issues that warrant our attention to ensure that a customer-friendly online journey will not compromise adequate customer protection. For example, on the use of technology such as video conferencing for distributing long term insurance products, the Insurance Authority has provided guidance on measures to address challenges, such as difficulties in obtaining wet signature from customers for the insurance policies, as well as the potential intermittent interruption during the sales process which do not exist in a physical F2F environment.
The HKMA is also working hard at the moment to provide the industry with further guidance and practical examples to address difficulties of banks on issues such as how to identify vulnerable customers in an online environment so that the bank can accord them with extra care during the sales process. 10. Despite all these efforts in offering more detailed guidance to the industry, I’m sure you would agree that having such additional guidance alone cannot achieve the desired outcome. We do very much need the support of a sound bank culture, because culture is the invisible glue that holds a bank together. In fact, if one really thinks through the implications of the latest trends, culture does not become less important in the current environment. Quite the opposite, culture has actually assumed an even more critical role in times of pandemic. And for that reason, we should remind ourselves repeatedly of the need to keep up the momentum in promoting sound bank culture in order to counter the additional risks brought about by the pandemic. Our continued effort in the cultural landscape 11. So probably it will be useful if we quickly revisit what a “sound” culture should look like and what the core elements are? At the HKMA, we always emphasise that there is no one single formulation of “sound” culture. And each bank needs to map out its own path according to its desired culture, values and behavioral standards.