With customers’ consent, banks can have direct, efficient access to a substantial body of data. That will enable them to offer the most suitable services to customers, or perform more precise and objective credit assessments. And that, in turn, will help banks address the pain points I mentioned. 27. Let me give you an example of what CDI could deliver. A family-run noodle shop which has problems getting bank credit can now choose to allow its bank to access historical turnover data from its point of sale terminals. With access to this data, and by using AI tools, the bank should be able to make an accurate forecast for the noodle shop’s sales. That means it can make a credit decision without having to first ask the owner for loan collateral. Hopefully, the noodle shop is successful and its sales rise above the projections in the bank’s model. Then its credit limit can automatically be increased by an appropriate amount. 28. Small importers and exporters might also benefit. Through CDI, they could authorise trade servicing platforms to allow their banks to access reliable trading data. This should help banks understand their customers’ trade counterparties, which can reduce money laundering risk. Because of this, the trading companies’ access to financing should improve, and their cost of borrowing should fall. 29. With CDI, our aim is to enable bank customers, particularly SMEs, to take more control of their own digital footprint, so that they can use their data to enhance their access to financial services. 30.
But you can’t have a meal without food — and you can’t have banking without service, trust, and capital. 6. Yes, technology is replacing some traditional banking channels and processes. But that actually enhances those core principles. So, I don’t think technology will replace banks. Rather, I’ll be making the case today that technology will make banks better — whether it is delivered by an established bank or a new market entrant. A new era established 7. In 2017, the HKMA launched seven initiatives to begin a new era of smart banking. Since then, the competitive landscape for banking in Hong Kong has changed quite a lot. We are proud to be one of the first markets in the region to have fully digital banks — or virtual banks. As we speak, our city has one of the highest numbers of virtual banks in Asia. 8. Today, customers can choose from a wider range of banking providers and platforms. They can choose digital or physical, niche or universal. 9. Not surprisingly, competition is bringing down costs and improving customer experience. For example, traditional banks have been phasing out fees for maintaining low account balances. Many are proactively improving their digital platforms to improve the user experience. 10. We owe this progress to the innovators, entrepreneurs, and bankers in today’s audience. It has been driven by your hard work and determination. 11. As a regulator, we help to facilitate this progress. We ensure a level playing field for all types of financial institutions.