Hongkongers optimistic about BaaS: study

42% said that their organisation have been deploying banking-as-a-service (BaaS) in the last 12 months.

Hongkongers are some of the most optimistic regarding banking-as-a-service (Baas), with around nine in 10 expecting to see positive impacts and 89% expecting embedded banking in the next 12 months, according to a Finastra study.

Two-fifths (42%) of those surveyed at Hong Kong financial institutions also said that their organisation has been deploying or improving BaaS in the last 12 months, second only to Singapore (47%). In addition, Hong Kong topped in embedded banking deployment and improvement (44%).

Open Banking has also become important to 97% of the businesses in the city, with 58% calling it a “must have”. Respondents said that open banking has provided a number of benefits, such as improving the customer experience (55%), delivering new services (73%) and improving internal systems (64%). 

As well as helping to attract new customers (73%), those who responded to the survey in Hong Kong also said open banking has helped to attract different types of customers (64%). 

Almost eight in ten (78%) of those surveyed in Hong Kong said that COVID-19 had accelerated the integration of new technology and innovation, the report said, which translated into higher overall investment and budgets in response to the pandemic for three quarters (74%) of respondents. Adapting to the challenges brought by the pandemic was the second biggest driver of the adoption of technology (49%), just behind cost cutting and efficiency (53%).

However, barriers to adoption still persist, with 54% indicating that the high costs of research and development as main hindrance, followed by 51% saying that decision-makers are still stuck in old ways of thinking, and 43% saying regulations are too tight.