1、As digital adoption increases,traditional and virtual banks in Hong Kong race to deliver compelling value propositions.By Frankie Leung,Herbert Lee,and Lei Zhang How to delight digital banking customers in Hong Kong Copyright 2022 Bain&Company,Inc.All rights reserved.This work is based on secondary

2、market research,analysis of financial information available or provided to Bain&Company and a range of interviews with industry participants.Bain&Company has not independently verified any such information provided or available to Bain and makes no representation or warranty,express or implied,that

3、such information is accurate or complete.Projected market and financial information,analyses and conclusions contained herein are based on the information described above and on Bain&Companys judgment,and should not be construed as definitive forecasts or guarantees of future performance or results.

4、The information and analysis herein does not constitute advice of any kind,is not intended to be used for investment purposes,and neither Bain&Company nor any of its subsidiaries or their respective officers,directors,shareholders,employees or agents accept any responsibility or liability with respe

5、ct to the use of or reliance on any information or analysis contained in this document.This work is copyright Bain&Company and may not be published,transmitted,broadcast,copied,reproduced or reprinted in whole or in part without the explicit written permission of Bain&Company.Net Promoter,NPS,NPS Pr

6、ism,and the NPS-related emoticons are registered trademarks and Net Promoter ScoreSM,NPSxSM,and Net Promoter SystemSM are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred Reichheld.Authors and acknowledgmentsFrankie Leung is a partner with Bain&Companys Financial Services practice in Ho

7、ng Kong.You can contact him at .Herbert Lee is a partner with Bain&Companys Financial Services practice in Hong Kong.You can contact him at .Lei Zhang is a senior manager with Bain&Companys Financial Services practice in Beijing.You can contact him at .The authors highly appreciate the guidance and

8、input from Bain&Companys experts,such as senior partners Henrik Naujoks,Philip Leung,and Harshveer Singh;partners Scully Cui,Priscilla DellOrto,and Bao-Viet Le;expert partner Jeff Tijssen;and expert associate partner Ryan Garner.Consultants on this case included Tiger Zuo,Ray Ren,and Calvin Chen.In

9、addition,we are grateful for Sophia Xin,Shawn Chen,and Claudia Jiang for their advanced analytics work,and to Pinky He and our colleagues in Market Reputation.How to delight digital banking customers in Hong Kong1At a Glance Mobile banking penetration reached 80%in Hong Kong.Mobile is the most impor

10、tant channel for driving Net Promoter ScoreSM;however,branches have a higher likelihood to delight customers.Hong Kong consumers value smoothness,clarity,and privacy in their mobile banking apps,while mainland customers want“super app”functionality.We identified four key themes surrounding customer

11、experience in digital retail banking.Customers want mobile-centricity,digital wealth management services,rewards,and compelling offers.As retail banking evolves,traditional banks must become more customer centric.Virtual banks need to focus on experience-driven,profitable growth at scale.The retail

12、banking market in Hong KongBy nearly every metric,digital banking adoption has soared in Hong Kong since the Covid-19 pandemic.The volume of Fast Payment System transactions almost tripled from 2019 to 2021,according to the Hong Kong Monetary Authority.Over an 18-month period from 2019 to the first

13、half of 2021,the percentage of personal banking accounts opened via digital channels and the percentage of credit card applications completed online nearly doubled.Consumers shifted their banking behaviors out of necessity but are staying with digital channels for the experience.That means online an

14、d mobile banking arent secondary channels or value-added services;they are the bank for an increasing number of Hong Kong consumers.Digital channelsand an impeccable digital experiencemust attract,retain,and earn new customers.To learn more about digital banking experiences and preferences,Bain&Comp

15、any surveyed 1,400 retail banking consumers in Hong Kong in September 2022.We used the proprietary Net Promoter SystemSM to measure customers experiences with traditional and virtual retail banks.Customers reported on multiple facets of experience,such as relationship(rNPS),channel(cNPS),product(pNP

16、S),and episode.As part of the analysis,we classified respondents as brand“promoters”or“detractors.”Companies that earn high NPS scores deliver great experiences,according to their customers,and that translates into quantifiable benefits.In this research,on average,promoters purchase 20%more product

17、categories from their primary financial institution than detractors.Promoters are also more loyal customers(see Figure 1).How to delight digital banking customers in Hong Kong2Our study covered seven major retail banks in Hong Kong.The average rNPS was 19,although there was a 17 percentage-point spr

18、ead between the highest-and lowest-scoring institutions.The delta between the highest-and lowest-scoring institutions was even wider for other dimensions of NPS,such as channel(cNPS)and product(pNPS).Those gaps are opportunities.Customer experience is paramount in and across every channel,especially

19、 as physical and digital channels blend.By focusing on customer experience,banks can create more economic value via higher lifetime customer values and lower customer acquisition costs.What makes a digital retail banking experience delightful?Our research identified four key themes surrounding custo

20、mer experience in digital retail banking.Customers want mobile-centricity,digital wealth management,rewards,and compelling value propositions.1.Customers want mobile-centricity and connected branch experiences Over the past 12 months,mobile banking apps and online banking were the most-used channels

21、,across different age groups and asset levels.Mobile banking penetration reached nearly 80%,while less than half of consumers stepped into a branch in the past year.On average,customers interacted with their bank via mobile slightly more than once per week.Customers with more investable assets used

22、digital channels more frequently than the mass market.Note:*Industry weighted average calculated using relationship NPS score and sample size of each selective bank(including 7 major retail banks in Hong Kong)from Bain Retail Banking NPS Survey.Only sample from banks in which respondents have the mo

23、st assets or that they use most frequently for each respectiveproduct counted as valid;Net Promoter,NPS,NPS Prism,and the NPS-related emoticons are registered trademarks and Net Promoter ScoreSM,NPSxSM,and Net Promoter SystemSM are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred Reichh

24、eldSources:Bain Retail Banking NPS Survey 2022;Bain analysis Over 1/3 of customers are promotersPercentage of customersLeast products purchasedMost products purchasedLowest likelihood to changeHighest likelihood to changePromoter(910)4.83.53.03.03.52.9Neutral(78)Detractor(06)39%41%20%19%NPSPromoters

25、 buy more from their banksPromoters are less likely to switchIndustry average*PromotersDetractorsPromotersDetractorsQ:How likely are you to recommend yourbank to friends and family on a scale of0 to 10?(N=1,833)Q:Number of products(categories)yourbank currently holds or has purchased in thepast year

26、(N=1,833)Q:Likelihood to turn to another bank forservices in the next year(0 not likely at all,7 extremely likely)(N=1,833)3.52.43.42.74.13.21.2x0.8xFigure 1:Promoters deliver more value to their primary financial institutionsHow to delight digital banking customers in Hong Kong3Mobile banking exper

27、ience had the highest correlation to positive overall customer experience,ahead of online banking and traditional channels.Hong Kong retail banking customers say they value a smooth mobile banking app,transparent terms and conditions,and robust privacy protection(see Figure 2).Extensive app function

28、s and nonfinancial lifestyle features were less important to Hong Kong consumers,despite being attractive to customers in mainland China.Financial institutions that operate in both regions may need separate apps or customized solutions to address unique market preferences.Despite customers only visi

29、ting branches once a month on average,branches have the highest chance of winning over customersor pushing them away.“Customers value human touch when dealing with complex or emotionally charged financial needs,”says Rannie Lee,head of wealth and personal banking at Hang Seng Bank.She says many cust

30、omers still prefer in-person service for assistance with mortgage applications,wealth planning,and large international fund transfers.These so-called moments of truth can delight or disappoint customers and often define their overall relationship with or attitude toward a bank(see Figure 3).At the s

31、ame time,Lee says younger and digitally savvy consumers dont want to wait for counter service to sign paperwork in a branch.Physical locations need to provide on-site digital channels as part of a seamless omnichannel experience.Figure 2:Hong Kong consumers value smoothness,clarity,and privacy in th

32、eir mobile banking apps while mainland customers want“super app”functionalitySmoothnessof mobile banking appTransparencyof terms andconditionsPrivacyprotectionUIdesignIntuitivenessof mobilebanking appNotificationswith attractivecontentExtensivemobileapp functionInfopresentationCommunitycontent Stabi

33、lityof mobileappNonfinanciallifestyleservicesRebateandrewards0 40%30 20 10 Importance indication Mobile app cNPS driver analysis(HK survey N=1,782,mainland survey N=2,005)HK surveyMainland surveyNote:cNPS is channel NPS;UI is user interface;Net Promoter,NPS,NPS Prism,and the NPS-related emoticons ar

34、e registered trademarks and Net Promoter ScoreSM,NPSxSM,and Net Promoter SystemSM are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred ReichheldSources:Bain Digital Banking NPS Survey 2022;Bain analysis How to delight digital banking customers in Hong Kong4Figure 3:Positive branch exper

35、iences can convert customers into promotersLikelihood toannoy(DectractorDriver Impact)Likelihood to delight(Promoter Driver Impact)DETRACTORCREATION DRIVERS“MOMENTOF TRUTH”PROMOTERCREATION DRIVERSROUTINEDRIVERS0%5%10%15%20%25%0%2%4%6%8%10%12%14%Bank reputationService/product personalizationExperienc

36、e with physical branchExperience with mobile appProduct extensivenessService/productbenefits/discountsBank awarenessNote:Relative distribution of different dimensions is generated automatically based on model outcome;Net Promoter,NPS,NPS Prism,and the NPS-related emoticons are registered trademarks

37、and Net Promoter ScoreSM,NPSxSM,and Net Promoter SystemSM are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred ReichheldSources:Bain Retail Banking NPS Survey 2022;Bain analysis Relationship NPS driver impact analysis(N=1,782)In the future,branches must evolve to become engagement-and e

38、xperience-centered.That may mean smaller footprints,but deeper ties to digital channels.2.Digital wealth management is taking offConsumers are adopting digital banking products at different paces.Specifically,payments and consumer finance products have progressed quicker than wealth and insurance pr

39、oducts.However,many customers are ready to click“buy”on digital wealth and insurance products.We asked consumers how they purchased mutual funds and insurance last year.Of those who purchased from a bank,45%of mutual funds and 40%of life insurance policies(by value)were purchased through their banks

40、 mobile app.Major banks and fintechs are already offering digital wealth management services to the market.AQUMON rolled out“robo-advisor as a service”to help financial institutions build customized investment strategies for their clients.“Our sweet spot is serving long tail customers that tradition

41、al human advisory services cannot cover,”says Kelvin Lei,founder and CEO of AQUMON.Digital capabilities such as these allow financial institutions to bring investment advisory solutions to the mass market.Digital tools are integral to the customer journey,but so is human support.And most customer jo

42、urneys cross multiple channels.Even though 75%of respondents completed their mutual fundHow to delight digital banking customers in Hong Kong5customer journey digitally,almost 10%needed human support for part of the process.Moving forward,a digital-human approach is the best model for retail wealth

43、management.The balance of human touch vs.digital will vary by customer segment and phase of the journey(see Figure 4).For example,major banks could offer human-delivered services to their most affluent consumers in any stage of the journey or channel,but use digital self-services or robo-advisory so

44、lutions for the mass market.Under an omnichannel service model,high-touch human services can transition into blended interactions.Financial consultation can start in a branch with a relationship manager,then move to texts or video calls through a secured platform on the banks mobile app,explains Dic

45、k Ho,deputy general manager at Bank of China Hong Kong(BOCHK).At BOCHK,financial consultations can be initiated by video calls through the mobile app or through traditional face-to-face meetings in a branch.More players will launch and expand their digital wealth management services in the coming ye

46、ars,hoping to ride the market boom.Its important for banks to get their strategy and customer experience right.As more customers become comfortable managing their wealth online,the rate of adoption will accelerate.The sector is ready to take off.Figure 4:Wealth management services will blend digital

47、 and human touch,based on segmentNote:HKD is Hong Kong dollar;RM is relationship managerSources:Bain database;Literature research;Bain analysisSegment by investible asset(HKD)1MMassaffluent200K1MEmergingmass affluent200KMassInformation inquiryPlanning&consultationPurchase/transactionMonitoring&rebal

48、ancingCustomer service&problem solvingRM advice in branchRM advice in branchRM advice in branchRM advice in branchRM/assistant call/online chat/videoRM advice viaonline chat/videoRM advice viaonline chat/videoRM advice viaonline chat/videoRM advice viaonline chat/videoPriority contactcenter online c

49、hat/callBranch salescross-sellingBranch sales adviceBranch salesassisted tradeBranch sales adviceContact centeronline chat/callMass disseminationof product info viadigital channelsSelf-service wealthplanning/robo-advisoryProduct purchasing/redemption via digitalchannelsSelf-service/robo-advised moni

50、toringand rebalancingOnline chatbot asthe main channel forcustomer serviceMass disseminationof product info viadigital channelsSelf-service wealthplanning/robo-advisory Product purchasing/redemption via digitalchannelsSelf-service/robo-advised monitoringand rebalancingContact centeronline chat/callO

51、nline chatbot asthe main channel forcustomer serviceTargeted delivery ofproduct info under thename of the RM viadigital channels Offer self-servicewealth planning/robo-advisory toolsOffer self-servicewealth planning/robo-advisory toolsOffer self-servicewealth planning/robo-advisory toolsOnline chatb

52、ot asthe first channel for customer serviceDigital&automatedHuman services via digital channelsHuman in-person servicesHow to delight digital banking customers in Hong Kong63.Benefits and rewards delight customersIn Hong Kong,customers say attractive rewards lead to great experiences.Benefits and di

53、scounts are the top rNPS drivers,ahead of channel experience,product range,and bank reputation.We analyzed how customers ranked nonbanking mobile app features,from news feeds to health trackers and chatbots.Reward features have the highest likelihood to delight customers when offered,or to annoy cus

54、tomers if absent(see Figure 5).Customers appreciate all forms of rewardsvouchers,instant cash back,pointsand find them similarly attractive.Customer service modules like chatbots are expected,must-have functions.But some features,such as health and wellness trackers or user communities,have little e

55、ffect on attracting customers.To drive engagement,ZA Bank combines rewards and gamification on its mobile app.By spending with their ZA card,customers are entitled to rewards,including chances to win HKD$1 million in cash.Customers click on“PowerDraw”in the banks app to claim their offers.“Gamificat

56、ion allows us to continuously enhance user engagement,”says Calvin Ng,ZA Banks alternate chief executive.“It is definitely a win-win.We can understand users behavior while they get to know more about our products.We value every moment to delight our users and deepen the relationship.”Figure 5:Custom

57、ers value rewards and benefits the most among all nonfinancial services features on mobile appsNotes:Attractive features:yield a disproportionate increase in customer delight as you invest in them,key functions are to delight customers;Performance features:give a proportionate increase in customer d

58、elight as you invest in them;Indifferent features:customers wont care about the feature;Must-have features:customers expect these features and take them for grantedSources:Bank official websites;Literature research;Bain analysisSample size Total N=1,151Likelihoodto delightcustomers byits presence Li

59、kelihood to annoy customers by its absenceMobile shoppingLottery or random rewardsOnline chat with humansCollectiblesNews and resources centerCommunityHealth andwellness trackingOnline chat with chatbotPointsRewardvouchersInstant cashbackIndifferentAttractiveMust-havePerformanceRewards moduleCommuni

60、ty moduleLifestyle moduleGamification moduleCustomer service module4.Virtual banks are creating innovative and attractive value propositions Since launching in 2020,eight virtual banks have opened more than 1.5 million new accounts.Thats an impressive number for a city with a population of 7.4 milli

61、on.How did virtual banks attract new customers so quickly?First and foremost,they offered attractive new customer rewards and referral incentives.Those tactics were highly effective because Hong Kong customers value rewards.Virtual banks also offered unique(and often stronger)value propositions and

62、were laser-focused on customer experience.Compared to some traditional banks,virtual banks offer faster loan approvals,lower interest rates,more flexible repayment terms,and easier-to-use platforms for consumer finance products.WeLab Bank Chief Executive Tat Lee thinks personalized advisory services

63、 can help differentiate virtual banks.Although lending is a relatively“plain vanilla product,”he says,virtual banks can provide services that help customers get better financing plans.WeLab Bank uses data intelligence to offer speedy and customized financial solutions.Lending has been a boon for vir

64、tual banks.Loan volume shot up around 380%CAGR from 2020 to 2021.Despite the exponential growth,theres still upside potential.Among all virtual banks in Hong Kong,the total loan book was only HKD$11.2 billion by midyear 2022,compared with an overall consumer finance market of HKD$683 billion.Virtual

65、 banks also outperformed traditional banks in customer experience in specific product areas,according to the NPS ratings.For consumer loans,the average pNPS for the eight virtual banks we studied was 52%,which was significantly higher than the average for traditional banks(20%).To keep the momentum

66、going,virtual banks should continue to create attractive value propositions,expand their product offerings,and build reputable brands.By focusing on customer experience,many virtual banks have established a virtuous cycle to earn businessand the flywheel is taking off.Social and digital marketing,di

67、stinctive branding,compel-ling offers,and competitive pricing draw customers in.Those customers are rewarded with engag-ing and stress-free experiences that plug directly into their lifestyle and other services they use.Then,word of mouth,referrals,and repeat customers help virtual banks grow furthe

68、r(see Figure 6).Offering attractive rewards and incentives gave virtual banks a strong start,but at a high cost.Now,virtual banks are gradually shifting their focus from bought growth to earned growth to achieve critical scale and improve their bottom lines.Right now,most virtual banks products are

69、relatively simple,which reinforces ease of use.To expand and become profitable,virtual banks must explore new products and verticals without complicating the process.To deliver delightful customer experiences,banks should keep mobile app navigation intuitive and“stress free,”even as products and ser

70、vices become more complex.How to delight digital banking customers in Hong Kong7How to delight digital banking customers in Hong Kong8Figure 6:Customer experience is a flywheel for virtual banks to attract,retain,and grow customersNote:UX/UI is user experience and user interfaceSource:Bain analysis

71、Brand and UX/UICompelling product value propositionHighly differentiated UX/UI from traditionalbanks mobile apps with a“stress-free”theme,vivid colors,smooth and intuitive navigation“Aha”momentDigital-only products and experiences that cater to target segments needs Competitive pricing and benefitsC

72、onsistent excellent customer experienceActive user engagement Offer lifestyle services,gamification,andrewards to increase user engagement Embedded services into ecosystems of strategic partners/parent companiesSocial and digital marketingFriend referral program withfinancial incentives Digital mark

73、eting focusing on target segmentsCustomer-centric mobile bankingVirtual banks need accurate customer insights and ways to evaluate new product launches.Livi tests concepts and ideas with a group of 200 targeted customers(Livi Circle)before launching any new products,according to Carol Hung,Livis alt

74、ernate chief executive and chief product officer.“After launch,we closely monitor every step of the customer journey so we can collect feedback and improve,”she says.Livi also closely tracks customer sentiment through NPS surveys and competitive benchmarking.Embedding finance into everyday lifeTo be

75、 delightful,banking experiences need to be seamless for users.Virtual banks may need eco-system partners(or parent companies)to help them embed banking services into other platforms that customers regularly use.Ant Bank(Hong Kong)leveraged a partnership with mobile wallet provider AlipayHK to create

76、 a mini-app inside the digital payments platform.It allows users to open a high-yield savings account and make payments to local merchants through the e-wallet.Customers can also link their savings accounts to the AlipayHK platform for online and offline payments.“The experience is convenient and se

77、amless,so we dont need to spend much effort pushing customers to use our services,”says Yvonne Leung,chief executive of Ant Bank.Connecting into other platforms is also a priority for Fusion Bank,according to Chief Technology Officer Flying Wu.Fusion Bank embedded its services into different payment

78、 scenarios and gained access to merchants through its parent company,Tencent.Traditional banks are also active in embedded finance.“Embedding non-financial or partner services into the banking experience must add value for customers.It needs to make sense and complement their existing lifestyle,”say

79、s Kim Lay,head of digital banking at Hang Seng Bank.For example,part-nering with a dining platform could make it easier for credit card customers to manage reservations,rewards,and payments through a seamless process.Key actions for traditional banksVirtual banks changed the dynamics of retail banki

80、ng in Hong Kong and,to some extent,redefined how financial institutions deliver value.Both traditional and virtual banks must focus relentlessly on customers and pursue the best value propositions possible.How they deliver valuethe customer experiencewill set them apart.Traditional banks have long-s

81、tanding relationships and deep customer knowledge to their advantage,but they face more organizational,system,and capability challenges as they transform into customer-centric players.There are three stages of development that traditional banks can follow to improve customer experience(see Figure 7)

82、.The starting point may vary based on how sophisticated and customer-centric a bank is today.Stage 1:Develop segment-based customer insights and propositionsIn this phase,banks need to build core capabilities in customer insights and analytics to understand their position in the market.Examine the b

83、anks culture,strategy,and performance benchmarks to identify gaps and opportunities.Use all available data to establish your position,ideal customer segments,and segment-led value propositions.From there,digital channels and the ecosystem needed to deliver value will come into focus.Research and ana

84、lysis are not“one and done”events.Use measures such as NPS to continually collect feedback and adapt the customer experience strategy.Stage 2:Create a seamless customer journey Next,apply customer insights to create seamless,omnichannel customer journeys.Start with products or performance areas with

85、 the highest potential to affect NPS scores,such as mobile wealth management.Create a customer experience roadmap to identify priority use cases,then determine how and when to scale technologies.Remember,technology isnt supposed to digitize the traditional banking process.Rather,its intended to enha

86、nce the experience and value for customers.Continuous feedback loops and sentiment mon-itoring can keep development efforts on the right track.How to delight digital banking customers in Hong Kong9How to delight digital banking customers in Hong Kong10Figure 7:Banks can become more customer-centric

87、in three stagesNote:Net Promoter,NPS,NPS Prism,and the NPS-related emoticons are registered trademarks and Net Promoter ScoreSM,NPSxSM,and Net Promoter SystemSM are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred ReichheldSource:Bain analysis Delightful Digital-Human Personalized Engag

88、ementSeamless Customer Journey ExperiencesCustomer Insights&Segmentation Customer insights and analytics Customer segmentation Segment-led value proposition and offerings Digital channel and ecosystem NPS and feedback loop Customer journey and experience redesign,leveraging analytics and technology

89、Seamless omnichannel experience Digital marketing Customer value optimization Digital ops Agile Real-time data and analytics at individual level Connected customer/personalization at scale Innovation and design Experience-led operating model Technology strategy and transformation Earned growth321Sta

90、ge 3:Optimize digital and human engagementsBy leveraging advanced data analytics,banks can blend digital and human engagements to create ultra-personal interactions and delight customers.Real-time data and analytics can be applied at the individual level,whether customers are at the counter or on a

91、mobile device.To achieve personalization at scale,traditional banks need experi-ence-led operating models and customer-driven cultures.Some banks may also need to upgrade their data and IT infrastructure to support more advanced customer experience capabilities.As the dimensions of customer experien

92、ce become more complex,traditional banks will need new ways to measure customer relationships across products,channels,and journeys.Continual,higher-velocity feedback loops will be necessary to benchmark performance,make timely and effective decisions,and“win on purpose.”Lay offers an example in whi

93、ch Hang Sengs accelerated customer feedback cycle helped the bank identify and resolve an issue with a system upgrade more quickly.“We picked up on the drop in NPS within a week and swiftly implemented corrective actions,”says Lay.“Responding quickly and effectively to customer feedback is central t

94、o maintaining trust.”Customer-based accounting can help traditional banks measure earned growth that results from customer experience.Combined,customer-based accounting and dynamic sentiment tracking(such as NPS or NPS Prism)can help traditional banks create delightful experiences.Key actions for vi

95、rtual banksAfter a two-year period of rapid growth,virtual banks are under pressure to become profitable.Under the current macro environment,investors are increasingly risk averse and focused on pathways to profitability over“growth at all cost.”The eight digital-native banks we studied are pursuing

96、 different development paths(e.g.,products,customer segments,personal vs.business banking).Will they steal a sizeable share of the market away from traditional banks?Or will they remain specialists,only winning certain customers and product niches?The jury is still out.But to succeed in the next sta

97、ge of development,virtual banks must take three critical steps.Step 1:Focus on the path to profitabilityEvery virtual bank has to take profitability seriously.To break even,the basic formula is to achieve high-enough scale at a low-enough unit cost.Virtual banks should revisit their unit economics,s

98、ince costs and complexity may have accumulated during periods of rapid growth.Management should also determine and track sources of the banks growth and categorize them as“earned”or“bought.”From there,leaders can ruthlessly prioritize strategies that drive profitable growth(e.g.,the right segments o

99、r customers who will buy more from them).Advanced analytics are key to this step.Use analytics to optimize marketing activities and spending so they are directed toward the highest impact and returns on investment.Step 2:Introduce products that enhance customer experience and lifetime valueSelective

100、ly introduce new products,focusing only on those that increase customer lifetime value and NPS.Every new product has to be a blockbuster that enhances customer experience.To do that,virtual banks should leverage immersive customer insights.Listen to customers to identify in-demand products and go-to

101、-market strategies.Stay focused on addressing unmet customer needs and strengthening the banks value proposition.Use strict financial discipline and track operational key performance indicators in real time to issue timely responses as customer needs and sentiments change.Step 3:Achieve experience-d

102、riven,profitable growth at scale Ultimately,success is about delivering superior customer experiences at scale.Virtual banks can leverage real-time customer data and advanced analytics to deliver personalization at the individualHow to delight digital banking customers in Hong Kong11level(e.g.,recom

103、mending the best consumer finance plan at the time of need).They can also leverage high-velocity customer NPS feedback loops to refine the customer experience.Growing profitable business at scale should be a strategic priority.Products with favorable margins and high customer advocacy will help virt

104、ual banks achieve economies of scale more quickly.Finally,efficient technology and operating platforms can lower operating costs and create competitive advantages over traditional banks.Virtual banks can turn the flywheel into a true profit engine.Conclusion Digital acceleration has paved the way fo

105、r a new and exciting era of retail banking in Hong Kong.Without the burden of legacy technology and processes,fintechs and virtual banks can be more nimble and innovative.Traditional banks are also leveraging digital technology to play both defense and offense.Whats the right strategy for your bank?

106、Ask your customers.Customers are the best source for feedback,opportunities,and sustainable growth.Banks that delight customerson any channelwill find exciting ways to grow.MethodologyThis report examines the digital banking market in Hong Kong,post-Covid-19.The findings and recommendations in this

107、report were informed by Bain&Companys analysis of the results,plus industry expertise.We surveyed about 1,400 retail banking consumers in Hong Kong in September 2022 to learn about their digital banking experiences and preferences.Our survey included consumers with accounts at traditional and virtua

108、l banks,and across a distributed range of genders,ages,income levels,and investable assets.About 79%of respondents reportedly use mobile banking apps.We also conducted interviews with nearly two dozen bank executives,industry practitioners,and market experts in Hong Kong to gain the service provider

109、s perspective.And we analyzed current market practices and business approaches.This research also used Net Promoter Scores from seven major retail banks and eight virtual banks in Hong Kong.NPS measures the degree to which a consumer would recommend an organization,product,or service to others.An NP

110、S score is the percentage of respondents who identify as “promoters,”minus the percentage of respondents who identify as“detractors.”How to delight digital banking customers in Hong Kong12Bold ideas.Bold teams.Extraordinary results.Bain&Company is a global consultancy that helps the worlds most ambi

111、tious change makers define the future.Across 63 offices in 38 countries,we work alongside our clients as one team with a shared ambition to achieve extraordinary results,outperform the competition,and redefine industries.We complement our tailored,integrated expertise with a vibrant ecosystem of dig

112、ital innovators to deliver better,faster,and more enduring outcomes.Our 10-year commitment to invest more than$1 billion in pro bono services brings our talent,expertise,and insight to organizations tackling todays urgent challenges in education,racial equity,social justice,economic development,and

113、the environment.We earned a gold rating from EcoVadis,the leading platform for environmental,social,and ethical performance ratings for global supply chains,putting us in the top 2%of all companies.Since our founding in 1973,we have measured our success by the success of our clients,and we proudly maintain the highest level of client advocacy in the industry.For more information,visit