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Enoch Yiu

New York may be known as the city that never sleeps, but many Hongkongers like to take care of banking transactions at 2am – a truth that helps explain why 40 per cent of physical branches have disappeared in recent years, according to local bank executives.
While the number of Hong Kong licensed banks had remained stable around 150 for many years, the number of bank branches had dropped 40 per cent to about 900 from 1,500 in recent years, said Sunny Cheung, CEO of Shanghai Commercial Bank.
“[In that,] you can see the change in the model of how we do banking,” Cheung said on Friday during a panel discussion at the annual conference of the Hong Kong Institute of Bankers, a professional body providing training and certification for banking qualifications.
The shift was permanent, said Simon Chung, CEO and managing director of Fubon Bank (Hong Kong), who spoke on the same panel.
“The number of branches has dropped very significantly in the last few years, and I believe that this number will not increase because our customers have changed their habit of interacting with banks altogether,” Chung said.
Chung said his bank’s IT department found that a lot of customers use the Faster Payment System (FPS) to transfer funds in the wee hours of the morning. Developed by the Hong Kong Monetary Authority, FPS is an interbank electronic payment network that allows registered users to transfer using simple identifiers, such as phone numbers.

“[I am] not talking about just 10 or 20 customers, but hundreds of them remain awake in the morning to transfer funds,” he said. “This is something we need to understand, and we need to make sure the bank is still available to these customers to satisfy their banking needs.”
Even setting aside the night owls, there were other reasons banks were pouring resources into digital banking and artificial intelligence-driven customer service, according to HSBC Hong Kong CEO Maggie Ng.
“At HSBC [Hong Kong], we have 7 million retail customers,” she said. “Even if I hire all the relationship managers in Hong Kong, it will still not adequately serve all our customers. And I would not do that because it would be super expensive.”
As such, HSBC had been adopting AI to serve its large number of clients, not only with banking transactions but also with investments, Ng said.
“AI will come to support our client services even better,” she said, hastening to add that HSBC would not use AI to replace the human touch.
HSBC also employed many AI tools that helped its bankers to serve customers, as well as to prevent fraud, she added. Each month, the bank used AI to screen over 1.2 billion transactions for signs of financial crime, which had significantly reduced fraud, Ng said.
Ng and other bankers on the panel said tokenisation of assets would be part of the way forward for banking, as customers liked to invest in tokenised bonds, deposits, gold and other assets.
Tokenisation refers to representing and trading real-world assets in digital form using blockchain, or distributed ledger, technology. Market capitalisation of tokenised assets could reach US$2 trillion by 2030, according to McKinsey.


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With the ability to transfer funds at 2am and AI to help plan investments, branches on every corner no longer make sense, local bankers say


With the ability to transfer funds at 2am and AI to help plan investments, branches on every corner no longer make sense, local bankers say.


Why Hong Kong banks have shut down 40% of branches in recent years

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}With the ability to transfer funds at 2am and AI to help plan investments, branches on every corner no longer make sense, local bankers say

With the ability to transfer funds at 2am and AI to help plan investments, branches on every corner no longer make sense, local bankers say