An interview with Michael Leung
China CITIC Bank International Limited's Chief Information and Operations Officer speaks to FST Media about how wearable devices will change the future of payments and banking.
FST Media: What are your IT investment priorities for the next 12 to 18 months?
Leung: The next 12 to 18 months will see CITIC Bank investing significantly in revamping, and in some cases rebuilding, our technology infrastructure and systems architecture, following a definitive roadmap that we have developed called the ‘Rose Garden Plan’. While the plan spans over three years, most of the work has commenced this year. This plan will cover the Core Banking System, Internet Platforms and Professional Applications (collectively called "CIP"), along with a middleware layer and a comprehensive data architecture. It is a mega plan involving substantial financial and human resources, as well as considerable risks.
FST Media: What is next for matching internet banking with mobile banking at CITIC Bank International?
Leung: Our overriding strategy is to develop internet banking into a premier customer relationship platform, whilst delivering a highly functional, just-in-time sales and services channel for mobile banking. In addition to functional features available through internet banking, there are a number of functions made available only through mobile devices, such as WeChat banking for notifications and transactions, as well as mobile payments and, eventually, peer-to-peer (P2P) and online-to-office (O2O) transactions. CITIC Bank International is at the very forefront of these developments.
FST Media: Can you outline the WeChat inMotion Service and how it will deliver value to the business?
Leung: WeChat is an open platform that provides a set of APIs for notification and transaction functions to be integrated with CITIC Bank's core systems. For customers with a WeChat account, CITIC Bank can deliver general information like market news and product info, as well as context and location-sensitive promotions like discount coupons at nearby stores. Once the customer integrates their WeChat ID and bank accounts, they can immediately receive a selection of transaction alerts such as ATM withdrawal, cheque clearing and funds transfer, as well as a range of personalised lifestyle related messages, such as anniversary or birthday gift collection notices, deposit or investment product maturity special offers, and holiday recommendations and tips. The next phase of the inMotion program will focus on financial and transactional services, including mobile payment at POS outlets and funds transfer in the fast-emerging P2P and O2O domains.
FST Media: How are you progressing with rebuilding CITIC Bank’s core infrastructure?
Leung: The revamp and rebuild of CITIC Bank's core infrastructure is being undertaken in a holistic and futuristic manner. This begins with a comprehensive rethink of how CITIC Bank will evolve over the next three to five years. For example, we may consider what new business models and areas CITIC Bank is likely to adopt, and which demographics and geographies CITIC Bank is likely to move into. With the assistance of a leading international consulting firm, we have developed a ‘5-tier’ technology model comprising of foundation infrastructure, common facilities, shared services, business applications, customer experience and user experience. We have also moved on to redesign and revamp our technical infrastructure: this includes firewall and server consolidation, database centralisation, desktop virtualisation, as well as network rationalisation and overall technology standardisation. In conjunction with this is work on System Architecture, anchored by the Enterprise Service Bus middleware, Operational Data Store and Enterprise Data Warehouse, Documents and Workflow Engine, as well as Customer Relationship Management. Most of these are work-in-progress items by now, riding on bulk-purchase arrangements with several IT service providers.
FST Media: How will CITICwallet and the Motion Credit Card use contactless technology to deliver an enhanced payment experience?
Leung: Contactless technology is already the ‘norm’ in Hong Kong, thanks to the tremendous success of the Octopus Cards, and the maturity of NFC technology. The joint ATM/POS network operator, Jetco, has garnered pan-industry support to develop a POS mobile payment platform riding on the VISA payWave, MasterCard PayPass and, hopefully soon, the CUP QuickPass infrastructure that exists locally. CITIC Bank International is one of the first Jetco member banks committed to this endeavour. At the same time, we are also exploring other opportunities, such as Google Wallet and Apple Pay. For CITIC Bank, contactless technology represents a great opportunity as we are able to offer many value-added services, such as notifications and transactions, in addition to payment functions.
FST Media: How will wearable devices change the future of payments and banking?
Leung: Over the past decade, we have witnessed the change of personal devices from transportable to portable, from ‘portable’ to now ‘wearable’, and we will soon see wearable devices become an increasingly integral part of our own lives. The use of such devices, being so convenient and natural, has the potential to transform the ways in which banks and their customers interact with each other. For instance, market price alerts can already be sent directly to a smart watch today, and wealth management consultants may soon be able to display live images and videos of family homes, dream cars and holiday resorts directly to a pair of virtual reality glasses. We can expect to see a great number of innovations in this space.
FST Media: Do you consider payment disruptors such as AliPay and ApplePay to be a threat or a potential partner?
Leung: We see payment disruptors like AliPay and ApplePay as both competitors and partners. Competitors, because they do venture into the e-commerce credit and payment businesses that banks always perform, which cuts into the profits that banks once made from interest and fees. At the same time, they are also expanding the scope and generating additional volume of financial activities, and thus bringing in new revenue streams for banks, because they still rely on banks to handle money transfers, clearing and settlement. They also rely on banks for other transactional functions that only banks are capable of executing within the existing financial systems and money markets.
FST Media: How will you use data analytics to deliver a seamless customer journey?
Leung: Data Scientists who are capable of generating well-informed business decisions through data analytics, are probably the most precious and sought-after talent these days. Financial institutions possess an immense volume of information about their customers, particularly those in the ‘high-net worth’ segments. This includes demographic and financial profiles, investment experience and risk appetite, lifestyle preferences and propensity to spend, among others. In addition, banks are beginning to harness the vast amount of information available in the public domain, which can often supplement what CITIC Bank already knows about a specific customer or a particular customer segment. With such intimate knowledge at different life stages of a customer, banks are able to offer tailored products and personalised services through the most effective channels.
FST Media: What is your most effective customer acquisition channel and why?
Leung: Customer acquisition takes place through different channels depending on the customer segments and age groups. That is why large-scale banks like CITIC Bank International must maintain a comprehensive channel presence, including relationship managers for corporate clients, account managers for SMEs, private bankers for ‘high-net-worths’, direct sales for personal loans and credit cards, as well as branches for the general public. However, the current regulations in Hong Kong still require banks to meet customers face-to-face for the initial consultation so we believe it is not feasible to use e-channel, call centres or phone banking to acquire new customers.
FST Media: Every leader has a legacy they wish to be remembered for, what is yours?
Leung: I want to be remembered within CITIC Bank International as the CIO who turned the ‘Rose Garden Plan’ from a dream into reality.