As a major hub for trade and commerce in the heart of Asia, Hong Kong has long been a hotbed for digital innovation. However, the latest research by DBS on digital transformation found that only 7% of businesses in Hong Kong are identified as digital transformation leaders, compared to 11% for APAC businesses.
The findings were based on a global survey of 1,225 executives from commercial and finance/treasury teams across 22 markets in APAC, Europe and the United States, of which 100 of them were from Hong Kong.
The research revealed that the top three goals for businesses in Hong Kong to achieve digital transformation include improving collaboration across functions and teams (35%), improving customer experience (34%), and increasing efficiency (33%). Close to half (47%) believe that the ability to take decisions quickly is the most important element to support successful digital transformation from a corporate culture perspective, followed by shared adoption of a strategic vision (37%).
Despite the strength of Hong Kong’s digital infrastructure, Hong Kong has a relatively small number of leaders in digital transformation (7%) in comparison to other markets in Asia, such as Indonesia, Vietnam, mainland China, Singapore and Taiwan. However, 33% of respondents are classed as “developing leaders”, suggesting that the city’s overall proportion of transformation leaders may expand in the years to come.
Most Hong Kong businesses surveyed also identified alienating their customer bases (34%) as their top barrier to transform at speed, perhaps due to economic uncertainty amid growing inflation worldwide. They are equally concerned that an unclear organisational strategy can be impacting their transformation efforts, which explains why the shared adoption of a strategic vision is high on the list of priorities for a successful corporate culture. In addition, gaps in talent is seen by 32% of respondents as a challenge.
Commenting on the gaps in talent as a key barrier to digital transformation, Wallace Lam, Managing Director and Head of Institutional Banking Group, DBS Bank (Hong Kong) Limited, said, “Competition for talent in the digital technology space continues to grow. Therefore, it is important for business leaders to nurture and develop Hong Kong’s next generation of technologists. This will not only help businesses accelerate their digital transformation goals and retain their very talent, but also expand the city’s pool of leaders in this area.”
“At DBS, we’ve been doubling down on our efforts to reskill and upskill our employees to create a tech-savvy workforce. Today, some 85% of DBS Hong Kong employees have undergone our digital curriculum.”
The survey also explored the growing role that treasury and finance are playing in enabling change and innovation. Cloud technology (67%) is seen as the most important tool for transforming these two business functions, a trend supported by Hong Kong’s high number of data centres. This strong network capacity and data infrastructure may also explain why advanced analytics (50%) is gaining traction.
Within the treasury function, investment activities are the top focus of transformation, closely followed by financial reporting. As part of this, many businesses will be seeking external partnerships. Among Hong Kong respondents, the most popular form of partnership is with banks, with 57% favouring these arrangements compared to the global average of 44%.
However, finance/treasury teams in Hong Kong also appear to be less involved in strategic decision-making than those in other markets. Only 39% of the respondents said the pandemic had raised the function’s profile in the business, compared with 52% across the global sample. The research indicates that Hong Kong businesses should address this disconnect as a priority, integrating these teams into their innovation processes.
In addition, businesses found it difficult to establish a strong, productive relationship between the finance/treasury and commercial/sales teams (59% Hong Kong vs. 47% global average). A significant challenge in this respect is that the teams take different approaches to risk (38%) and have competing priorities (35%). To avoid conflict and maximise effectiveness, business leaders should strive for closer alignment and identify shared objectives.
Boris Chan, Managing Director, Head of Global Transaction Services, Institutional Banking Group, DBS Bank (Hong Kong) Limited, said, “COVID-19 has accelerated the drive for digitalisation, and particularly for SMEs, which account for 98% of businesses in Hong Kong. Though many SMEs have been able to adapt to and thrive in a rapidly changing business environment, many are struggling to transform at speed mainly caused by uncertain business environment, and an unclear organizational strategy. Treasury, commercial functions and business leaders should collaborate, align and define a clear strategic vision which encompasses the use of data analytics, AI, and even blockchain-enabled platforms to function more effectively and efficiently.”
[End]
About the research
The survey was completed by 1,225 respondents between June and August 2022, from a total of 15 industry sectors and 22 markets worldwide. Respondents were 50% C-suite and 50% C-1, with 50% from finance/treasury and 50% from commercial functions including sales and digital transformation teams focused on customer engagement. The majority (60%) of respondents were from businesses with over USD 1bn in annual revenue.
Research was carried out by FT Longitude, the specialist thought leadership division of the Financial Times Group. More information
About DBS DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022. DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience. With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.
