This annual update forecasts developments and trends affecting Hong Kong’s banking sector in 2018. With the market environment starting to stabilise in 2017, there are a number of positive developments and opportunities in the year ahead for banks in Hong Kong to increase their profitability.

We believe that 2018 will be the year where fintech goes mainstream in Hong Kong. We appear to have reached a tipping point where the adoption of fintech and other technologies across all aspects of banking has become a priority issue on the boardroom and executive committee agenda. This trend is likely to drive the industry towards making a step change in the adoption of fintech in the next 12 months.

The update notes that with increasing signs that US interest rates will continue to rise, Hong Kong banks are likely to benefit with better yields and increases in revenue in 2018. 

We also expect to see credit losses remain within their existing levels, with China’s financial deleveraging proceeding at its current controlled pace without any large shocks that could cause potential losses for banks in Hong Kong.

The analysis also shares our 2018 outlook for a number of key focus areas for banks in Hong Kong, including regulation, conduct, anti-money laundering, fintech, robotics, non-performing loans, tax and bank culture.