Hang Seng Bank sets benchmark in digital currency innovation with top honours at ABF Fintech Awards 2024

The Bank receives Digital Currency Award for its role as a leading advocate of central bank digital currency, through a hypothetical e-HKD-based e-Wallet prototype and demonstration of associated use cases.

Hang Seng Bank (‘Hang Seng’), the largest domestic bank in Hong Kong, has emerged as a frontrunner in innovation, capturing prestigious accolades at the ABF Fintech Awards 2024. This recognition celebrates Hang Seng’s commitment to innovation and excellence, particularly its participation in exploring the value an e-HKD could bring should it be implemented by the Hong Kong Monetary Authority (‘HKMA’). Hang Seng has been a leading advocate of central bank digital currency (‘CBDC’) in Hong Kong and Mainland China, actively participating in research and development in this area.

A number of Hang Seng’s use cases involving programmable payments were selected by the HKMA, for evaluation under the e-HKD Pilot Programme. The first use case was for a merchant payment and rewards programme, offering advanced loyalty programme integrations for merchants, reducing setup costs and enhancing customer experiences through immediate rewards and personalised interactions. The second use case relates to government grant disbursement, providing a single channel for automating notifications to beneficiaries once eligibility is confirmed, guaranteeing instant disbursement through atomic settlement, and improving traceability of fund usage. Lastly, conditional and traceable P2P transfers were considered, providing payers control and visibility on usage of funds.

The completion of real-life simulations for this pilot demonstrated the potential for a hypothetical e-HKD to provide both individuals and merchants with greater traceability and programmability. This was of particular interest to small merchants in digitising their payment collection processes and streamlining operations. The demand for conditional payments has become increasingly ubiquitous, including long-term service subscriptions that necessitate payments over a period, and peer-to-peer marketplaces where payments are required upon receipt of goods.

The impact e-HKD pilot could potentially be profound, with an 80% satisfaction rate amongst users attained during live simulations conducted under the e-HKD Pilot Programme, demonstrating a high degree of alignment with customer needs. Additional benefits include enhanced operational efficiency, with estimated savings of 15 days per transaction for the government grants programme, and a reduction of reward redemption duration from days to real time. This high level of approval underscores the initiative’s alignment with customer needs and its potential to streamline financial operations significantly.

Through these pioneering initiatives, Hang Seng has demonstrated its position as an industry leader in digital finance innovation. By collaborating with innovation ecosystem partners including regulator bodies, public institutions, academia, students, merchants, startups and technology companies, Hang Seng is contributing to Hong Kong's evolution as a leading international financial centre in the digital era and an international innovation and technology hub.

The ABF Fintech Awards is presented by Asian Banking & Finance Magazine. To view the full list of winners, click here. If you want to join the 2024 awards programme and be acclaimed for your company's impactful contributions to the fintech industry through pioneering solutions and successful deployments, please contact Julie Anne Nuñez at [email protected].