Magazine article American Banker

Jump in Asian Web Banking Tied to SARS

Magazine article American Banker

Jump in Asian Web Banking Tied to SARS

Article excerpt

The SARS epidemic appears to have produced, among other things, a spike in Internet banking in Asia, as more consumers, fearful of public places, have been initiating transactions from their homes.

Several banks have temporarily closed branches in Hong Kong in recent weeks because of the spread of severe acute respiratory syndrome, and many customers there and elsewhere in Asia have been avoiding banks, according to some in the region.

"There were fewer people in the branches, and we did see an uptick in electronic banking," said Gareth Hewett, a spokesman for Hongkong and Shanghai Banking Corp. in Hong Kong. "I think people were using the Internet for banking when they could and avoiding the branches."

The city has been one of the epicenters of the disease, which emerged in China in February. Nearly 800 people, including almost 300 in Hong Kong, have died from the disease, according to the World Health Organization.

Separate incidents in April -- two involving employees who became infected and one involving a nearby housing development with a high infection rate -- forced the unit of HSBC Holdings PLC to close three branches for a week.

Virginia Garcia, a senior analyst with the financial services strategies division of TowerGroup, a consulting firm in Needham, Mass., said that branch traffic in Hong Kong has dropped by half since the outbreak and that the number of account openings and loan applications there has fallen significantly.

But the Internet banking penetration rate there has risen by 40%, to 11.6% of households, since the start of the crisis -- "a huge jump," Ms. Garcia said. "Every aspect of the financial services industry has been affected."

However, Mr. Hewett said SARS has not been the only factor. HSBC has been heavily promoting the use of electronic payments for the tax bill that came due for Hong Kong residents in late March and early April. …

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