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Bank branches continue to decline as more lenders go digital amid pandemic but city’s elderly mean they will not disappear entirely
- Covid-19 pandemic has ‘given rise to new opportunities in digitalisation and the use of technology’, says DBS
- Major lenders say their businesses have functioned as usual even though hundreds of branches were closed temporarily during lockdowns
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One day in early March, Cheung Tin-sang found that the Hang Seng Bank branch near his office in Hong Kong’s Sheung Wan area was closed. Unperturbed, the octogenarian walked 15 minutes to another outlet in Central to withdraw cash.
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“Getting cash is the major reason for going to the bank these days, as [almost every aspect of banking], such as the settlement of clients’ funds, is now handled electronically,” said the veteran stockbroker, who trades at Luk Fook Securities (HK), which has five offices in the city.
Hang Seng’s Sheung Wan outlet was one of the 600 bank branches that shut their doors to customers that day all over Hong Kong, as an outbreak of the highly transmissible Omicron variant of Covid-19 closed restaurants, schools and businesses in the city of 7.5 million residents.
Still, banking continued non-stop, as borrowers and depositors switched to digital apps, e-payments and virtual banking, according to the Hong Kong Monetary Authority (HKMA).
Hong Kong is served by 164 licensed banks with about 1,100 branches, making it one of the most densely banked cities on Earth. The calm that greeted the 10-week suspension of branches – the longest span in the city’s history – prompted many banks to double down on their embrace of digitalisation, raising the question whether a bricks-and-mortar outlet that typically costs HK$1 million (US$127,400) a month to run still makes commercial sense.
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