RealTime IT News

Hong Kong's Elite Attend IW's Net Finance Summit

Nearly two hundred of Hong Kong's financial services elite turned out for Internet World's Asian Internet Financial Services Summit in Hong Kong last week.

Topics discussed at the summit included trends for the Asian brokerage industry, moving traditional brokerages online, the future of Web-based online information, Asian Internet banking, and security issues in online banking.

"The Hong Kong banking and finance community is being forced by the Internet new kids on the block to move their business on the Net," said Michael Westcott, managing director of Penton Media Inc, a Cleveland-based conglomerate that owns the Internet World trade show line and publications.

"It is pretty clear given the representation of the biggest financial players that the Hong Kong and Asian financial communities are serious about the Internet medium," added Westcott.

Some of these players included the Stock Exchange of Hong Kong, the Securities and Futures Commission, ABN-AMRO, Guangdong Securities, Commerzbank Global Equities, Sung Hung Kai Securities, Deutsche Securities, Citibank Corp, DLJ, Dao Heng Securities, HSBC Securities, Hang Seng Bank, Credit Suisse First Boston, Dresdner Bank, DBS Securities, and Deloitte & Touche Consulting Group.

According to polling of participants, the more significant discussion covered these questions: Is an Internet-enabled traditional stock exchange member more viable than an online startup? Is it better to buy or build an Internet trading system? How important is security in banking?

"We expect that there will be more brokerages offering Internet or electronic services due to increasing technology, speed and cost efficient, but we do not see the Internet becoming a "total solution" but as a tool to aid in the provision of better services given that people have different tastes," said Ken Khoo, a speaker and the managing director of Celestial Asia Securities Holdings Limited (CASH).

CASH was the first traditional broker in Hong Kong to adopt an Internet trading system.

Mark Duff, also a speaker and the CEO of Boom Securities, Hong Kong's pioneer in Web-based dealing, commented,"I am willing to bet that [in a short time] a seat on the Stock Exchange will be a commodity."

"One seat is not valuable to us," said Duff, "What is valuable to us is 20."

Boom does not have a seat on the exchange and uses traditional brokers to trade on the Hong Kong Stock Exchange.

"There will be a hundred [online] brokers in Asia before the end of 1999," said Duff. "By the end of 2000 - 2001, you will be seeing a blossoming and then a consolidation."

In regard to building a trading system, Ralph Silva of Interactive Investor, said,"The hardest thing is to find someone who has experience in this business."

Patrick Chan, Boom Securities' director of technology, indicated that there were many challenges in the Hong Kong market to Internet trading including lack interest and confidence in e-commerce, poor market conditions, changes in market regulations and environment, lack of good market information, and scarcity of talent.

Chan said that building a trading system was better than purchasing it because the online broker is able to get to know the customer and the industry better, technical support is in-house, and easier to adapt to exchange modifications or user trends.

Another speaker at the forum, sales director of Fortitude Securities, Christopher Aiello said, "When we decided to enter the online dealing business about a year ago... we decided it would not make a lot of sense as a young entrepreneurial firm to start a new independent stock brokerage operation catering to retail investors."

"My partner and I have both been in Asia a long time, and we are very aware, that relationships, a strong brand image, and a long financial history, are important elements to gaining the trust of clients and an allocation of their capital and assets," added Aiello

Instead, Fortitude is focusing on creating an International network of traditional brokers around the world that are inter-connected by utilizing Fortitudes proprietary on-line dealing and backoffice application, MrMarket.com.

In the area financial information, the debate was contentious over the viability of the subscription-based model versus advertising-based model.

On the issue of security, panel members and attendees were in agreement in regard to its essentiality for e-banking, particularly in Hong Kong and Asia where banks lack confidence in e-commerce.

Simon Naylor, the vice president of Security Dynamics, Inc. in Asia, said,"As the Internet becomes integral to business goals, the vulnerabilities in opening the network to customers, partners, or remote personnel increase exponentially."

"The number one issue that is bugging Asian IT managers is system security," added Naylor.