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.
