In the past decade, the financial services industry has undergone many changes. Following the 2008–2009 economic crisis, policymakers increased regulations in the industry to protect banks against future shocks. Large financial institutions were required to have an additional capital buffer and a minimum amount of liquid assets. And the best-performing banks began to dramatically cut costs—including the cost of real estate.
At the same time, the current coronavirus pandemic has highlighted the need for financial institutions to accelerate their digital transformations in banking. Cloud-based digital financial services have quickly evolved, leading to a rise in online transactions, which has further impacted financial services’ real estate needs.
Today, amid COVID-19, decentralisation, or having many satellite offices rather than one large central headquarters, is not only paramount to the success of financial institutions but also plays a pivotal role in ensuring the health and safety of employees. But to keep up with changing times and stay ahead of potential future disruptions, the banking industry needs to adjust business models for both front-facing and back-office operations.
Trade in for flexi work and lower Capex
This year, we saw financial institutions doing just that – trading traditional office spaces in favour of flexi work arrangements. For example, Singapore lender DBS Group Holdings Ltd gave up two floors in the upmarket Quarry Bay area to adopt more flexible working arrangements for their staff.
International banks such as BNP Paribas SA and Standard Chartered Plc walked away from prized office spaces in Hong Kong in exchange for remote working co-working spaces. Standard Chartered gave up eight floors in the Central CBD to trial co-working offices for their 6,000+ employees, potentially saving the company USD 770,000 per month in costly rent.
Hong Kong property consultants noted that demand from big multinational corporations for flexible work space is expected to grow as they view it as an attractive option for entering into new markets, reducing capital expenditures and testing out alternative workplace strategies.
The decentralization operation trend
Banking will continue to have a geographically diverse footprint. WeWork is uniquely positioned to support that through our global network of prime assets.
The decentralization trend we are seeing with traditional banks and their workforce is happening across the globe, both within cities like Hong Kong and across markets. In large cities, the presence of remote work and advancements in cloud-based technology has allowed banks to move from a “one tower” model in favour of spreading employees across multiple locations, often at a lower cost.
The challenges of COVID-19 have seen traditional banks requiring more space to de-densify their workforce and ensure the health and well-being of their staff. WeWork’s portfolio of seven high-profile flexible locations in Hong Kong ensures clients can quickly move into Class A locations with superior amenities.
While expansion into new markets has traditionally taken considerable time and money, WeWork delivers unparalleled speed and flexibility with a range of business solutions to suit financial services Hong Kong. With our global footprint and flexible deal structures, we can sign a contract on Friday and move your clients into their new office on Monday morning—saving your clients valuable time and capital.
Flexible deal structures
The rise of neo-banks has seen them betting they can win over customers with more attractive interest rates on savings and loans – which they can offer in the absence of costly branch networks. New digital banking services in Hong Kong behave much like startups. Their strategies may challenge traditional banking products because they’re often mobile-first digital disruptors. Hong Kong’s new digital banking operations plan to venture into business lending and wealth management, seeking more lucrative avenues beyond basic savings accounts and transfer services.
As they prioritise speed in their operations, they need a flexible real estate portfolio that helps them mitigate the high opportunity cost of capital in their early years. WeWork offers them just that.
WeWork’s full suite of amenities and beautifully designed spaces are a strong draw for this demographic. And with our flexible deal structures and inventory in prime markets, WeWork can quickly help these banks find the space they need at the price point they want.
WeWork has partnered with Singapore-based FinTech start-up Volopay to offer integrated business spend management solutions in Singapore and Australia, with an eye towards possible expansion to other locations.
With Volopay, all business payments are combined, with approvals, accounting automation, and expense reimbursements coming together into one single stack which WeWork’s members can now access.
This partnership offers WeWork’s members, from start-ups to larger tech enterprises, the opportunity to streamline their expense and payable management processes that align with their business needs. Further, it will add significant value propositions to its members relating to substantial savings, digitalisation, and automation of their financial processes.
Customisable, secure spaces that adhere to strict regulations
Traditional banking is strict about who has physical access to its facilities, is sensitive about managing private conversations, and has tight regulations governing client data. It also has specific needs around network access and space to house network infrastructure. New digital banking operations Hong Kong often operate independently but must follow these regulations.
WeWork can provide high-level physical and network security across all clients. Clients have the option to complete full-floor or multi-floor deals, mitigating physical security concerns and ensuring that conversations remain private.
Similarly, WeWork’s inventory is fully customisable, in that floors can be set up to accommodate open-floor, safely spaced work or closed-door, individual offices. In addition to secure, physical spaces, WeWork also offers your clients the ability to control their own IT closets and meet regulatory security standards.
If you’d like to learn more about how we can creatively structure layouts, locations, and deals to serve your financial services Hong Kong and clients, please visit wework.hk to connect with us today.