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Leading Taiwan’s response to the Covid crisis

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Daniel Wu, president of CTBC Financial Holding, discusses the bank’s commitment to corporate social responsibility and digitization, particularly in making it easier for customers to access banking services.

As one of Taiwan’s most reputable and influential financial institutions, CTBC Holding has long been a national leader in proactively promoting sustainable development – a position that we have been able to utilize for good during the Covid-19 pandemic.

The three pillars of our sustainability strategy, namely Sustainable Growth, Responsible Operations and a Connected Society, are aimed not only at increasing value for our stakeholders but also bringing us in line with the UN Sustainable Development Goals. Of our seven aspirations under these three pillars, ‘Positive Impact Finance’ and ‘Innovative Digital Applications’ are proving the most important in promoting sustainability through our core business and in turn having a meaningful impact on the environment and the community.

We passed a new milestone in realizing this commitment to global-standard sustainable development and finance earlier this year when we established our Corporate Sustainability Office. The office is charged with overseeing how corporate sustainability and responsible financial practices are carried out across CTBC Holding’s subsidiaries. We have also upgraded our Sustainability Committee to a board-level committee. Comprised completely of independent board directors, it is responsible for providing supervision and guidance for sustainability-related issues across our group.

In addition, all of our subsidiaries proactively adhere to various UN sustainability initiatives, such as the Principles for Responsible Banking, Principles for Sustainable Insurance and Principles for Responsible Investment. With such combined efforts, we’re making real progress toward our goal of becoming not just a national but an Asian regional leader in sustainable financing.

Indeed, our spirit of proactive, sustainably minded planning has proven invaluable in 2020.

As the Covid-19 pandemic spread, upending lives and businesses everywhere, CTBC Holding set employee health as our top priority. We immediately established a pandemic response team and implemented a series of disease prevention measures to reduce the impact on our operations in Taiwan and abroad. Meanwhile, to ensure we continued fulfilling our corporate social responsibilities during this unprecedented time, we launched comprehensive mitigation mechanisms through our core businesses in compliance with the epidemic prevention policies of the Taiwan government, becoming a key plank in the public support system.

We found that the kinds of direct relief required by the pandemic were highly diverse. For example, we supported our business tenants in CTBC Financial Park by reducing rent by up to 36%, easing their financial pressure and helping them keep their doors open. We also gave larger reductions of up to 86% for smaller vendors in the CTBC Financial Park food court. Dozens of tenants benefited from the policy, with the amount of rent reductions exceeding NT$10 million.

The pandemic has put a spotlight on the role digital finance plays in providing relief for individuals, supporting businesses and protecting jobs and livelihoods.

Our subsidiary CTBC Bank also initiated several financial relief programs. These included a program for affected individuals and businesses, for whom we cut mortgage rates by 0.5 percentage points and personal credit loans and credit card revolving interest rates by up to 0.75 percentage points. Furthermore, principal or interest payment deferrals of three to six months were offered to Covid-19 patients, medical staff working with Covid-19 patients and the owners of businesses who had taken unpaid leave and suffered a decline in revenue of 15% or more.

The unprecedented social and economic crisis caused by the pandemic has also put a spotlight on the role digital finance plays in providing relief for individuals, supporting businesses and protecting jobs and livelihoods.

With CTBC Bank having the most advanced digitalization in Taiwan’s banking industry, more people filed labor relief loan applications with us than any other financial institution. Within six weeks of the program’s launch, we had received more than 280,000 applications. Furthermore, in keeping with our spirit of innovation and agile management, we introduced a fully digitized processing mechanism for these online relief loan applications. By utilizing a smart engine and robotic process automation, our system requires an average of only 1.5 minutes to review an application.

For these efforts, the Financial Supervisory Commission presented our company with awards in numerous categories and deemed us a 'Bank of Excellence' during a ceremony honoring the domestic banking industry’s accelerated processing of relief and economic revival loans.

As we learned from this experience, the Covid-19 crisis and its economic aftermath have drastically accelerated the digitalization trend. There have never been more opportunities to harness digitalization while simultaneously funneling financing toward achieving SDGs.

To this end, we are doubling down on our long-running drive to provide the smoothest possible customer experience by integrating digital financial services into the public’s daily lives. For this, we have adopted a three-pronged strategy comprising digital transformation, digital innovation and digital infrastructure. Powered by our dual growth engines of banking and insurance, we have continued to launch online and offline digitalization projects to provide omni-channel financial services that deliver a convenient and consistent customer experience. We have also introduced robotic process automation into all our subsidiaries to improve operational efficiency and customer satisfaction.

Looking ahead, hopefully to a post-Covid world, CTBC Holding will continue to make investments and deployments in the global fintech ecosystem to stay on top of the latest technology trends and achieve both financial and strategic investment efficiency. After all, this is one of the key ways we are creating value for stakeholders in the long term: by combining business growth and financial stability with social and environmental sustainability. With this integrated sustainability strategy, we are able to better manage our response to the market challenges of today and tomorrow, and to do so in a sustainable manner that ultimately realizes our “Taiwan Champion, Asia Leader” vision.

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