Joseph NC Huang, president of E.Sun Financial Holding Co and E.Sun Bank, likes to remember something Bill Gates said back in the early 1990s: “Banking is necessary, but banks are not.”
Under Huang’s leadership, E.Sun has taken this disruptive ethos as a guiding principle. As a result, the bank has stayed a step ahead of its peers by incorporating technology wholeheartedly into its operations.
E.Sun Bank has three focus areas when it comes to using financial technology: mobile payments; online banking services; and the use of artificial intelligence. It has made strides in each of these areas.
In payments, E.Sun became the first bank in Taiwan to work with the likes of Alipay, WeChat and PayPal to facilitate transactions between Taiwanese merchants and Chinese clients. On the online banking front, E.Sun has given a big push to its online lending platform, thanks to which more than 20% of the bank’s new individual loan requests are online. But it is with artificial intelligence where E.Sun’s ambitions are best seen.
E.Sun was the first Taiwanese bank to introduce a chatbot to provide financial advice, integrating its program with popular Japanese app Line and social media network Facebook. E.Sun partnered with IBM Watson to kick start the chatbot. The impact of this tool was evident, with the usage and frequency of Facebook messenger and Line among the bank’s customers increasing by a whopping 1,850%.
The impetus for digital innovation stems not from the desire to jump on the fintech bandwagon. Instead, it is driven by the belief that banking could be disrupted significantly with the adoption of technology.
“The biggest challenge in the future will be our biggest opportunity as well,” says Huang. “The use of technology will change the look of the banking industry. A lot of banking services will be replaced, and if banks are not OK with this future, they can be eliminated. So our strategy is digital first – providing an internet and mobile-first experience, and adopting AI into the bank.”
E.Sun Bank’s vision is to be the best and the most-respected bank in Taiwan – not just when judged by financial performance but also in terms of corporate and social responsibility and corporate governance.
When it comes to financial prowess, the bank outperforms most of its peers. The bank has recorded robust profit growth over the last six years, and its capital size has doubled over the same period to NT$100 billion ($3.3 billion). Meanwhile, the bank has managed risk prudently, never compromising its asset quality for growth.
When it comes to corporate governance, E.Sun has some trump cards. About 45% of the bank is held by foreign institutional investors, while 23% is in the hands of employees – the highest foreign and employee ownership among all banks in Taiwan. This shareholding structure holds it in good stead.
“E.Sun is a banker’s bank. We make business decisions in a professional manner, and we always take CSR into consideration,” says Huang. “At E.Sun, we always try to comply with the highest standards of governance. We benchmark world-class standards of ESG, such as DJSI and MSCI ESG. We will be persistently improving our governance, care for the environment and social contribution to reach our vision in sustainability.”
Being a professionally managed bank, E.Sun has ambitious plans for overseas growth, a core strategy since 2012 to become a dominant regional bank, propelled in part by an overbanked market in Taiwan.
E.Sun has made much progress on that front. The bank has two offshore subsidiaries, one in China and the other in Cambodia, as well as branches in Hong Kong, Singapore, Los Angeles, Vietnam, Sydney, Myanmar and Tokyo. It plans to open further branches in Brisbane, Guangzhou and Shanghai.
With about 11% of E.Sun’s profit coming from its overseas operations, Huang wants to hit 15% in the next two to three years.
“Integration is key to the success of our cross-border operation,” he says. “We will provide total solutions for large corporates and SME clients. As our clients move offshore to expand and become more competitive, our cross-border platform can fulfil their financial needs overseas.”
It is a challenge, especially given foreign banks’ widespread presence in Asia. But it is a challenge E.Sun is conquering by slowly but steadily expanding its overseas platform. Add that to its increased focus on financial technology and it seems clear that the bank’s best days are likely yet to come.