E.Sun Commercial Bank president Joseph Huang
Joseph Huang, president of E.Sun Commercial Bank, is honest about the threats banks face today from digital disruption, but he is equally open to solutions.
He tells Asiamoney he is just as willing to partner with fintech companies as he is to fight against them. And despite investing in building E.Sun’s in-house capabilities – including a team of 80 to work on artificial intelligence – he is also keeping an eye out for acquisitions.
“We will cooperate, we will acquire and we will invest in our own capabilities,” he says. “It is important that banks be willing to do all of that. It doesn’t matter if technology is invented in-house or not. As long as it adds something to our customers, we should be interested.”
This approach is sure to continue the transformation of E.Sun. The bank was founded in 1992 as a lender to small and medium-sized enterprises in Taiwan. But over the last five years or so, it has begun a push into the international market.
E.Sun now operates across nine countries and regions. It has 139 branches at home, and branches, subsidiaries and representative offices in 28 cities elsewhere, including Hong Kong, Singapore, Tokyo, Sydney and Los Angeles.
E.Sun is following its Taiwanese clients as they move overseas in search of cheap labour or new opportunities.
It has a loan book of about NT$1.3 trillion ($42 billion), split fairly evenly between corporate and retail clients. SMEs still make up roughly half of the bank’s corporate lending but the percentage is falling over time, largely because overseas lending is growing more quickly.
That is not to say E.Sun is turning its back on its historical client base. Digital solutions allow E.Sun Commercial Bank to keep its relationships with SMEs – and build new ones – without hampering its ability to grow in other markets.
Private banking is one of those markets. Huang speaks animatedly about the possibilities for joint ventures with the world’s biggest private banks, helping them to access Taiwan’s wealthiest people while expanding its own business.
“There is so much opportunity for us here,” says Huang. “The government has encouraged the remittance of offshore money back into Taiwan. We can upgrade our wealth management business into a full-scale private bank.”
Wealth management is typically seen as being a ‘high-touch’ business, relying more on personal relationships than algorithms and digital apps. But Huang says AI could boost to E.Sun’s wealth management business by allowing it to rapidly identify the products that relationship managers should be pitching to their clients.
E.Sun’s focus on CSR has won it a position in the Dow Jones Sustainability Index for five years running
The bank will also be helped by its branches in Hong Kong and Singapore, both markets where it has recently obtained private banking licences.
Huang’s strategy appears to be working. The bank’s post-tax earnings broke NT$17 billion for the first time in 2018, a 15% increase on the previous year.
The bank employed 8,278 people by late March, meaning its overall headcount was slightly down for the second year in a row.
This is inevitable for any bank that has made a bet on digital banking, but Huang says E.Sun makes a lot of effort to train up its own staff, helping them keep up with the bank’s increasing shift towards digital banking.
“Technology cannot solve everything,” he says. “A lot of digital banks talk only about developing technology, but it’s equally important to develop your people. I like to say that E.Sun is ‘technology inside, people outside’. They’re both equally important.”
That is an attitude that hints at Huang’s approach to wider corporate and social responsibility. E.Sun’s focus on CSR has won it a position in the Dow Jones Sustainability Index for five years running. It has also informed the bank’s charity efforts, including the creation of 137 libraries and the launch of a project to help disadvantaged and underprivileged schoolchildren.
E.Sun has grown rapidly in the 27 years since it started – but quite how far can this expansion go? Huang is realistic enough to know that it will be difficult for any Taiwanese bank to become a global challenger when it comes to asset size or market capitalization, however much it invests in digital banking. But that does not mean he cannot take aim at his world-wide rivals.
“In the next 30 years, we will be among the top quality banks in the world,” he says. “We won’t be among the largest – that is not realistic. But in terms of quality, we will be in the very top tier.”