Quality management initiatives in Hong Kong’s banking industry: A longitudinal study

Abstract

As an international financial center, the banking industry in Hong Kong (HK) plays a significant role. Because of increasingly competitive pressure from domestic and overseas banks, HK banks must tightly control cost and improve quality and efficiency of operations in order to maintain profitability. For this purpose, quality management has emerged as an effective tool in recent years. In fact, it has been regarded as a vital strategic element for meeting the challenge of the new and intensified competition in the financial services industry (Knights & McCabe, 1996b, Managing Service Quality, 6, pp. 18-21). This paper reports the result of a survey on quality management initiatives in HK`s banking industry between 1997 and 2000. The trend of changes in these years is analyzed and the results from HK are compared with those from British financial institutions reported by Wilkinson et al. (1996, Total Quality Management, 7, pp. 67-78). The results show that HK banks have gradually adopted quality initiatives and gained significant success in quality management over the past 3 years. They focused more on meeting service standard and providing prompt services while banking institutions in the UK focused more on understanding and meeting customers` needs.