But as markets stabilise and confidence returns, there are also new opportunities arising. Financial institutions that see the evolving trends and position themselves accordingly will be best placed to benefit. But first they must put in place the strategies, structure and mindset to understand shifting demands and deal with changed expectations.
Reflecting this, the main theme of the Hong Kong Institute of Bankers (HKIB) second annual banking conference, taking place on Tuesday, will be "Hong Kong: New Role, New Growth". Keynote speakers, panel discussions and specialist sessions will explore the topic from different angles.
"We have heard people predicting that Hong Kong's role as a centre for international finance will fade," says Carrie Leung Ka-lai, CEO of the HKIB. "But through this conference, we want to show its continuing strength by focusing on the opportunities for growth, as well as on what has to be transformed to meet new needs." She has no doubt that Hong Kong can maintain its unique position. As a financial market, it is much more open than the mainland, and has the reputation and regulatory framework to deal with international business requirements. There is the ability and expertise to satisfy demand for diverse transactions or new products. And, the talent pool of banking employees is considered better trained than their counterparts in most other cities.
"We have a competitive edge, but to sustain our status as an international financial centre, we must move forward," Leung says. "The new role for Hong Kong is about evolution rather than dramatic change, and it will depend increasingly on the relationship with the mainland."
The conference agenda features speakers who will analyse this changing relationship and what it means. For instance, in her opening remarks, Au King-chi, Permanent Secretary for Financial Services and the Treasury, will consider Hong Kong's place in the wider mainland market. Ba Shusong, vice-director of the Financial Research Institute under the State Council, will explore the possibilities for renminbi business. And Stanley Wong, director and deputy general manager of ICBC (Asia), will chair a panel discussion on the opportunities for foreign banks on the mainland.
"Renminbi business is one of the big areas everyone is looking at," Leung says. "They are trying to figure out a new business model to ride this opportunity and to be able to create new products."
Representatives from local governments in southern China have been invited to talk about Pearl River Delta (PRD) developments and the potential for corporate banking business and investment. This ties in with both national and provincial policy to align the Hong Kong and PRD economies more closely.
The conference will also focus on the need for the banking sector to rebuild trust. Meena Datwani, the Hong Kong Monetary Authority's executive director for banking conduct, will provide a regulatory update on lessons learned from the crisis, while Stephen Po, senior director for the Securities and Futures Commission, will talk on the latest initiatives to regulate the selling of financial products.
"Banking is a business built on trust; that is one of the keystones," Leung says. "So, during the day, we have representatives from the government, regulators and corporates, as well as HR experts and psychologists, to speak about this issue."
She notes too that if Hong Kong is to develop as a centre for renminbi business and strengthen its position as a conduit for China-related investment, it is essential to enhance professional standards and ethics. Ideally, this should see all practitioners taking the Associate of the Hong Kong Institute of Bankers qualifications and committing to continuous training every year.