Amanda Murphy on the growth opportunities in Mauritius

She met with the Economic Development Board to learn about their work, and told Investor’s Mag that HSBC wants to help Mauritius sell its story more broadly overseas. Amanda Murphy also says that the banking group’s ambition is to play a part in supporting Mauritius businesses as they transition to a greener way of operation.

(Featured in Investor’s Mag, 21st Edition)

What is the purpose of your visit to Mauritius?

If I start with Mauritius, and you know that probably better than I do, we’re starting to see a return to growth. We’re starting to see in our own pipeline, with Dean Lam the Managing Director and his team, we’ve got a good pipeline of companies who have protected their businesses over the last couple of years and are now starting to think about the next stage in their growth, whether that’s here in Mauritius, or it’s in Africa or in other parts of Asia. We are seeing, in the conversations we’re having with companies in Mauritius, an appetite for growth, both domestically and internationally.

If I look more broadly across the region, the fundamentals of the economy remain very strong, which is something South and Southeast Asia are very fortunate to have. Most countries now have, while maybe not the old normal, returned to an almost normal stage, and with much fewer travel and business restrictions. And so I think we’re very positive as a bank that the long-term trajectories for those countries remain strong. As we come out of the pandemic, we’re also seeing more and more, appetite from businesses to invest in resilient growth. They’ve been through their business operations to really assess that, to invest in growth that’s sustainable, and to ensure that the impact they’re having on the world is a more positive one as well. We’re seeing that quite well. We’re also witnessing an increase in the digital space and the connectivity and that ability to be connected.

Of course, from an HSBC perspective, that all plays very nicely to where we think our strengths are, because we’ve got an expertise in sustainable finance, we’ve invested very heavily in digital tools in the region, but more broadly, we also believe that we can use our global trade receivables solutions, but also cash management solutions for the benefit of our customers. We can help with agreed finance, we can make payments easier, and we can make international trade smoother. So all those things are on customers’ minds: making banking faster, easier, and quicker. That’s what we aim to do for our customers. If I look at Mauritius, we’re hearing enriched examples of businesses that want to trade in newer economies, in pharmaceuticals, healthcare, and renewable energy. And all of those are areas that we predict will have a lot of growth opportunities. And we know that if you think about the government, it has made a commitment here that over 65% of local energy generation will be from renewables by 2030, which is not that far away. So to get the 65% shows a real commitment from the government, and we want to play our part to support businesses as they transition to a greener way of operations.

We’re seeing growth in garment manufacturing there, Mauritian companies are expanding overseas, building new factories and employing more people. Hospitality has been an area that has been battered. It’s really taken probably one of the biggest hits. You will feel that particularly strongly here in Mauritius. But, we think that we’ll start to see a return of travelers who are hopefully going to spend money. I know that Mauritius is hoping to aim for a million travelers this year. But if we can get that comfort level back on planes, etc, again, that will be positive.

The digital economy is changing how things are done. New players are coming up. If you think about the likes of Deliveroo or Grab, companies like that, really two years ago, were very quiet, very small, and now are big international companies. So we’ll see more in that space, more in that ecosystem.

Oh, my goodness. That’s a tough one. If I look at the next five years, there are two areas where I think we will see major change. One that we’ve already touched on is digitalisation, and I think that’s really key, and banks will have to be able to digitalise quickly and smoothly. Customers want to be able to make their payments without friction. They want to be able to connect to the bank and to their finances easily.

The other area we see opportunities is in the sustainable finance arena and how that will grow. If I look at the one word that I would say will underpin banking over the next five years, it’s change. We’re going to see a lot of change. We’re seeing that in the financial services industry but also when we talk to our customers, their businesses are changing rapidly. And at the heart of that is digitalisation. All companies are becoming more digital now. We are already one of the biggest digital banks in the world. Here in Mauritius, 96% of your payments are online, which means no manual intervention at all to process those payments.

Do I think it’ll be only digital? No. What we will see will be a great marriage of the best of digital with the best of talented people serving our customers, and that’s where we see our future. We want to use technology, and we’ve invested in technology to create better customer experiences. We also want to keep them safe. We know that fraud is increasing in the banking world. So we want to make sure we’re using the latest technology to protect our customers and keep their money safe. This shift was always coming, but the pandemic has accelerated that. Customers who in the past used branches or used paper documents weren’t able to do that in countries where there were lockdowns. So those customers had to find alternative ways. So our colleagues have had to help customers learn how to do it digitally, and many of our customers have moved from paper based transactions to digital transactions quickly through the pandemic. If I look in Mauritius, specifically, almost 100% of our customers use our digital banking system. We introduced IPS, which is an instant payment system here in Mauritius. And that was to help our clients manage their liquidity more efficiently and easily as well. That was really important because what probably was the biggest learning for me with businesses during COVID was that businesses run out of liquidity really quickly. The introduction of IPS helps customers manage their liquidity. We also introduced something called “Live Sign,” which means that you don’t have to come in and sign your documents anymore; you can do it on the screen. For now, it sounds relatively simple, but for the banking industry, that was a big step forward. About 80% of our international payments are now done digitally, and that number just continues to increase.

Mauritius, as in many parts of Asia, is suffering from the challenges of climate change. They’re suffering from the risk that it poses. And I think one and a half trillion dollars are needed in Asia to combat that. So we are very keen to play our part in supporting businesses. And we’re hearing exciting plans for sustainability from many of our customers. We have earmarked a trillion dollars in finance to take us to 2030 to support and partner with clients as they transition their business and future-proof their business. We’ll see more demand for this in the future. We know that this will be a driver for growth and it will certainly be a driver for growth here in Mauritius. It will be a driver throughout the supply chain. And we’ve already done some interesting things here with Mauritius’ first ever funding program. We helped a company in Mauritius to deliver positive environmental impact by using hybrid electric vehicles, rainwater harvesting systems, and solar power for generating energy. We’ll continue to look for opportunities for that.