Financial technology (FinTech) is shaping financial services globally and financial institutions are looking for strategic answers to sustain competitive advantages. In the face of FinTech, many firms are struggling to apply innovation, but Taiwan Depository & Clearing Corporation (TDCC) has responded to the changes very early to deliver better customer experience and has been well received by the market.
The company’s effort was not in vain. Data show a 3.2-fold increase in Taiwan’s electronic voting (e-voting) by retail and institutional investors at shareholder meetings in 2016 from a prior year. The company was even invited to share its success story and achievements of improving market efficiency through applying innovative technologies.
In a year-end media gathering, TDCC Chairman Sherman Lin summed up the main progress achieved in 2016, including laying a foundation for a digitized securities depository service slated to launch in 2017, expanding cross-border custody services, promoting e-voting, streamlining online fund platform, building up anti-money-laundering inquiry system platform, and promoting philanthropy and financial education. Lin added that the financial technology solutions will be widely applied into the service in a bid to create more innovative solutions to help stakeholders expand markets and improve market efficiency.
E-voting designed for shareholder meetings by TDCC in 2009 has been considered one of the biggest breakthroughs in terms of FinTech innovations to many retail or institutional investors. Later, mobile technology has changed the game and TDCC developed an e-voting app in 2015 that linked up to 28 brokers' trading apps. The creation has made the act of voting much easier for investors and has been proved to effectively increase shareholder participation rate in the decision-making process .
In 2016, there were 604 Taiwan Stock Exchange (TWSE)- and Taipei Exchange (TPEx)-listed companies which began to adopt e-voting at shareholders meetings, accounting for 45 percent of the total number of the country’s shareholders meetings, with 980,000 votes cast. Among the votes cast, 900,000 votes were carried out by retail investors, up 320 percent from a prior year, among which 360,000 votes were completed through the voting application.
Lin indicated that the wide implementation of the e-voting has also contributed to a better quality of corporate governance, and now the company is promoting a mandatory implementation of e-voting at shareholders meetings nationwide in which more than 1,600 TWSE- and TPEx-listed companies will be subject to the new rule starting 2018.
In addition to the e-voting, TDCC is set to roll out a new e-passbook service in March 2017. With that, retail investors can obtain the updated trading information with no need to to to physical automatic machines to swipe the book for the updated information. Each investor can put together different securities accounts into one app and users can also obtain information relevant to shareholders meetings. The service will not only provide more convenience to investors but also reduce carbon foot prints by going paperless, according to Lin.