Monday, February 22, 2016

HSBC Banking Goes Digital

                 HSBC, One of the world’s largest banks, has recently begun implementing a new business structure in hopes to reduce their workforce by 25,000 people resulting in $5 billion worth of savings. Discussed recently in an article written by the website Diginomica, HSBC believes many of its lower-level jobs can easily be replaced by automated systems and newer technology resulting in a more efficient and cost-effective business structure. However, HSBC is highly aware of the risks involved in going automated, and in order to attain the cost savings they are seeking, it’s going to take tech proficiency and plenty of patience.
                  In the words of HSBC’s Chief Executive, Stuart Gulliver, the new automated systems will “refocus the business for stronger, sustainable growth”.  According to the bank’s latest annual report, they’ve seen a 1% growth in profits in an otherwise down-trending cycle which the bank dedicates to their new technology. So, what exactly is HSBC doing correct? According to Gulliver, their dedication to invest in advanced digital systems for the company is already paying off, and they’ve only been doing it for a year. HSBC estimates that their total investment in these systems may amount to over $1 billion by the time they’re finished, a risky move which needs to show benefit. Subsequently, HSBC wasn’t shy about boasting in the annual report which states that they’ve already reduced their workforce by 3,000 roles in 2015 and have achieved a 4% cost reduction in the IT run rate compared with 2014. HSBC isn’t reluctant to promote digital banking on their website either. In fact, digital banking is listed first under their “Ways to Bank” tab. This is a true sign of their attempt to appeal to customers interested in convenient online banking, much like what their competitors are attempting as well.    
 However, with all this celebration of the numbers, HSBC didn’t forget to address the problems they may soon encounter. The article on claims HSBC’s biggest risk is with ensuring cyber security. While transitioning to a more automated system presents a large business opportunity for HSBC, it also presents a theft opportunity for cyber criminals. Quoted in the article, HSBC notes that they’ve already made progress in increasing their security, however they admit it can always be better.

                While the article does a sufficient job in interpreting HSBC’s endeavor to go digital, it lacks a mention of the cons associated with customer interaction with automated machines. While technology is great when it’s working, it can be hellish when it’s not which is something customers recognize. HSBC is certainly going to run into digital failures which it has not experienced, and with other banks being far more experienced in the digital category, customers seeking an online bank may not be convinced to choose HSBC just yet.  

Preez, Derek Du. "HSBC Automated Nearly 3,000 Jobs in 2015."Diginomica. 21 Feb. 2016. Web. 22 Feb. 2016. <>.

1 comment:

  1. Hey Lewie,
    This was an interesting article that makes us really think about the possible pros and cons of digital banking. I think digital banking is a great feature and very easy and efficient. I use digital banking myself to deposit checks and to transfer money between accounts. This is much easier than going to a bank or ATM and it save a lot of time for people, including myself. Something that struck me was the amount of people that have lost their jobs since the implementation of digital banking. 25,000 is a lot of people but if it saved them 5 billion dollars I guess it was pretty cost effective. What I also like in this article is that HSBC is very confident and has a lot of faith in their digital banking when it talks about them boasting about their annual reports. This shows that they realize the risks they are taking by implementing a digital banking system but have confidence that it is the right move and will benefit them in the long run. I think you make a very good point when you say that the article fails to mention that technology itself has flaws and this could greatly affect the digital banking. If the system crashes, there can be many problems and it is up to HSBC to have a back up plan in case something like that were to happen.


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