HSBC spends US$2.3b on digital platforms, AI and new technology to reach tech savvy customers

Bank has also teamed up with WeChat to communicate with clients on messaging app

PUBLISHED : Friday, 06 April, 2018, 12:04pm
UPDATED : Friday, 06 April, 2018, 9:49pm

HSBC has spent US$2.3 billion on enhancing its digital capabilities globally. Between 2015 and 2017, the bank created new platforms and partnered with technology companies such as Tencent’s popular messaging application WeChat to serve its clients, Vivek Ramachandran, head of growth and innovation for HSBC global commercial banking, said in an interview with the South China Morning Post.

“We have found that an increasing number of clients like to use new technology to conduct bank transactions in a secure and transparent way,” said Ramachandran.

The bank has invested in various digital platforms, artificial intelligence as well as other technologies to better serve its retail and commercial customers.

Besides its own innovation, Ramachandran said, the bank had also formed partnerships with other companies to provide banking services.

HSBC has allocated US$200 million globally for investment in fintech and enterprise start-ups, and have a number of successful partnerships such as that with WeChat.

“Customers want to communicate with the bank in a more convenient way. Enabling them to access more banking services via WeChat is an important part of our digital strategy,” said Ramachandran. WeChat hit 1 billion users last month.

In mainland China, HSBC is one of the first foreign banks since 2016 to allow retail customers to access services through WeChat, which lets them make payments, deposits and transfers around the clock.

Standard Chartered to plough more cash into digital banking, says Hong Kong chief

The bank last year expanded its WeChat services to allow commercial banking customers in Hong Kong to receive notifications through the messaging platform as an alternative communications channel.

The WeChat notification service has also improved HSBC’s ability to alert customers to potentially fraudulent activity in their accounts. Furthermore, customers do not have to worry about not receiving SMS notifications when they change their SIM card.

The bank has supported The FinTech Innovation Lab since 2013 and has participated in Hong Kong, London, Dubai and New York. The programme invites entrepreneurs to pitch their fintech ideas to banks.

Ramachandran said the bank will also develop blockchain and AI capabilities to handle hundreds and thousands of invoices and trade documents.

“Clients want a simple and easy way to track their transactions. They want to reduce the amount of paper used and they want to access information instantly. This is where blockchain and AI can help,” he said.

He said clients have responded positively to HSBC’s digital moves in recent years. “Over the past three years, globally an additional 1.5 million customers have started to use HSBC’s digital banking services,” he said.

Hang Seng Bank deploys fintech to simplify mobile banking, mulls use of facial recognition at ATMs

Use of the bank’s mobile app, HSBCnet, increased by 55 per cent in 2017, and was up by 60 per cent in terms of value payments. Over the past five years, the bank has seen a 333 per cent increase in mobile banking customers. The bank also allows “Touch ID” logins for the HSBCnet app in 37 markets.

Customers want to communicate with the bank in a more convenient way
Vivek Ramachandran, head of growth and innovation, HSBC global commercial banking

The bank is also working with IBM to develop a solution that combines optical character recognition with advanced robotics to automate trade finance processing, which would make global trade safer and more efficient.

“While this type of automation improves accuracy and processing times, it’s important to remember that each transaction still needs to be reviewed and assessed by two trade professionals,” said Ramachandran. He said technology would not replace human interaction.

“We’ve seen 5,000 customers ask our chatbot ‘Amy’ more than 115,000 questions. While Amy has been a great success with the customers, they still want to talk to a real person to solve more complicated queries.

“The successful implementation of advanced robotics and cognitive technology frees up staff for more value-added activities, and we are actively re-skilling these employees,” said Ramachandran.