“The average customer logs on around ten to fifteen times per month, which is clearly more frequently than people typically interacted with their banks on a face-to-face basis. From this perspective, most digital services should be looked at less as a replacement for face-to-face banking and more as an additional service that can supplement face-to-face interactions, but primarily elevates the entire experience.”
Insightive.tv: Can you begin with an overview of your commercial banking onboarding process?
Richard: Business banking and corporate clients make up two key segments within HSBC Commercial Banking, where we seek to provide distinct propositions. We operate within over 50 markets around the world, leading to a degree of variability within historic systems and processes. We are investing heavily to improve these.
For example, with our UK Business Banking clients, we have an omnichannel onboarding system available which onboards tens-of-thousands of customers every year. This is something in which we have invested heavily in recent years, and are currently rolling out to Hong Kong. Last year, we launched the capability to provide identity documentation either by webcam or mobile app. Currently, about half of our SME customers choose to utilise the fully digital options and the other half come into branches.
For our corporate customers, we are in the advanced stages of rolling out an international account. Onboarding corporate clients is a more complex process given typical extensive legal entity structures which can cross a number of jurisdictions. Our current goal is to significantly streamline the information provision digitally, particularly where a client wants to open accounts in multiple markets. It is critical to have a common, consistent set of information requirements internationally, with local addenda only where required by local regulation. This process is currently live in over 20 markets, with roll out to the rest of our network during this year.
Insightive.tv: How do you see the contracting process changing over the next three years?
Richard: There are differences between what you might call KYC, account and channel set-up, and specific product and service fulfilment. Within those categories, there is a whole range of things worth looking at. For example, we are working to ease the lending process by digitally extracting financial data from clients’ accounting systems and also rolling out e-signature capabilities. More widely, with a lot of our products, we are looking at ways to take the experience that a client would have previously received in a series of face-to-face meetings and digitise that interaction to dramatically increase speed of delivery while keeping the human interaction.
One of our initiatives, called LinkScreen, is designed to do just this. We launched a UK pilot of this program in 2015, with new markets to be introduced in the future. The staff member is both able to communicate with the client and digitally walk through, for example, the pricing and facility documents, in an environment in which the client can download and e-sign the documentation, then and there — no matter where in the world they actually happen to be. This allows clients to receive the customer service they would get coming into a bank, but on a much more as-needed-basis. With this program, we have seen reductions in fulfilment time as high as 70%, depending on the particular service. Customer satisfaction on this service is excellent at an average of 96%.
Insightive.tv: Do you see end-to-end digitisation as the universal goal — or do you always see a client need for in-person interaction?
Richard: I think our business always has to be about client needs, and this applies to digitisation like everything else. There are segments of clients that want an in-person experience, and we will continue to provide that.
For example, internet banking has been common for two decades now, and around two-thirds of our customers use our internet banking services across SMEs and corporates. The average customer logs on around ten to fifteen times per month, which is clearly more frequently than people typically interacted with their banks on a face-to-face basis. From this perspective, most digital services should be looked at less as a replacement for face-to-face banking and more as an additional service that can supplement face-to-face interactions, but primarily elevates the entire experience.
An important distinction should also be made between providing self-serve processes and entirely automated processes. For example, there is a lot of information that needs to be collected from a customer as part of onboarding. Where that information is publically available, through Companies House in the UK for example, that can be automated. But, for many businesses, a lot of required information is private. Unless better central registers collating information such as beneficial ownership become available, or a digital identity scheme for businesses is created, then full automation isn’t possible.
Insightive.tv: How much of the drive towards digitisation has come from increased competition — has this affected your priorities?
Richard: Competition has ratcheted up within the last few years. All of our competitor banks are investing quite hard — both big banks and challengers. Then there are a number of non-banks that didn’t exist five years ago, that are entering the market for payment and lending services. Setting up core banking services that ten years ago may have cost ten or fifteen million pounds, can now be done for hundreds of thousands — the market is evolving and there clearly is competition coming from FinTechs. However, some of these new entrants can find it challenging to reach a large enough volume of customers to be self-sufficient. This has led a number of these providers to increasingly seek to enter into partnerships with larger banks, which is something we are open to. For example, we invested in Vizolution last year, which underpins our LinkScreen capability.
Overall I think that it is a rapidly evolving landscape. The one thing that I think you can guarantee is that customers will win off the back of this. The competition has spurred innovation and a forward thinking mindset that has almost never previously existed in this industry. Each player has a vantage point on the substantial change that is happening in the industry, and from my perspective, it is something of a privilege and unique opportunity to operate and provide services within the number of different countries that we do at HSBC.
Richard Davies is HSBC’s Global Head of Propositions, Commercial Banking. Richard joined HSBC in 2014 with almost two decades of executive experience in financial services. Richard has been tasked with using this unique skill-set to deliver strategic digital transformation of client experiences at HSBC. We spoke with Richard to gain insight into how HSBC is changing to meet the evolving digital landscape.
Headquartered in London, HSBC is one of the world’s largest banking and financial services organisations. With around 4,000 offices in 70 countries and territories spanning Europe, Asia, North and Latin America, the Middle East and North Africa, HSBC services a worldwide customer base and is digitising the banking experiences of millions.
Part of THE DIGITAL FUTURE OF CUSTOMER CONTRACTING series