How is Digital Transformation changing HSBC's strategy?
3.5 years ago our underlying functionality wasn't shabby but we were really hard to do business with. So our mantra for the last few years has been to be simpler better and faster. A lot of that is about access, we're one of the biggest users of biometrics in the world, so touch-id, voice-id to make it easier to access products. Our people have done a fantastic job of surfacing good functionality and making it easier to use. HSBC's apps have gone from 1.5 stars to 4.5 stars in the app store in the last few years.
Our Chinese app is the same as the other global apps, but has a proper Chinese interface, it looks and feels like Ali or We. I'm really proud of what they've done and we've done the same in the corporate space. Our customers are thrilled with it and our frontline colleagues are happy because they don't have to apologise for the app anymore.
We've done tons of digitisation, back-end stuff on robotic automation, machine learning, AI, we're whittling away at the big old machine and trying to get it modernised as fast as we can.
What inspired HSBC's focus on apps that provide real customer needs?
For us it's super important that we dominate that social payment space. For our customers, we dominate such a big share [in Hong Kong], we've got to be at least as good as all the things everyone else there uses. Ali's ubiquitous, WePay's ubiquitous. We've got to be at least as good as those guys, it's a really high bar and it forces us to be really good and push really hard all the time. That competitive threat pushes you to be better and faster all the time.
How are you moving forwards as an organisation and integrating new technologies into the business?
It's not as hard as changing an engine in mid-air, we're so big and complicated that we can pick off an area and test it there. We're not one bank in one country. So we can do a trial in a big market, prove it works and roll it out elsewhere. It makes things so much better, the risk of not doing something is as high as the risk of doing something. It's not easy, it's a systems integration job these days.
We're famous for knitting things together from scratch but that's not the way to go. I really think HSBC is one of the best places for fintechs to come and get rich. We have loads of $50 million, $100 million, $200 million problems. If we can find someone gifted and cool who can help us fix that, I'm more than happy to write them a cheque instead of doing it myself. My engineers would love to do it but we don't need to do it all ourselves.
We want to pick great components, put them together and use our skills to integrate it. We really don't want to invent technology at all. We want to exploit it on behalf of our customers, that's what we're about. We integrate lots of fintech components. The issue is finding things that work everywhere.
If I had a dollar for every "I've got the answer to all your problems" I'd be retired already. Equally, people say to me "I've got the best whatever" and they may do, but I need it to work in 67 countries, I need it to work in different regulatory regimes. So, sometimes we use not quite the best technology but it's the best technology that works everywhere. I can't have multiple biometric solutions and cybersecurity answers. I need to choose the best fit across. Sometimes you have to have best of breed.
How Does Access to Larger Testing Samples Affect Choices?
It's both good and bad, the hard thing is I need to find things that can work everywhere. I can't take a single country to the cloud. I need to take a slug of my data centres to the cloud and lift a bunch of components across countries. It'd be lovely if everyone had the same rules and regulations for how that works but it doesn't work out that way.
We're leading the way to try and get alignment across the regulatory regimes on big chunks of what we do. The first thing we'll do is probably our analytics stuff because that doesn't have identifiable information, that's much easier when you consider things like GDPR in any particular jurisdiction. We go at it a chunk at a time, but trying to be consistent across the countries, trying to go across a country at a time is just too hard.
How Are You Adapting Your Model to PSD2 and Open Banking in the UK?
We see open banking as massive opportunity, we need to press on with it in our home markets, like Hong Kong, Mexico, and the UK. But it needs to be done everywhere. We have a relatively small share in lots of the markets we operate in. On some level we're almost an attacker in those markets. If our digital stuff is as good as we think it is and we can make it open we should win just as much as any fintech.
There's no point taking a negative attitude, it's going to happen. Yes, it's happening in the UK first-ish, but it's going to happen everywhere. We're well ahead of any legislation, we went open in France last year using fintech components to do that and see how it'd work. We're now applying the same logic here in the UK. We've got our normal app for HSBC customers and we've got Connected Money, which allows you to do your everyday banking, not just across HSBC but with other banks.
If you put all the functionality into one app in a long stack it's just too hard for customers to use. So we created an everyday banking app. The feedback from customers is that if they want to do more complicated things like mortgages and wealth management, then they're happy to go to a specific app for that.
Andy Maguire has even more to say on diversity, bringing more women into finance, and how strides made so far are a start but simply aren't good enough watch the video below or on YouTube. You can listen to the full interview here for even more insight. Don’t forget to subscribe to the Fintech Insider podcast.