HSBC Holdings PLC is planning to shift services away from its branches in a push to entice more customers to migrate to its digital channels as it embarks on a massive cost and job-cutting program.
The UK-based bank, which is planning to cut 35,000 jobs to trim costs, is seeking to double its number of online customers by 2022, which could generate more revenue per customer.
Branch services that can be done online, such as opening accounts and simple investments, are increasingly handled on mobile and other devices, requiring fewer staff to meet and greet customers, HSBC head of digital transformation wealth and personal banking Kevin Martin said.
Photo: Bloomberg
The employees in place would instead focus on more complex transactions, such as family planning, life insurances and mortgage loans, while the bank would minimize paperwork and signatures wherever possible, Martin added.
This would also allow the lender to set aside more space for its customers, increasing separation and safety in the post-pandemic age, he said, adding that “all of that was already under way … This crisis has probably accelerated it.”
The shift comes at a precarious time for the global banking industry, which is being walloped by a surge in bad debt after years of struggling with very low interest rates.
Lenders such as HSBC have pounced on COVID-19 lockdowns to pick up pace for digital transformations to reduce costs in their interactions with customers.
“All the industry is going to struggle for a while in terms of margin on deposits … What I would say though is that the cost to service our customers on average will decrease,” Martin said.
In Asia, major consumer banks, including Citigroup Inc and Standard Chartered PLC, are also seeing a surge in demand for digital services for everything from wealth management to insurance.
HSBC is seeking to trim US$4.5 billion in costs over the next three years. The program was last week revived by the lender after being put on pause due to COVID-19.
“Since February, we have pressed forward with some aspects of our transformation program, but we now need to look to the long term and move ahead with others, including reducing our costs,” HSBC chief executive officer Noel Quinn said in a memo to his staff.
HSBC’s branch transformation could mark a final push to become nearly an all digital bank. Almost 90 percent of its global transactions are already handled remotely and electronically.
The bank has rolled out more than 270 digital products and features to retail customers this year, up from about 160 last year, Martin said.
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