London-based HSBC is deploying gen AI initiatives to drive efficiency and consumer engagement with new products.

The $3 trillion bank is adapting to new economic realities driven by technologies like AI and gen AI, Chief Executive Georges Elhedery, said today during HSBC’s fourth-quarter earnings call. 

In 2025, “our flagship initiatives will focus on improving customer service through both our mobile apps and our contact centers,” Elhedery said, adding that the deployment of tech for customer experience will also help the bank improve its capital expenditure efficiencies. 

The bank aims to deploy gen AI for: 

• Better technology productivity with coding assistants; 

• Improving process efficiency in onboarding, KYC and credit applications; and 

• Protecting customers against fraud and cybercrime. 

The bank reported operating expenses, including technology, at $8.6 billion in Q4, up 0.5% year over year, according to the company’s earnings report. 

THE BIG PICTURE: The bank is executing a multiyear restructuring effort and aims to exit certain geographies and close multiple business lines in order to focus on growth. 

“We are committed to deliver $1.5 billion of simplification savings from our reorganization … by the end of 2026,” Elhedery said. The bank aims to redeploy the savings to its growth markets in Asia to grow its wealth management business, he added. 

HSBC sold its Canadian operations to RBC for $10 billion and acquired Citi’s wealth business in China for $3.6 billion in 2023. 

The bank announced last month that it is absorbing its cross-border payment app Zing and will offer those features as one of its core products, Elhedery said. 

“That accelerates our acquisition of international customers,” he said. “There’s a lot of potential we can get there and that is a much faster gain than trying to build it from scratch in an area where we have non-customers working with a different brand than our very strong brand for HSBC.” 

Other major financial institutions including Ally Financial, Citi and Goldman Sachs are also undertaking multiyear restructuring programs to streamline operations. 

BY THE NUMBERS: In Q4, HSBC reported: 

• Revenue of $11.6 billion, down 11% YoY; 

• Net interest income of $8.1 billion, down 0.7% YoY; and 

• Customer deposits of $1.6 billion, up 4% YoY. 

OF NOTE: HSBC suffered an outage for its online and mobile banking services this month due to an undisclosed reason. The bank did not provide further details about the outage. 

Other FIs, including Capital One and Lloyds, have also reported outages this year. 

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