HSBC’s cost-reduction efforts have allowed the bank to up tech spend to improve workflow efficiency and customer experience.
THE BIG PICTURE: The $3 trillion, London-based bank’s three-year cost reduction program, which has now ended, included the reduction of global corporate real estate, the branch network and operations headcount, Chief Executive Noel Quinn said during the bank’s earnings call today.
“We’ve used these cost savings to increase investment in technology. … This is spending in the right place to build the business of the future and it has enabled us to fundamentally change the way we operate,” he said.
The cost reduction is set to continue as IT investment “will generate cost savings on a recurring basis as we digitize,” Quinn said.
BY THE NUMBERS: In 2022, the bank posted:
- Tech spend increased 9% to $6.1 billion year over year for the full year; and
- Adjusted revenue increased 18% to $55.3 billion.
FLASHBACK: In December 2022, HSBC partnered with digital card fintech Extend to roll out virtual card solutions and embedded payments to business clients.
NOTEWORTHY: In 2022, the bank launched its proprietary tokenization platform HSBC Orion; international credit accessibility in Singapore; embedded banking through a partnership with Oracle; and sustainable infrastructure debt financing platform Pentagreen, according to the earnings presentation.
“That technology is improving customer propositions, but it’s also improving process and digitizing processes more and more,” Quinn said.
FUTURE LOOK: HSBC will invest in greater automation to empower its people, which has already increased “our speed and agility,” according to the bank’s earnings supplement. For example, a staff survey found that work processes increased their efficiencies 6% and improved confidence within the employees.
The increase in automation is expected to produce benefits “for years to come,” according to the supplement.
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