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HSBC to roll out more digital services for firms

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THE headquarters of HSBC in London's Canary Wharf financial district — REUTERS

By Melissa Luz T. Lopez, Senior Reporter

THE HONG KONG and Shanghai Banking Corp. (HSBC) is looking to roll out more mobile services to corporate clients in the Philippines over the coming year, following a jump in its credit card business secured through digital platforms.

Michael Brennan, head of HSBC Wholesale Banking, said the bank is eyeing to level up interbank fund transfers offered to big businesses to get more firms into using digital financial services “within the next six to 12 months.”

“Close to a third of our clients’ financial services needs will be digital. Much of the work that we will be doing for clients will very soon be digital — it already has begun,” Mr. Brennan said in a media roundtable yesterday in Taguig City.

“In some cases, they will go through cultural changes to get used to non-paper based technologies, but we are already seeing corporates picking up these technologies. WE are also seeing local companies developing this.”

In particular, the Philippines has proven to be a “fast-growing” and “exciting” market for the multinational bank given its young and tech-savvy population.

Mr. Brennan said while most lenders are focusing on tapping new technology to capture the retail segment, the global bank is also making strides in terms of serving the corporate space via mobile.

The central bank has piloted interbank fund transfers in the country. Mr. Brennan said HSBC’s next goal is to offer virtual accounts for companies using this interbank transfers, which he said would allow firms to identify the payment sources and improve trade, record-keeping and fraud management.

This strategy forms part of HSBC’s aggressive push to go digital, as it has earmarked $15-17 billion globally over the next three years to develop new products, offer advanced but easy-to-use electronic channels, and capture good talents to pilot financial innovation. So far, the bank has seen good gains from going digital via the consumer segment.

Kris Werner, senior vice president and head of retail banking and wealth management, said they have seen substantial growth in their credit card client base over the past year secured through Internet-enabled platforms.

“It’s really a market-leading change… Our cards that we acquired using digital channels have risen from below five percent last year to around a quarter of the business this year,” Mr. Werner said.

“What we are seeing is because of the combination of this cash-centric mentality and demographics, we’re seeing customers move across the digital environment very, very quickly. We do see mobile really leading this change and bringing people into formalized banking sector.”

There is a huge market for digital transactions in the Philippines given its millennial market well attuned to e-commerce. Mr. Werner said roughly 65% of smartphone users make purchases through mobile, while 75% also use banking apps for their financial transactions.

However, about 80% of transactions are still being done using cash.

HSBC is also relying heavily on digital customer on-boarding and on social media to tap more customers, given the bank’s limited branch network in the country. Mr. Werner said bank resources are instead being poured into expanding the bank’s “digital footprint” to widen their reach.