HSBC has introduced a raft of new digital features to its core banking service recently: biometric access so customers can log on to mobile banking using a fingerprint or face recognition; voice ID for calling customer services; the ability to pay someone new directly through a smartphone; and remote cheque deposit, so you can just take a photo of the front and back of a cheque to pay it in, rather than needing to visit a branch.
This sudden flurry of digital functionality is the result of a realisation that mobile is the future of banking, and it’s a future that HSBC is determined to be at the forefront of – even if it hasn’t always been fastest in the digital race so far. As Justine Haworth, Global Head of Digital Engagement at HSBC, notes:
Different industries have started to recognize digital’s value to them at different points in time, and financial services has probably been later to the game than other industries like retail. As someone working in HSBC in digital, there have been times when it has been incredibly frustrating, when you can see what customers are wanting and you could see how their behaviors and habits are changing, but the organization itself isn't necessarily ready to make that leap and move as quickly as you think it should be.
We enable people to pay someone new now, which is new functionality for us. It was a function that took longer than it should have done to go live, tied in with the risks and security around enabling that kind of functionality. But we've got there now and it's fantastic.
Digital is certainly not a new prospect for Haworth, who has been working in the field for over 20 years, initially at First Direct. In her early days at the internet and telephone banking pioneer, acquired by HSBC as part of the Midland Bank takeover, she was involved in the development, design and implementation of its core internet banking service. Mobile was her specialist area and Haworth was responsible for delivering the first wave of mobile banking services, including text message banking and Wireless Application Protocol. Her team went on to develop the first native app in 2010:
I think a lot of people are surprised to learn that digital has been around for so long, but obviously it just being there isn't the same as customers adopting and using it.
Those early digital banking services were viewed as a bolt-on to the traditional distribution channels, the branches. We trained customers to keep using our branches and contact centers because they couldn't do as much on digital as they wanted to, because we had quite complicated security systems a decade ago, which were not that helpful.
Follow the customer
HSBC has now fully recognized the need to follow the customer, and create banking services that allow them to bank in the way that they want to, which means placing mobile at the heart of that. The next stage of the bank’s digital journey is to put HSBC banking onto a smartphone, says Haworth:
Banking is changing. We need to create a banking organization in a digital age. We're on that journey, but it's going to take a few more years to get there.
Mobiles become the center of the banking world and we allow customers to do whatever they want to do on this device. But then at the same time, where they have big life decisions to make or they're not quite sure what to do next, we then connect them into people in our contact centers and branches, where they get those human problem-solving and advisory skills.
To support the mobile push, HSBC has rolled out an assisted digital program, which sees branch staff stand next to customers and help them register for mobile banking on their smartphone; no more convoluted registration process via a contact center.
Success in mobile banking doesn’t just rely on customer buy-in, however; it also requires staff to fully support and understand the digital strategy, so they in turn can help overturn any fears or concerns customers may have. Haworth says the customer feedback from the assisted digital program has been really positive:
Customers have been saying afterwards, I wouldn't have been able to work it out myself, but now I've got over the hurdle of registration, I know all I need to do is tap a few buttons and I'm on. It’s by working hard to make those pain points in the journey less painful and being a bit more empathetic - because I think often in the past, perhaps we have been a little bit guilty because we built it, we assume everybody will understand it perfectly.
We started to pay attention to how customers are feeling and the feedback that they give us when things go wrong. And we're actually not just fixing it technically, but also making sure that the support will be more helpful.
HSBC has introduced Digital Thursdays, an internal digital education program designed to drive behavioral change within its frontline colleagues so that they can support change in customer needs. Haworth explains:
What we didn't want to do with it, is just help people understand the technical nuts and bolts of mobile banking. What we wanted to do is create training that helped frontline colleagues understand why a customer might not be using mobile banking and then help them help a customer overcome that problem or that barrier.
While HSBC is working hard to support and encourage online and mobile banking, it is also having to step up efforts to protect customers from cyber attacks. Just last month, its US division was hacked, an attack the bank said affected less than one percent of its 1.4 million stateside customers.
In response, HSBC has fortified its log-on and authentication processes, and has implemented additional layers of security for digital and mobile access to all personal and business banking accounts. It is also offering those affected one year of credit monitoring and identity theft protection.
Haworth says that part of the bank’s digital transformation has been to put in place a brand new organization and ways of working, including building security into all products and processes at the earliest stage:
One of the critical changes that we've made in relation to the ways of working is to embed those types of specialists into our cross-functional teams. So when we start to manufacture or create a new product - mobile banking, a new feature, a current account journey - we actually have experts from fraud, from data, from conduct who are basically helping us define and design what we're going to put in front of the customer. So it's almost inbuilt from the outset. Historically what used to happen is it was very, very siloed.
At the same time, we've got dedicated teams of people within our technology organization, who are looking at things like system resilience and contingency. And then before we actually even ship products to our customers, there's a whole raft of user testing that has to happen before it gets put in front of a customer, which includes are all the words spelled properly on the screen to penetration security testing to ensure that the code can't be compromised.
One of the most pressing elements of the bank’s mobile-first journey is filling more than 1,000 digital vacancies, from UI designers and product managers to software engineers and solution architects. Haworth notes that HSBC is particularly keen that these roles are as attractive and open to women as they are to men, and the bank has spent time updating job descriptions to work towards this aim:
There is a dimension to our recruitment activity, which is around ensuring when our recruitment partners go out and create shortlists, we are being presented with an equal number of female candidates. They then go through a recruitment process with people who have had unconscious bias training, with different types of interviews so that we understand what people are really bringing rather than what they’re able to tell us in an hour based on their CV.
However, HSBC is more than aware that to fill such a significant number of vacancies, it will need to create an environment where existing staff can move into these new roles, as well as attract external talent. Haworth concludes:
We're an organization of over 200,000 people; you're going to have to re-skill and retrain. You can't just move a whole swathe of newly qualified people into those roles and have absolutely no corporate memory or knowledge of banking.