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Banking at the Speed of Light

For 150 years, HSBC has aspired to be the world’s leading international bank. We have a long track record of creating financial innovations in banking services, and today we’re working to create more amazing experiences for our customers by transforming banking through digital technologies.

Digital technologies are pervasive. This is especially true in Asia where modern life is being transformed. From food to baby supplies to technology products, more than 90 percent of purchases are made online. Digital technologies represent a tectonic shift in global commerce that cannot be ignored. Significantly, 74 percent of Chinese people say they are willing to consider a purely digital bank — and that’s what we are working to create.

About a year ago, our CEO outlined a strategic plan for the next three years, and two of these priorities were relevant to my role in IT. One priority was to restructure the cost space of the bank by fundamentally digitizing everything in the organization. As a result, we are on a mission to digitize every customer interaction and every banking process.

My objective is to eliminate the use of passwords forever. Remembering them is taxing, and biometrics actually makes customers more comfortable. Today, smartphones incorporate touch ID and mature voice recognition technology.

In fact, in the U.K., we are now using voice recognition in our call centers. If registered, you can speak to an operator in your natural voice and convey what you want. Our operators will know who you are and will have access to your accounts. This improves the customer experience, enhances control, and reduces costs. We have launched Apple and Android Pay services as well as China’s WeChat integration in the Pearl River Delta development.

As you can tell, banks will look very different in five years. There will be no paper and no passwords, and customers will enjoy exceptional banking experiences. Value-added messaging will be delivered through mobile channels, in real time, providing timely, accurate information to customers while they are on the move, allowing them to run their lives in more efficient and interesting ways.

Getting there will require some re-engineering of older technologies. Our core systems are 40 to 50 years old. They are, however, robust, functionally rich, scalable, well supported, and do a fantastic job. As such, we can’t just shut down the bank and replace those systems with new technologies; we need an integration layer that delivers data for digital customer experiences. This vision means a major architectural revolution, requiring 7,000 applications and 40,000 IT personnel spread around the world.

At the heart of this architecture is the cloud, which is fundamentally changing the banking business. We are working with various models and providers: private cloud, public cloud providers, and Software-as-a-Service (SaaS) providers. Cloud providers enable much faster delivery without the need to actually run any infrastructure or software because it is all consumed through a SaaS model. Our partners and regulators are helping to ensure that we have a secure, resilient cloud capability. Our huge organization is broken down into teams, a major shift that requires an effective infrastructure. We need high-performance collaboration tools, video and voice communications, and electronic Kanban boards — anything that helps bring the agile methodology to life.

The only way to ensure success in this journey is a strong partner ecosystem, and our partnership with Huawei has been remarkable. We must work with partners, like Huawei, who have at their core a technology heartbeat and a long-term commitment to research and development. If Huawei is successful in developing all of the exciting new technologies referred to in this article, HSBC will be an avid consumer, because technology is fundamentally transforming the global financial services industry.

(Source: Huawei Connect 2016 keynote speech, Shanghai, China)

By Darryl West

Group CIO, HSBC Holdings plc

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