The British Multinational financial service company, Hong Kong and Shanghai Banking Corporation (HSBC), has announced a decision to drastically downsize its staff in a move aimed at shifting business towards digital finance. The company has been preparing to adapt to the current digital finance changes in the banking industry for quite some time.
Back in 2017, the bank appointed a panel of advisors that would explore various ways to integrate advanced technologies like, artificial intelligence, biometrics, and block chain into the banking system. This was aimed at lowering the bank’s cost while at the same time enhancing its customer service delivery systems.
On the 18th February 2020, in an earnings call held by HSBC, Noel Quinn, the group chief executive, announced that they had a plan to cut thirty-five thousand (35,000) jobs and a hundred billion dollars ($100) in risk-weighted assets by 2022. This would ensure that the company was in a position to focus their investments in digital systems. By cutting down staff and reducing their branches, HSBC would manage to simplify its operations and improve its service provision.
Quinn further added that, when it comes to retail banking, HSBC would expand their products offering and also increase their digital investment. In the next three years, the company will shift focus to its retail banking to enable it to serve global clients and reduce its branch network by approximately 30%. He assured that the company would continue to invest more in digital systems and any other solutions that would improve the services they offer to their clients. During the earnings call the CEO said
In Retail Banking, we will expand our products offering and increase our investment in digital. We’ll refocus our Retail Banking presence to serve globally mobile clients, reducing our branch network in the US by around 30%. […] We will also continue to invest in the digital systems and solutions that will improve the service we offer our clients.
According to previous reports, HSBC has been examining a new block chain-based custody platform technology, named Digital Vault with the intention of implementing it in March 2020. In the effort to adapt the Digital Vault, the company plans to move assets worth $20 billion to the blockchain based platform to digitize their paper-based records of private placements.
As at now, the paper-based process is associated with complicated access of documents, is time consuming and lacks standardization. The digitization will help to standardize records and speed up the processes by reducing the time needed to do inquiries in the industry. It will also allow investors to track their securities that were bought by private markets in real-time. This will give the company a competitive edge in the growing industry.