Globally, retail banking is undergoing a major transformation due to new technologies, competition from fintech firms and millennia of technology-savvy. However, it is not that the traditional banks are becoming obsolete. They are gaining momentum by digitizing their processes, by keeping applications in the cloud as much as possible, and by partnering with Fintech to offer customers a frictionless ride. Indeed, the outbreak of the epidemic has further accelerated the digitization journey of banks.
In an exclusive interview with Anand Adhikari, Managing Editor, Business Today, Nuno Matos, HSBC’s Global Chief Executive of Wealth and Personal Banking, discusses the changing face of retail banking. Excerpts from an interview.
BT: Tell us what kind of transformation is taking place in global retail banking?
NM: Most banks worldwide, and of course HSBC, are already digital banks. Today, 93 percent of our global retail and resource transactions are through digital channels. In fact, we are much more than a digital bank. That is the difference. We believe in a model where we offer our best advice combined with the best-in-class benefits of a digital experience. This is our model.
We believe that to be relevant to our customers, to be the most relevant financial services provider, we need to bring people and digital together. It just can’t be digital. It also depends on the department you serve. Some sections, naturally, are served more digitally. Where other departments demand more banker and relationship managers interaction. Our model is a hybrid model that combines the best human advice with the best of digital and technology. And it is important to understand why.
We strongly believe that technology and digital platforms bring many benefits. It allows customers to bank on their terms, wherever they want, when they want, but trust, which is what we believe is all about our business. A high level of trust. Belief is about people interacting face to face with our customers. It is a model that has the best people and the best technology This is what we believe. It goes without saying that more transactions will be converted to digital. Our strategy is very simple. Customers can do whatever they want on mobile. We call this mobile first method.
BT: What kind of behavioral changes have you noticed in consumers since the epidemic?
NM: Customers have certainly accelerated their digital adoption. It goes without saying. What we saw in two years was probably the equivalent of that [digital adoption of] The previous five years. Over the past two years, we’ve significantly accelerated customer acceptance, both in terms of how they’re opening an account, becoming more digital, or part of our sales now coming through digital platforms via mobile, or payment and balance advising, servicing transactions that go digital. That was a tremendous acceleration.
There are other trends towards investment. We see customers becoming more sensitive to sustainable investment themes. Consumers have linked the epidemic to a world that is not sustainable with a non-green world. And the epidemic had the effect of calling for a more sustainable world. We’ve seen our clients want to invest more in sustainable investment opportunities. They want to influence the transformation of the world into a green economy. Consumers have also become more concerned about their well-being, their health and well-being.
BT: Are there enough investment opportunities in sustainable themes?
NM: We are launching a number of funds that are primarily invested in companies that are transformed into a green way of manufacturing and a green way of managing their carbon footprint. We are offering green mortgages in some markets. We are offering electric car financing. On the one hand, we are helping our clients finance their world transition using their investments. And also, we are financing our customers to improve the quality and durability of their property, such as their house, car etc.
BT: Can you name some destinations or countries where banks are offering sustainable investment themes?
NM: We are doing this in places like Hong Kong, UAE and Egypt. This is to give you an idea of the countries where we already have green debt products. In terms of investment, we are offering it all over the world wherever we work.
BT: What do you see as the global trends in branch expansion and recruitment? Digital is definitely going to reduce the intensity of the retail business branch and people. Your comment?
NM: Global, the trend is clear. Branches in most markets are reducing their numbers. This is simply because customers are changing their behavior, as simple as that. Customers are going low in both the branches. As I said, for some very obvious element of their financial life, they still want face-to-face interaction or human touch. There are many ways you can combine humanities with banking relationships. So worldwide, that’s happening. I am sure that over time, those trends will come to the market like in India. But again, we believe that the combination of physical distribution and digital distribution is the key. We will continue to invest in equipping our branches to sell to our customers.
BT: How do Indian activities keep pace with the digitization journey and global support?
NM: In India, we are on a very clear path to grow and improve our services It is one of our top four markets in Asia. HSBC is the World Bank of Asia. We are very committed to the four major markets of Hong Kong, China, India and Singapore. India is one of our top four bets in Asia. And we’ve been investing a lot of resources in our digital capabilities, people’s capabilities, our platforms for customers and especially in terms of recruiting people. You can count on our services to continue to make significant improvements
BT: Are banks partnering with Fintech for new technological capabilities and to reach new sets of customers?
NM: Fintechs, in our opinion, is a good force for customers. They are bringing better customer experience. We want to partner with Fintech so they can add their journey to our mobile app. And we’re able to provide more efficient, more efficient, faster, better customer journeys. We see them as competitors. We also see them as partners because, many times, by combining the two capabilities, we are actually serving customers better. So, we see them as a force for good because competition is good for customers. And partnership is good for customers. That’s the way we see them. And that is, I think, how customers see them too.
BT: Does the bank have a unique fintech partnership worldwide?
NM: We constantly partner with Fintech when we want to improve our journey. I’m not going to give any specific quotes, but I’m going to tell you that, for example, in order for you to be able to manage your credit card on mobile, we’ve partnered with some fintech in some markets, which allows us to collect multiple data from customers and our Allows to block or unblock his card on mobile. Also, the bars have features like blocking card usage We are combining many trips from Fintech on our mobile rides to offer customers more powerful. This is how we see them as partners.
BT: We’ve heard of many robot advisors in asset management. Tell me about taking Robo Advisor?
NM: We again believe in robotic advice as a combination of human advice. Robo Advisory is more than enough for mass markets and emerging affluent places because it usually does not involve human advice. You profile yourself, answer some questions and then the model will recommend investment based on profile. We do this in some countries. However, we supplement it with human advice. I see Robo Advisory as a component of banks advising their clients on what to invest. But this is not the only one And I must say our model, it’s just a component.
BT: How acceptable is the regulatory system towards new technologies like blockchain? Is the regulator before the curve?
NM: I think the regulations have been very progressive in allowing market development. We see many great developments in the Indian market. I fully acknowledge that there is a desire to have a progressive approach to financial services
BT: Have you seen some fintech players scale up and emerge as big players in the financial services market?
NM: We are highly relevant to our customers. Why? And it’s important to compare. We lend to their needs. We lend on mortgages, cards, personal loans, etc. We manage our clients’ investments, including savings and investments, mutual funds, equities and bonds. We allow all that. We protect their families, their lives and their property through insurance. We are highly relevant to our customers. And we do it through human channels (public consultation) and digital channels. This is what makes us so relevant to the lives of our customers.
For a fintech to be relevant, they need to expand their services in the same way. I’m sure they will. Some will convert from mono line products to multi-line products. Others will not. There is space for different models. We believe that our model is very relevant to be a 360-degree provider to our customers in a multi-channel manner. We are world wide in terms of products. This is our model.
BT: Tell us about HSBC’s strategy in India.
NM: I think it is important to determine where HSBC wants to compete in retail and resources in India because the strategy then defines what you will do and our strategy is very clear. We want to be the leading international bank for the rich and high-net-worth population in India. And when I say rich, I mean rising rich, mass rich, rich and high wealth. That is our goal. That’s where we believe we have the right to win. We have no right to win in other divisions. So that’s where we want to compete. And tied to that opportunity, we want to be very present to bring Non-Resident Indians (NRIs) back to India to invest in their country. And for these parts, we provide asset lending and transaction related services, including payments, cards, etc. We want to be a complete financial services provider in this department
BT: In India, foreign banks are coming out of retail banking. Your comment?
NM: We are highly committed to the Indian market. We have a very clear strategy. And this is the key. We know strategically where we can win [and] Where we can provide the best-in-class service to our customers. And in India, HSBC being an emerging rich and high network, these are the three segments where we want to be the leading international bank.
We believe we can succeed. If we provide the best digital service in class, which is important in India. India has jumped into many markets of the world. And now it is one of the most advanced mobile players in the world. We have to deliver that quality. At the same time, we have the best, best products on the advice of class people, which are made in many parts of the world. So, we have all the ingredients that a global player can bring to the Indian market.