HSBC: How tech is their transformative factor
From SAP’s point of view, the future of banking requires simplification, given today’s current scenario of crippling complexity, and evolving regulatory requirements. This already presents an opportunity for technology to play a more integral role in the financial services industry.
For the German-based business software company, financial services is one the fastest growing sectors, serving over 19,700 customers in over 150 countries, and resulting in 74-percent of the world’s transaction revenue touching an SAP system.
Already, the world is moving towards being a digital one.
According to SAP APJ’s Chief Operating Officer, Scott Russell, “Digital is more relevant in Asia Pacific because we have the geographic, demographic and populace (profiles) for it.” A general perception because of this, is that digital enterprises would be able to thrive in this region, and possibly more than in some other parts of the world.
During SIBOS 2015 in Singapore, a premier global financial services event that ended in late October, Russell also observed, “Non-banks are looking at alternative mechanisms for lending. For a lot of businesses, it has become a norm and the financial services provider, doesn’t have to be a traditional bank.
“Since traditional sources may not be the way of the future, how can traditional banks still be relevant?” he asked.
Disruption or not?
According to HSBC’s Group Head of Innovation, Christophe Chazot, technology is the most transformative factor in the finance industry. This was shared during SIBOS 2015 as well, where the head of innovation gave his views about the trends and technologies that HSBC is looking to leverage during this digital age.
As more and more digital born companies leverage technologies to disrupt the industries they play in, like transportation, retail, music and more, Chazot observes however that it is not so simple to do so in the financial services industry.
“The books and music industries are being threatened, but the bank industry is much more complex.
“We are integrated vertically as well, and we have to assemble, sell, maintain, recycle, store, deal with associated risks like privacy, trust… that’s why banks can (should) capitalise on the current situation and use technology to their advantage.”
HSBC’s approach towards navigating this digital age is via a strategy of partnerships and Chazot explained, “We have a number of initiatives we participate in through working groups, where we want to define standards.”
This is necessary towards lowering the barrier to entry and making the industry open to more players. Chazot emphasised, “You need to create standards, API (application programming interfaces), which in turn create open data.”
The key is to be able to create seamless integration with customers’ infrastructure, so as to be able to provide more services like invoice reconciliation, or alerts around data or financial organiser features.
“Banks and the financial services industry have to open themselves up to all the innovation from the outside. That is why we created the innovation team at HSBC,” Chazot concluded.
The Innovation Strategy team identifies and analyses themes that are key to HSBC’s future and the Innovation Centre, which organises internal initiatives, including incubation.