15 March 2017

Banking's digital revolution

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By Josh Bottomley, Global Head of Digital, Retail Banking and Wealth Management, HSBC

6 February 2017

From buying music to catching up on the news, technology has transformed the way we consume products and services. The same is true in banking.

Many customers still want to be able to visit a branch or use phone banking to manage their money. But the average customer now does this far less frequently than 10 or even five years ago, with more and more using mobile apps to access their accounts, check balances and make payments.

The challenge for banks has been how to harness and develop digital technology to fulfil their traditional role more effectively. That’s not always straightforward. After all, technology companies thrive on innovation and taking risks. Banks, meanwhile, have a duty to be more conservative as they focus on looking after other people’s money.

Rather than trying to invent technology, banks are increasingly working with, and in some cases investing in, technology companies. The results of these collaborations have been impressive.

Rather than trying to invent technology, banks are increasingly working with, and in some cases investing in, technology companies

New services such as contactless payments, for example, are making it easier for shoppers around the world to purchase goods and services. Online systems are helping business customers to manage their payments, cash flow and assets more conveniently.

Fingerprint ID and voice recognition software is enabling bank customers to access their money quickly and easily while maintaining high levels of security. And banks and technology companies have together shown that blockchain technology can be applied to make trade finance quicker and more convenient for exporters and importers.

Banks are also teaming up with government bodies and academic institutions. HSBC, for example, last year agreed a partnership with the London-based Alan Turing Institute, the UK’s new national centre for data science, to work with scientists from universities across the country using big data analytics to better understand economic trends.

The significant investment that banks have made in new technology also includes attracting a different kind of person. Banks are employing talented technology experts in growing numbers. They are also mentoring and working with the next generation of inventors and entrepreneurs so that they can keep pace with changing consumer tastes and developments in technology.

So far digital advances have created some incredible opportunities for banks. Technology will continue to help banks evolve in the future. Much more can be done to make processes simpler and quicker, automating tasks such as data entry so that people can focus on more complex and interesting jobs.

As an industry, banking needs to be bolder, move faster and go further: and the fact that banks are building closer partnerships with technology specialists should enable them to continue to do this.

Issued by The Hongkong and Shanghai Banking Corporation Limited, incorporated in the Hong Kong SAR, acting through its New Zealand branch ("HSBC").

The information used in preparing this webpage was obtained from publicly available sources or proprietary data believed to be reliable and has not been independently verified by HSBC or any of its group undertakings or affiliates. In particular, but without limitation, no representation or warranty, express or implied, is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, opinions, estimates, forecasts, targets, prospects, returns or other forward-looking statements contained herein. Any such projections, estimates, forecasts, targets, prospects, returns or other forward-looking statements are not a reliable indicator of future performance.

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