With so much focus now on user experience and design, investing in bank technology is taking on a new dimension, said Mary Kate Loftus, the head of multichannel for retail banking and wealth management at HSBC's U.S. unit.
"Digital used to be about coding and IT; now it's becoming a people business," she said.
Loftus has directed a $131 million investment in the bank's digital capabilities over two and a half years, as part of its effort to improve the experience of existing customers and attract more of the customer segments it is targeting for growth.
The investment led to the successful rollout of an assortment of digital initiatives over the past 18 months, including tablets for branch staff, an electronic document reader and e-sign service for branches, 24/7 live chat capability on the website, a co-browsing functionality for those using live chat, and a chatbot named AiDA.
It's for all of these efforts that Loftus was selected as one of American Banker's Digital Banker of the Year finalists.
Much of the investment HSBC made — work on the initiatives began in July 2015 — is meant to enhance service across every channel, even in branches.
Though HSBC doesn't have a widespread U.S. branch network, Loftus said its branches are "strategically located" in select large cities to serve its customer base, many of whom are expatriates and millennials.
The enhancements also aren't designed to keep people on digital channels at the expense of branches or call centers, but rather allow them to seamlessly navigate between all the channels.
"Any time we have a client in a digital channel, if they want to stay there, that's great; but sometimes they need to speak to a person, and we want to let them use their channel of choice," Loftus said.
One of the initiatives Loftus has helped shepherd is Live Sign, which is a digital signature technology that branches use for retail banking sales and service. In the year since it's been implemented, HSBC has successfully migrated nine high-volume forms from paper to digital, resulting in 35,000 forms and 7,500 credit card applications getting signed digitally.
Loftus said having to sign one paper document after another can kill the customer experience. The change means not having to tell a customer, "Wait here for five minutes while I get this paperwork," she said. While the service is currently available to retail customers, Loftus said it will be expanded to wealth management soon.
HSBC also has introduced Wi-Fi-enabled tablets throughout the entire branch network, and these are preloaded with six new apps. The most used app — called Document Capture — eliminates the need to use a scanner for digitizing documentation.
Loftus said the focus on digitizing the branch, as opposed to eliminating it, is an acknowledgment that "when people have a big financial decision to make, they want to look people in the eye."
Further, since many of HSBC's customers are foreign nationals or have lived overseas, "they may have more questions, or they may have complex international banking needs and need to talk to someone."
Read about the other Digital Banker of the Year honorees:
HSBC also has invested in its contact center for those who need some assistance but don't want to come into a branch. The contact center mans a 24/7 live chat service, and so far HSBC has successfully migrated 25% of voice contacts to live chat by making it available on its website and through mobile and online account opening platforms. Loftus estimated this this has resulted in $3.5 million in annual cost savings.
A co-browsing functionality lets chat agents see a customer's screen if given permission, which can help them solve problems more quickly. This has led to a 25% reduction in the time spent with each customer, thus improving efficiency, Loftus said.
The live chat feature has helped with online sales too. "We've seen that customers are much more likely to apply for a product if they live chat with us" than customers who just cruise the website, Loftus said.
Investing in digital with other channels in mind — as HSBC is doing — "is something more banks should be doing, and too few banks are doing," said Peter Wannemacher, a senior analyst with Forrester.
While creating digital-only services is undoubtedly important, Wannemacher said banks shouldn't stop investing in legacy channels.
"Many incumbent banks these days are tempted by the idea that they should be thinking and acting like a born-digital brand, and that is either very difficult to do or, for some, impossible," he said. "But investing in things like co-browsing and other cross-channel experiences is actually taking a strength of incumbents and amplifying it."
He specifically pointed to co browsing as "something that isn't necessarily requested by customers, but it becomes a latent demand. It can be a really powerful tool in building relationships."
Wannemacher said banks can use digital investments strategically to enhance the overall experience, rather than get caught up in favoring one channel over the other.
"It doesn't mean to say, 'Oh, the branch isn't dead and the smartphone doesn't matter,' because that can become a crutch that flatters old bank people," he said. "But they can use digital to amplify all aspects of the relationship."
Perhaps the digital innovation Loftus is most excited for is the launch of HSBC's new chatbot, which was scheduled to go live at the end of May. The chatbot is called "AiDA," and the name — which stands for automated, immediate digital assistant — was chosen from over 500 entries in a companywide contest.
"We're really excited about the chatbot," she said. "We kicked it off internally last October; it's lively, instructive and also slightly irreverent."
Loftus said AiDA initially will be able to answer "basic how-tos," but the bank plans on giving it more advanced capabilities as time goes on.
Ultimately, AiDA will be one part of HSBC's multichannel approach to serving customers in the manner they are most comfortable.
In fact, when it comes to helping customers with their finances, Loftus takes inspiration from a nonbanking technology she uses often in her personal life: fitness and exercise apps.
"I love exercise and personal motivation and all those fitness apps that do things like track the workouts you're doing and connect you with other people who have a similar approach," she said. "It's easy to relate back, because when you think about what are the most important things to people, it's usually [physical] health and financial health. The fitness apps motivate people to stay in shape, and so we can help motivate people to have good financial health. When you design for people and touch them emotionally, then that is a competitive advantage."