HSBC sees its international reach and long-standing relationships as providing a unique advantage over its competitors as it tries to enhance digital offerings for commercial clients.
The bank can "utilize a common global architecture that leverages 150 years of data," said Edward Achtner, the head of digital banking for HSBC’s U.S. commercial banking division.
If, for example, HSBC has a “large, complex client with a global supply chain, we know through data and analytics that 60% of their business relationships are also HSBC customers, so we have the ability to bring that all together and provide finance options if needed in a seamless manner that benefits the entire ecosystem.”
Last month, HSBC Chief Executive John Flint said the bank would invest up to $17 billion in technology initiatives from now through the end of 2020. A specific amount of that has yet to have been earmarked towards digital services in commercial banking, a portion of it is expected to go it is expected that a portion of it will be.
Corporate clients are “asking for more digital services, and that is particularly informed by their daily experiences in the retail space,” Achtner said. “A corporate treasurer, for example, is thinking about moving money, and five minutes later might be on Amazon and it’s only natural for them to ask the question of why their commercial banking digital experience isn’t similar.”
For HSBC, delivering these digital experiences to corporate customers involves gathering volumes of feedback. The bank also tailors different digital services to different segments of clients, as Achtner noted its commercial customers can range from a few million to many billions of dollars in revenue.
“Across those client segments we want to get feedback on what do they need, rather than making assumptions about client needs,” he said.
Larger corporations, for example, most likely do business in multiple jurisdictions. So one of HSBC’s goals is to offer them a platform that can work in any market, Achtner said.
“We understand they may not be just looking to onboard in the U.S., but perhaps Hong Kong, Germany, Canada and Singapore as well,” he said. “We want to offer a frictionless digital onboarding experience across all jurisdictions. But it’s not just about having a great digital solution, but leveraging a global architecture understands the nuances across markets and the different legal and regulatory needs in each one.”
Achtner added that HSBC will not only seek to create new commercial digital products internally, but partner with fintechs that work in this space as well, a trend that is growing in the industry.
“In the coming months, we will very much be exploring new partnerships here in the U.S. as well as globally,” he said.
Part of delivering a good digital experience to commercial clients is knowing what best suits their business needs, he added. Customers with up to $50 million in revenue “will probably see more end-to-end digital journeys,” he said.
“As you go up the continuum of complexity and size, it becomes more about empowering the relationship manager through technology to know as much about client needs as possible. It’s still a personal business, and larger clients rely on our knowledge of a complex, changing world.”
Banks that fail to invest in digital services for commercial customers the same way they do retail ones risk falling behind, said Joe Ganzelli, a senior director at Cornerstone Advisors. Older millennials are starting to occupy senior roles in companies and asking more of digital services, he said.
“The oldest millennials are now in their late 30s,” he said. “And they’re increasingly expecting the type of technology that they’re comfortable with to also be available in the work environment.”
Overall, digital ability is becoming a much more important factor in how businesses choose a banking relationship, he said. Ganzelli recalled seeing a survey recently that listed digital capabilities among the top three factors corporate clients weighed in a banking relationship.
“Five years ago, even three years ago, it probably wouldn’t even make the top 10,” he said. “Clients have increasingly greater expectations from their financial institution when it comes to digital.”