Business & finance Science & tech

Back-pocket banking

Having retired its strapline, HSBC is shaking up its strategy, but how can its customer relationship management develop in line with rapidly changing times? Chris Clark, group head of marketing, explains how the bank is striking a balance betwen appeasing tech-savvy customers and keeping their data safe.

In recent years, HSBC has gone through a raft of changes. First, CEO Stuart Gulliver announced stringent cost-cutting measures, slashing its retail banking operations across the globe. Secondly, the bank dropped its longstanding strapline. No longer purporting to be ‘The World’s Local Bank’, HSBC has embarked on a review of its global strategy, placing its creative tactics in contention.

Guiding this transition is Chris Clark. As group head of marketing (formerly head of marketing and customer experience), he is integrally involved with the company’s brand positioning and is spearheading the review. He also oversaw the launch of its latest advertising campaign, which envisages business scenarios ‘in the future’.

Given this marketing nous, it is something of a surprise when he professes ignorance of ‘SoLoMo’. I’ve asked how the SoLoMo revolution has made itself felt at HSBC, and am anticipating a lengthy rundown. After all, if anyone should have the scoop on ‘social, local and mobile’ – social media, locally targeted information and mobile devices – it’s the man behind the bank’s strategic reinvention.

Of course, Clark is fully clued up on all these principles – he just doesn’t use the portmanteau. It quickly becomes clear that he is not one for cringe-making buzzwords, preferring to take a realistic industry appraisal that acknowledges pitfalls and opportunities in equal measure.

“One of the things that’s happening in all services industries is that customers are finding it easier to do things for themselves, and compare notes,” he says. “That gives the customer power. The business needs to be able to listen and respond within these kinds of situations, effectively and responsibly.”

Banks’ changing role

Traditionally, customer service was accomplished via personal interaction, but with the dawn of internet banking the need has been reduced. Because so many processes have been streamlined, the role for branches and call centres is changing, skewing away from simple enquiries and towards more nuanced conversations.

“Our call-centre traffic usually consists of more difficult kinds of transactions,” says Clark. “You don’t really ring the call centre to find out what your account balance is; you contact the call centre because you’ve got a mortgage inflow and you want to figure out whether your solicitor’s documentation has arrived. So, longer calls are required, and we can’t just use some robotic set of individuals that we find at lowest cost.”

Branches too must adapt in line with the times. The trend is towards greater reliance on automated machinery, freeing up staff to spend time on specialised areas. Ultimately, this will affect interior layouts, necessitating more conference centres and fewer thick-glass screens.

On the floor, gadgets will attain a new importance. HSBC recently ran experiments in which floorwalkers were equipped with iPads. Basic enquiries could be addressed in seconds, while knottier topics were escalated to the meeting room.

What we are looking towards is a multiplatform model in which transactions are not confined to any given channel. While there will always be a place for face-to-face dialogue, everything from tablet banking to Twitter may help users cut corners in between. For its own part, HSBC has developed various initiatives to help reach customers better.

“We’ve been pioneering the ability for C-suite folks to sanction payments from their mobile phone,” explains Clark. “In places like Hong Kong, you can buy and sell shares on the New York Stock Exchange via our HSBC apps. So, there’s a variety of things we’ve done and there’s a variety of things we’re continuing to roll out.”

The bank has been particularly enterprising in terms of its SMS alerts. Determined to avoid the blight of ‘bad revenue’, whereby customers are charged for an unauthorised overdraft, HSBC was the first to develop a simple text-based warning system. This has been coupled by a surge of innovations in customer experience management.

“Our premier proposition is an interesting banking proposition for customers who have accounts in more than one country,” says Clark. “You can link them up with a global account view, and move money between them at the click of a mouse. Some of these kinds of innovations have been around for a few years and are only just being copied.”

Harnessing social media

The bank is keeping its eyes open to the potentialities of the internet age; an age in which 80% of the world’s population own a mobile phone and nearly 100 million Americans possess a Smartphone. But passage into this brave new world is not proving altogether straightforward.

“Keeping up with these platforms is very difficult,” Clark explains. “With mobiles in particular, you deal with multiple organisations – different network suppliers, G technologies and handset manufacturers. So, if you’re producing apps, you’ve got to do it for Android, as well as the iPhone and the Windows 7 phone. Customers generally are a little bit underserved by how banks have innovated in these spaces.”

The same applies with social media. While its adoption has been extraordinary in scale, banks have been lambasted for their slowness on the uptake. For today’s TwitCasting generation, a bank may be seen as a force of Luddism – few banks have embraced social media with the same alacrity as their users.

Much of the time, this is for a good reason. A mix of security issues and regulatory constraints prohibit banks from issuing personal advice over Facebook. All the same, there is no reason why social media can’t be seen as both a marketing opportunity and a platform for conversations to begin. Twitter has proven particularly useful as a forum for airing grievances.

“We have a Twitter news feed that allows our guys to talk to anyone with issues,” says Clark. “We try out of discretion and courtesy to those customers to take them into a secondary channel once we’ve figured out what’s wrong. Essentially, you don’t want to have the entire dialogue on there – you don’t want your mortgage account number on Twitter.”

The bank has also tapped into other social networks favoured by emerging markets. For example, China is hugely active on sites like Sina Weibo and Qzone – not so well known to the rest of the world, but critical in a strategic context.

Chat and sensibility

The social media issue brings difficult questions to the fore: how best to engage customers on one hand, while protecting their information on the other. These are quandaries that strike to the core of a bank’s customer relationship management strategy.

“There’s a wealth of difference between being chatty with Coca Cola, and being sensible with the bank,” says Clark. “It’s beholden on banks to make sure customers are safe, because nasty people are mucking around doing things like phishing.”

HSBC makes security a paramount concern, even to the extent of compromising on usability. A case in point: in August 2011, users mounted an angry Facebook campaign against the bank’s new ‘secure key’. A small calculator-style gadget, the key was designed to lock interlopers out of your online banking account. The problem was the ease with which you could get locked out your own.

As part of a two-factor authentication system, the key has certainly heightened security – a similar tool from Barclay’s occasioned a 90% reduction in online fraud. But since each HSBC device is unique to a specific user, there is no scope to borrow other people’s and widespread inconvenience has ensued.

“The security measures at HSBC don’t go down terribly well, but it’s a fact of life sometimes,” says Clark. “We’ve made it a core competency of the organisation and we’ve taken a very particular view on how we do that globally – what you have to do in the UK is the same as in Hong Kong.”

He laments that emailing customers has become redundant; so prevalent are phishing attacks that any email supposedly from a bank is apt to be processed as spam. Rather, since communications are held within the secure banking account itself, the customers themselves should take some initiative in staying abreast of their transactions.

Bank balance

As for banks, they must continue to develop strategies that strike an uneasy compromise: how best to keep customers happy and talk to them on their own terms, while safeguarding their information? The solutions, one suspects, are a work perennially in progress.

As HSBC enters into its next chapter, Chris Clark and colleagues will be endeavouring to find that balance. Call it SoLoMo or eschew all jargon, the task is clear: this is about engaging with tech-savvy customers who carry their bank in their back pocket.


This feature appears in the Winter 2012 edition of Future Banking

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