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HSBC hired some 500 people in its transaction banking business last year and expanded its mobile offering. The bank's global head of payments and cash management Diane Reyes reflects on some of the lessons learned.
Rising regulatory costs and technological shifts are causing some global transaction banks to rethink their strategies and focus more on what is close to home. The retrenchment has left their corporate customers jittery.
HSBC, however, expanded its workforce across the transaction banking business in 2014.
"Last year, we hired nearly 500 people globally to work in our payment and cash
management business. It was a combination of client facing staff, sales, front office, product management, IT and operations," says Reyes.
The move means the bank has resources for its technology development, as well as serving clients directly.
In order to be able to recruit that number of hires in such a short time frame, the bank has had to be open-minded in its approach to finding new candidates. Rather than focusing on the same pool of banking talent, HSBC looked beyond this to bring in people with wider industry experience.
Reyes explains: "Hires have been made from non-traditional sources. We have brought in people who have worked at corporates as they have experience we need when the bank is working with similar companies."
The growth of the bank's transaction-services division comes at a time when many companies are seeing their banking partners pull out of certain regions. This is creating a climate of uncertainty as corporates are not able to guarantee that some of their partners will remain committed to their markets in the long term. To see that some banks are further investing at least provides some reassurance of their commitment.
"Customers are seeing the expansion and are happy as it comes at a time when they are seeing other banks disinvesting," says Reyes.
Having experienced people on board who were previously in the corporate and the technology space is helping to ensure the right services are being brought in for the clients.
"We are looking to technology partners to see what they can bring to the table," Reyes says. "It is vital to make sure the technical resources are optimised as they are essential to the customer experience. It is not good to agree to do something only to find it will not work on their internal platform."
The bank also recognises the importance of joining with partner technology organisations to enter into the mobile payments space. In this partnership, HSBC can assist telecoms companies unfamiliar with banking regulation.
"Payments are a joint offering with the mobile providers in some places, and the banks have a lot of knowledge to leverage on compliance and ensuring comprehensive sanction screening is completed," Reyes explains. "This is new territory for the mobile companies that have been operating in accordance to their own regulatory body."
The HSBCnet mobile app allows users to view their account details, make payments to existing customers, prioritise payments and receive notifications when a transaction has been completed.
"We have found mobile growing in some markets we did not expect to see it mature so quickly," Reyes says.
The bank has seen some markets in Asia being slower to move to mobile than it had expected, in part due to the structure of the payments process in the region. By comparison, the markets in Latin America have been quick to step up their usage of mobile. This has had the positive impact of shortening the time it takes for payments to be received, and reducing the number of thefts from the payment collectors who would traditionally have carried large amounts of cash.