Heritage, footprint and presence fuel HSBC’s promises to international customers

HSBC has relaunched its international offerings to provide a seamless cross-border service and to support customers who move for work or to study in a new global location. Meanwhile, the bank found that many who relocate feel unsettled because they struggle to set up bank accounts, utilities and the internet, as part of a survey of 7000 expatriate citizens. 

HSBC estimates there are more than 90 million international customers across 10 of its key international markets – people already living, working and studying abroad. The research, produced by Ipsos UK, investigated the experiences of those in this situation, as well as those who are planning to do so, and those who have returned within the last five years in nine international locations. 

The key findings from the research were that:

• Of those who have already relocated, almost three in five (56%) agree that being unable to transfer their credit history led to struggles in setting up essentials, such as a mobile phone contract or credit card. Half (50%) planning to move overseas also agree that this is a concern for them.
• Among those planning to relocate, nearly half (46%) expect a cash flow crisis upon arrival, and just under half (45%) agree that not knowing how to juggle financial life between locations is a concern – this jumps to 55% among international students.
• Almost three in five of the future relocators (59%) are concerned about the implications of paying taxes in a new country.

On the back of this research, HSBC announced six “promises” to their international customers:

• The ability to open a new account before they arrive in their destination, without visiting a branch.
• Access to all their HSBC accounts in one global view; and the ability to make simple, fast and competitively priced payments.
• Credit history portability.
• Access to financial planning tools and portfolio-based advice from experts in their new location.
• 24/7 customer support.
• Access to services with global partners beyond banking (tax solutions, relocation support, special offers).

These product promises are available across 10 countries and territories: Australia, Canada, mainland China, the Channel Islands and Isle of Man, Hong Kong, India, Singapore, the UAE, the UK, and the US. 

The Banker sat down with Taylan Turan, group head of retail banking and strategy, wealth and personal banking at HSBC, to explore the bank’s relaunched commitment to international clients. 

Q: Can you give us some insight on the six promises?

A: There are six promises, and we deliberately chose promises. When we talk about promises, a promise is also personal, right? 

[In addition to the six promises] we have simplified cross-border banking. That effectively means customers can transfer money between their HSBC accounts in 28 markets with no fees. We have a proposition that we are very proud of that we call Global Money; and that's not only between HSBC accounts, but also with any other banks, seamlessly. It’s a great customer journey, frictionless – just seconds and not minutes – which is the reality of today's world. 

Q: The six promises have been available from March 1?

A: Yes. As you can imagine, this is the result of the last 12 months of very intense work. I hope you will agree, consistency in all the 10 locations in the 10 key hubs is easier said than done, right? This is the consistent HSBC promise globally, not only in one market, but that also took a lot of time for us.

Every single customer matters. To give you an example, moving from Hong Kong to the UK, the application typically took close to 45 minutes. The turnaround time of opening an account used to take a good five, six days on average. Sometimes it took a couple of weeks, because of the information flow. Now, it’s a 15-minute process and within one day. 

Many people ask: “What is different?” because we are an international bank. What is different is, first, these promises are consistent all around the world. Second, the customer effort is much less than before, with digital delivery, and not going to the branch and rather than taking 45 minutes, you take 10 minutes.

Q: I was interested in the survey – what were some of the insights that you gained from that?

A: We wanted to continuously validate our findings, and no surprise, we saw a very strong validation of what we saw over the last 12 months. One very strong message was the inability to transfer credit history between locations. Three in five actually said that there’s a struggle to get essential services up and running in the new place because they don't have a credit card. It’s as simple as that. Unfortunately, almost close to half said they are planning to relocate abroad, and they don’t know where to start at all. Those who have already moved, they’re also very confused after they move. 

Our takeaway from this list is that banking is not what you want to deal with. You want to deal with the other good stuff – the new communities you are going to be a part of, the restaurants that you’re going to want to go to with new friends. Banking should be that seamless. 

[In addition to professional expats] international students and their families are big – there's an ongoing connectivity between the parent and the student, especially for payments: typically they demand money. International investors is an interesting concept because you don’t necessarily need to move, but you think about how to diversify your wealth, [how to make] investments in different locations.

One of the other things that we saw in the research is the tax implications of changing locations is a concern – not just paying the tax but also the complexity of understanding the tax jurisdictions.

Q: People have been travelling and relocating for a long time. Why has this segment been so difficult to serve until now?

A: First, it’s very fragmented. Even if you look into the basics as a financial services provider, you need to have a footprint. Footprint means not only a digital presence, but you also need to have the licence to operate in those jurisdictions to solve those problems. It’s not straightforward.  

The luxury of where I am personally – for over 150 years, that’s what this bank has been doing. It’s more known for a wholesale problem. I would assume you would agree with me [that] international is more in tune to the wholesale commercial space than maybe the retail space. But it’s big. We estimate [there are] over 90 million customers in these 10 locations who are international. 

To serve those needs that we’re talking about, you need to have the licence to operate, you need to have the balance sheet, you need to have the footprint, the presence, [and] very importantly, the understanding of the customers in that location. There are not many who can do that, honestly. We are lucky to be in this position because we are present. We are now powered by technology; we can solve those problems much more succinctly than we used to. Heritage, footprint and presence are making a big difference for us.

It seems strange that banks haven’t tried to tackle this problem before now in their locations. It’s very difficult to address both legs of the journey.

I’ve moved to many countries myself, it’s not a one-off move. Let’s think about non-resident Indians, for example. They move all around the world, from India to the US, India to the UK. The remittance between India and the UK is big, you need to make it easy for them.

I think that is why it’s still fragmented, and nobody’s really cracked it, especially in terms of customer satisfaction. This is the place where I think we believe that we can make a difference because we can talk to those customers before they move – you want to settle your account before you get there, you want to make sure that you have a credit card before you get there. 

Q: Are people becoming more international now?

A: Yeah, I think it’s been a trend for many years. We announced our results and we said we have six million international customers already in our portfolio, so we’re not starting from scratch. It's a trend right now [and] this mobility has been there for many years. 

We estimate that these customers are increasing at quite a fast pace. Global mobility of expats, for example, into the UK increased by 76% from 2021 to 2022. International students to the UK increased by 44% in the same period, and by the way, 45% of this growth is driven by China and India. China, India are moving to the UK for study, and that’s increasing 44% year on year. So the short answer is yes. 

Q: What’s next?

A: We’ve worked hard the last 12 months and we are very proud of what we are announcing, but it’s not a one-off, it’s a continuous improvement mindset. We will continuously test what we do with customers to understand what more they need and what are the nuances that they are looking for.

We will keep adding more functionality and more coverage to the Global Money proposition which makes it easy to keep many currencies in your wallet to make seamless transfers in a very cost-effective way. 

I talked about international credit, the credit decisioning, and the credit portability promise. We partnered with a fintech company called Nova Credit which is live in Singapore, and also now live in the UK just recently. That capability helps you look into the credit bureau data from the source to the destination in a very seamless way, digitally. 

We’re also looking into education, for example. Education is a space which connects so many people and we can bring our scale to solve some of those ‘beyond banking’ solutions for customers.

Our Hong Kong CEO here was telling a story about how, a long time ago, when she moved to Hong Kong, she had to buy furniture with huge piles of cash because there was no other option. When you hear these types of stories, banking is sometimes perceived as a very mechanical, a very number-oriented thing. This is the part that’s about hearts, but also minds. That makes it much more powerful. I feel good-hearted about it.