Somers: What are some of the emerging IT trends that you are keeping an eye on right now?
Martin: Mobile banking is probably one of the hottest technology topics in the finance world, and the accelerating migration of mobile phone users to touch-screen smart phones like the Blackberry Storm or iPhone will almost certainly be the trigger for the next revolution in banking. We have already seen far less emphasis on high-street branches in favour of online banking, and surely the next wave of customer demand will be for a mobile application of their online bank.
Somers: You have worked in several of HSBC’s global offices, including Hong Kong, Saudi Arabia, Brunei and now Vietnam. From a technology standpoint, what have you found to be the key differentiators between these diverse financial markets?
Martin: The availability of technology in the modern world practically knows no geographical boundaries, but culturally, the penetration of technology in each of these markets is quite different. In Saudi Arabia the internet is restricted and access by individuals is still relatively low, as a percentage of total population. In Vietnam there is a general lack of comfort with online commerce because of concerns about security, and payments using credit cards is still relatively new. Hong Kong is at the opposite extreme where every new technology is embraced, and indeed demanded. In HSBC our technology platforms are global, so we use the same core systems in the majority of the countries in which we operate. In certain markets, that is a distinct advantage; and for our global customers, a unique proposition.
Somers: HSBC (together with Worldwide Fund for Nature) has recently launched Climate Camp, an initiative to address climate change in Vietnam. As Chairman of HSBC Corporate Sustainability Steering Committee, what is technology’s role in combating climate change?
Martin: Ironically it is technology that has been the main contributor to climate change from the industrial revolution onwards. Behaviour change and the integration of more environmentally-friendly technology are now essential to reverse this effect. Green energy sources are becoming more prevalent in some markets, but the cost differential with fossil fuels often acts as a compelling disincentive to change. Our Corporate Sustainability Steering Committee not only manages our own consumption footprint and our traditional CSR activities like charity work and community engagement, but also acts as a forum for driving behavioural change with our customers. Apart from the strict lending guidelines we have for specific high-risk industrial sectors, our relationship managers are encouraged to promote the investment in green technology by our customers. The Climate Camp was an initiative to drive change through education and practical experience. If our staff understand the issues better, they are more likely to promote behavioural change in our customers.
Somers: How far in advance do you formulate your IT strategy; and how agile are such plans to market changes?
Martin: The IT strategy of each of HSBC’s regions and countries is closely coordinated. Local business demands of each country are centrally coordinated at regional level, which from Vietnam’s point of view, means in Hong Kong. Priority for early adoption of new Group software is normally based on the repayment rate the benefits can produce, but occasionally a smaller area would be given priority for tactical advantage. The IT infrastructure of HSBC in the region allows us to cluster countries for simultaneous rollout of upgrades and new features. Our systems are written to cater to the most advanced and competitive banking markets in the world, so even the relatively unsophisticated markets can rapidly deploy new products and services without specific new installations.
Somers: Which channel is most effective when reaching out to new customers in Vietnam?
Martin: In Vietnam, most of the total money supply is actually outside of the banking system. This gives all banks in Vietnam a magnificent opportunity. HSBC looks to provide personal banking services to the mass affluent and middle class professional workforce, in addition to enterprises who value and can afford to pay a premium for their banking services. The more sophisticated customers see online banking as an essential product offering, but a street-level presence is also required in the retail bank as Vietnam is still very much a cash-based economy. However, perhaps more important than channel strategy is reputation. It is the reputation of a robust banking environment that will bring money into the banking system and the individual reputation of the banks operating in the market that will drive quality customers to the top-class banks.
Somers: According to industry analysts, the top technology trends facing the financial services sector in the year ahead are cloud computing, biometric authentication, and virtualisation. Do you agree; why/why not?
Martin: Industry analysts usually know what they are talking about, although cloud computing and data virtualisation would scare the average prudent banker, if indeed the average banker even knew what these terms mean. Data integrity and confidentiality are at the core of a bank’s reputation; our customers need to trust us with their financial lives. Virtual or shared resource or data pools do not fit into the model of an organised, safe repository of wealth and financial information. HSBC operates many industrial strength “tools” that take advantage of more advanced computing capabilities, such as neural information processing systems for anti-money laundering or marketing purposes. The robust database is still where our valuable customer information is stored, behind layer upon layer of computer security. But what use is the security if a customer has his identity stolen or his account mandate forged? It could be said that a person’s identity is his most valuable possession; in banking it is certainly the key to his wealth. Biometric authentication gives banks the ability to add extra authentication layers to security systems to protect customer data and wealth. With this in mind we are presently developing our capability to integrate these into our procedures.
Somers: Travel Care is HSBC’s new online insurance product (launched in March 2010). With the increased accessibility to customers via outlets such as Facebook and Twitter, does co-creation with customers factor in to your strategy when developing new products?
Martin: The customer is at the heart of everything we do, and the customer’s convenience is paramount when we develop new products. After all, if the product is not easily accessible, it will not sell well. Many customers, particularly of the Gen Y demographic are more comfortable filling applications online, or communicating with companies through email rather than face-to-face visits or even telephone calls. HSBC’s new account opening process, currently in pilot stage in Malaysia integrates many features that appeal to Gen Y population, such as removal of wet signature and co-creation through multiple channels. As an additional benefit, these new procedures are also reducing paper consumption.
Somers: In January, 2010 new multi-functional ATMs were released in Vietnam as part of HSBC’s channel migration strategy from counters to self service channels. What do you envisage will be the next frontier of customer channels in Vietnam?
Martin: Cash services on a 24×7 basis is an essential part of our channel strategy, and multi-function machines at our branches and offsite locations give our customers unrivalled convenience and service. Diverting cash transactions to self-service terminals also allows us to dedicate more of our branch space and staff time to servicing customer’s non-cash needs, such as providing financial consultancy advice. For the foreseeable future in Vietnam the internet and emerging hand-held financial services will be the frontier of our offering.
Somers: What are your IT priorities for the next 12 to 18 months?
Martin: HSBC in Vietnam is new to the personal banking business, as our previous foreign bank licence restricted our ability to provide banking services in multiple locations and for all products. Since local incorporation we have progressively extended our product offerings in cards, loans, deposit, investment and insurance products through a comprehensive array of channels. We have also established what we believe is the first fully centralised operations network of any bank in Vietnam. We will continue to develop each of our business lines and technology is one of the cornerstones of our future success. We have recently launched HSBC Premier in Vietnam, which is HSBC global tailored package of exclusive services that can be accessed from anywhere in the world that you live or work. We will be delivering additional services including a global view of all your accounts and real-time international me-to-me payments later this year. As you can imagine the technology behind this unique service is quite a challenge. But the number one priority for IT will always be reliability. Our operating standards are consistently 99.9 per cent or better across our suite of systems. There is no point in having bells and whistles if the core system is unavailable. All of our systems are mirrored for continuity and security and all our networks are engineered for redundancy, avoiding single-point-of-failure.
Somers: Every leader, particularly at your level, has a legacy they wish to be remembered for. What is yours?
Marin: My simple intent when I assume a new position with the Bank is that I will leave the job in a significantly better state than it was when I arrived and that in doing so I will enlighten my colleagues with the benefit of my own global experience. Many of my previous roles have included significant change management, and the establishment of HSBC Bank (Vietnam) Ltd. as Vietnam’s first and leading foreign owned, locally incorporated bank is such a role. I would like to be remembered as one of the team that started the new bank on its road to success. As Chairman of the Corporate Sustainability Steering Committee I believe this period will be recognised as the time we moved from eager philanthropy to deep community engagement on social, educational and environmental programmes.