HSBC Aggressively Leveraging Its Network for Transaction Banking

A recent conversation with Diane Reyes, head of transaction banking for HSBC, sheds light on the bank’s strategy for growth.

Diane Reyes, global head of payments and cash management for HSBC, highlighted the bank’s transaction banking priorities at SWIFT’s SIBOS conference in early October. These fit the four areas of growth identified by Group Chief Executive Stuart Gulliver in an earnings call as delivering the “value of the network” during the bank’s interim results call in August: cash, trade, FX and capital financing, principally in RMB (see table below).

“In particular,” as Mr. Gulliver noted on call, “we aim to reinforce our leading position in trade finance, to improved client coverage in product and payments and cash management, increase foreign exchange collaboration across our global businesses and renew the capabilities of our electronic distribution platforms and strengthen our leading position in the renminbi services.”

With this in mind, Ms. Reyes’ five-year plan is to grow the HSBC’s transaction banking business revenue aggressively: 60 percent over the next five years (12 percent per annum). She aims to do this by:  

1. Investing in people. In particular, Ms. Reyes is looking to add client-facing roles in places where its key customers are doing business now and where they are going to be in the future. The people she will add won’t just be business development people—at least 60 percent will be people focused on client management, integration and servicing/support. 
2. Investing in products. Initially, product investment will mean using “feet on the street” to find out how customers want to use payment and cash management solutions and adapt them to capture new business. “We want to make it as easy as possible for customers to accomplish what they need to support their business,” Ms. Reyes said. HSBC’s systems will need to be capable of managing big shifts in customer needs. As the number one bank connecting corporates to SWIFT, for example, HSBC sees tremendous upside in new products taking advantage of SWIFT connectivity. There is also much to be done in introducing consistent products that are accessible across one, global HSBC network 
3. Innovating. HSBC wants to lead in innovations surrounding digitalization on mobile platforms. HSBCnet, the bank’s global online banking platform, should not only be entirely mobile accessible, but designed for mobile access. Citing the attitudes of her own children to depositing checks via mobile banking apps, Ms. Reyes believes that generational acceptance of mobile banking risks will quickly alter the landscape as they come to demand mobile access. Already, HSBCnet Mobile has the bank on its way, having initiated $1.2bn in payments this year alone, and working with MNCs on collections/payment receipt confirmation in a growing number of key markets. 

With these three pillars, along with generally leveraging the bank’s global network, Ms. Reyes hopes to increase the significance of transaction banking even further as a revenue growth driver. HSBC is present in 74 countries and territories and all of the top 15 countries by GDP. Its network covers nearly 90 percent of global trade flows, and sits on both sides of every one of the top 15 trade corridors in the world, nine of which have its priority markets at both ends. Like other global banks, HSBC is also focused on cities: it is present in 70 percent of the world’s top 200 cities, 50 percent of which are in its priority markets.