HSBC is making plenty of noise about having spent $2.3 billion on improving its artificial intelligence (AI) and digital capabilities around the globe.
WeChat is an “important part of our digital strategy”
In an interview with South China Morning Post (SCMP), Vivek Ramachandran, head of growth and innovation for HSBC global commercial banking, said that between 2015 and 2017 the bank created new platforms and partnered with technology companies such as Tencent’s WeChat.
“We have found that an increasing number of clients like to use new technology to conduct bank transactions in a secure and transparent way,” says Ramachandran, aka Captain Obvious.
In the interview, Ramachandran says HSBC has allocated $200 million globally for investment in fintech and enterprise start-ups.
He called WeChat an “important part of our digital strategy”. As you probably know, WeChat hit one billion users last month.
SCMP explains that in mainland China, HSBC is one of the first foreign banks since 2016 to allow retail customers to access services through WeChat.
Last year, the bank expanded its WeChat services to allow commercial banking customers in Hong Kong to receive notifications through the platform as an alternative communications channel.
With the fintech world absorbed by the threats from fraud, Ramachandran says the WeChat notification service has also improved HSBC’s ability to alert customers to potentially fraudulent activity in their accounts.
In addition, “customers do not have to worry about not receiving SMS notifications when they change their SIM card”.
The interview, which felt like an advertorial at time, focused on all the positives.
There was no mention of two recent stories – such as HSBC getting hit by a $63.1 million fine. This is part of a three-year deferred prosecution agreement with the US Department of Justice (DoJ) to resolve its investigation into the bank’s historical foreign exchange (FX) sales and trading activities within its global markets business.
There was also the issue that HSBC was late for the UK’s open banking launch.
Anyway, back to Ramachandran’s happy, carefree world.
He states that the bank will also develop blockchain and AI capabilities to handle invoices and trade documents.
“Clients want a simple and easy way to track their transactions. They want to reduce the amount of paper used and they want to access information instantly. This is where blockchain and AI can help,” he says.
In terms of stats, HSBC tells us it has an additional 1.5 million customers of its digital banking services globally.
Use of the bank’s app, HSBCnet, increased by 55% in 2017, and was up by 60% in terms of value payments. According to HSBC, over the past five years, it has seen a 333% increase in mobile banking customers.
The bank is also working with IBM to develop a solution that combines optical character recognition with robotics to automate trade finance processing.
“While this type of automation improves accuracy and processing times, it’s important to remember that each transaction still needs to be reviewed and assessed by two trade professionals,” says Ramachandran. He adds that the technology would not replace human interaction.
“We’ve seen 5,000 customers ask our chatbot ‘Amy’ more than 115,000 questions. While Amy has been a great success with the customers, they still want to talk to a real person to solve more complicated queries.
“The successful implementation of advanced robotics and cognitive technology frees up staff for more value-added activities, and we are actively re-skilling these employees,” explains Ramachandran.
Fighting the good fight
Away from this upbeat interview, Quantexa, a big data start-up, has revealed that its technology is supporting HSBC with the bank’s work to combat money laundering, following a pilot in 2017.
HSBC will integrate Quantexa technology into its systems this year. No exact dates were offered.
The technology will allow HSBC to spot potential money laundering activity by analysing internal, publicly available, and transactional data within a customer’s wider network.
The bank and start-up will work together to detect potentially illegal activity in its “broader context, helping the bank fulfil its regulatory responsibilities and provide better understanding of the overall risk”.