e-Commerce is simply another channel that allows increased efficiencies for both our clients and HSBC. Whether clients are accessing research and analytics or trading FX, they have a range of choices about how to communicate.
As one of the worldÃ¢â‚¬â„¢s largest banks, HSBC has a huge global footprint and very strong international brand. How has that strength shaped your approach to developing and delivering eFX solutions?
HSBCÃ¢â‚¬â„¢s business is not only global but also cross product. As such, our development strategy has had to include a wide range of services across a range of business units, from Global Markets to Cash Management and Trade Services. As a result we have built HSBCnet, a web site that offers all these services in one place. Specific to eFX, we have leveraged our global presence by supplying liquidity across all tradable currencies on a 24- hour basis. In addition, in some specific cases where there are on-shore restrictions, we have been able to link our eFX services to local in-country offices.
YouÃ¢â‚¬â„¢ve recently been experiencing terrific growth in e-volumes. WhatÃ¢â‚¬â„¢s driving this?
A range of things. Customer demand is incredibly high, as clients realise the maturity of the internet. Also, we have invested resources in training to ensure technology is at the core of our business. Finally, HSBCÃ¢â‚¬â„¢s strategy of offering a website that is one point of access for all Corporate, Investment Banking and Markets clients is reaping rewards as sales people cross-sell HSBCnet services, specifically at this point Payments and Cash Management and Global Markets. Your treasury and capital markets portal, www.markets.hsbc.com, offers a wide range of functionality.
How much have you achieved towards your aim of developing one venue for customers to access multi-product pricing and services across the whole of HSBC?
The site has now changed to www.cibm.hsbc.com. This reflects the fact that it is a cross-product offering, which encompasses all services within HSBCÃ¢â‚¬â„¢s Corporate, Investment Banking and Markets business. The range of functionality is essential as we must allow individual users to personalise the site to reflect their requirements: for example, this may be for a user to trade FX, view cash management accounts, approve payments and view research.
What features of the site are proving most popular and how important is your product integration approach proving to be for clients?
Client-feedback is encouraging. Independent research has indicated that 80% of HSBCÃ¢â‚¬â„¢s CIBM clients want a portal, rather than a number of separate websites. It is hardly surprising that our Global Research and Market Data services have so many hits, as they have been available since 2000, and over 6,000 clients have access. Perhaps more surprising is the success of our FX flow tool, fxflow@hsbc. A high number of FX clients now log into this service on a daily basis to monitor HSBCÃ¢â‚¬â„¢s global flows in any tradable currency pair.
The online trading of FX Options is now becoming an increasing focus of attention. How is HSBC using the Internet to offer clients access to solutions for these types of more complex products?
HSBC recently launched an online package of FX Derivatives services. FX Derivative analytics is a charting tool that allows clients to examine the relationship between spot, volatility, correlation and other information. We also provide short- and long-term trading ideas. In addition, HSBCnet houses an internal tool called the Derivative Application Sales Tool. This is a database of all FX options products and allows salespeople to input a range of variables, which produce recommendations for their clients. This is just another way e-commerce can add value to clients, by allowing salespeople to market higher value products.
The benefits of e-trading such as error and cost reduction combined with greater execution and processing efficiencies have all helped to attract clients. Will these significant advantages be enough to ensure that banks retain them?
I donÃ¢â‚¬â„¢t think we should become complacent. Clients are aware of e-commerce offerings from other banks and we must continually look to improve HSBCnet. Our clients are looking for a one-stop shop: all have a cash management relationship with HSBC of some sort and we must capitalise on that by offering all services through one channel.
The loss of personal contact continues to be a worry for some clients resistant to eFX. What impact will new FX services have on those concerns?
Clients will still talk to people who add value. That is why we have improved efficiencies on e-commerce trades and invested in value-add services for more complex structures, such as the Derivatives Application Sales Tool.
Do you think the pace of eFX innovation and development is likely to slow over the next year or so and are we likely to enter a period of consolidation?
Innovation in eFX will be maintained, but more focus will be placed on the integration of services with client systems. HSBC will continue to connect to multiple 3rd party platforms, acting as a wholesale provider of liquidity. Consolidation of some 3rd party platforms is likely, with banks showing interest where they can use the 3rd Party technology.
Now that e-commerce has become firmly established in the FX market and we are moving away from the e-development stage, what are the main lessons you and your team have learned with regard to anticipating future client needs and helping them cope with the new electronic and online trading environment?
Our consistent approach of putting e at the centre of our business and delivering technology as it matures has meant that clients receive benefits of an established service. By making the existing salesforce responsible for selling e-services and investing in internal marketing HSBC has made e-commerce a fundamental part of our Global Markets business.