HSBC banks on IT to stem losses

The standardisation of IT systems across the globe was highlighted as part of an ongoing “One HSBC” cost reduction programme to offset falling profits unveiled by the financial service giant yesterday.

Profits fell 28 per cent for HSBC in its first quarter of 2008 trading to $14 billion (£7.1billion) due, the bank said, to bad debt exposure from the fallout of the global credit crunch.

The fall off in profit was all the more glaring when viewed against a backdrop of a two per cent increase in total operating income to $42.9 billion (£21.7 billion), compared to the first six months of last year.

Michael Geoghegan, HSBC chief executive, pointed to the results of the ongoing One HSBC programme to offset worries about falling profits.

“One HSBC is our programme to re-engineer the company so that wherever possible we use global systems which provide leading customer experience and also drive down the cost of production,” he said.

Geoghegan added the technology standardisation initiative had already reduced service interruptions by half as well as cutting customer wait times to speak to call centre staff to carry out the most frequent telephone-based transactions.

By unifying its views of customers across different lines of business, the bank had also improved it collection and customer relationship management services. And migration of its global credit card business is being migrated to a new One HSBC cards platform. The bank said 75 per cent of its card business is now live on the new platform, with India and Indonesia coming online later this year.

Geoghegan added that the One HSBC programme is paying particular dividends in emerging markets.

He said; “Deploying One HSBC systems as a fully integrated package is particularly beneficial in our emerging markets because the suite reduces bespoke software costs as well as producing operating benefits.”

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