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Applying Lessons from E-commerce to Banking

by internationalbanker

By Reginald Warlop, Global Head of Digital, Wealth and Insurance, HSBC




Really simple, customer-focused online retail experiences are now part of everyday life. Amazon lets you track delivery drivers in real time; Spotify introduces you to new music you’ll love; and eBay allows you to choose how much you’re willing to pay. But are customers getting these types of experiences when they’re banking, trading and investing?

Cutting through the noise

One thing of which there is no lack in the digital age is choice. We have access to every option we could possibly desire, for every type of product or service imaginable. So, how do we cut through the noise?

If we’re searching for the perfect holiday, we can narrow down a world of choice by putting parameters around budget, flight times, the type of leisure activities and dining options, for example. Why should this be any different for our financial needs?

Things are changing. Today in China, we ask customers about their broad views on regions, markets and sectors. We’re then able to wrap up these insights into a simple sentence about the most relevant products to suit their needs, based on their known risk appetites. This is a radical departure from showing a long table of all of the numerical payoffs that we offer—which is how these products were typically presented to consumers. This simplification and personalisation works. It has resulted in increased sales as we are offering customers only appropriate products, while also reducing our conduct risk.

Taking stock

In fashion, when a garment is out of stock, consumers eagerly click on “alert me when it’s back in stock”. The same rules can apply for other purchases, such as currency.

Let’s imagine you have an exchange rate in mind, and you keep checking every day. Enter QuickFX, our first-of-its-kind mobile app for trading global currencies and transferring money globally. Launched in Singapore in January, it allows you to set alerts or place an order automatically when the exchange rate you want is “back in stock”.

One-click convenience

Another popular feature of many e-commerce sites is one-click purchase. You select an item, and with just one click, the website uses your stored bank card and delivery details to complete the purchase. It can even bundle individual items bought separately into a single transaction.

Now we’ve made it just as quick and easy for customers to trade stocks and shares through the Quick Buy button in Easy Invest, our share-trading app that launched in Hong Kong in September 2017. More than a million trades later, Quick Buy has emerged as the preferred way to buy or sell shares.

Sharing economy

The days of buying an entire album in order to listen to your favourite song are gone. Companies such as Spotify give you access to a world of music without ever owning and buying the entire album. Based on a subscription model, the pricing is clear, predictable and transparent. 

There are already a number of companies offering exactly this for wealth management by introducing micro-investment into products specifically built for digital consumption. You do not need the entire capital required to purchase the product in order to get into the action. Whatever investment amount you have available allows you to be invested; you can contribute on a monthly basis, take money out and put money in anytime with no penalties. And the service is priced as a fixed subscription … easy, transparent and convenient, just like Spotify is.

Buy more to get a discount

On e-commerce sites, when purchasing a product you get promotions if you buy more of the same. A similar premise can be applied to financial services. For example, we have introduced this concept in our currency-conversion platform. Once you have indicated the amount of a currency that you want to purchase, our smart FX-pricing technology identifies which increment of that amount would give you a preferable rate.

Indicate your interest

When bidding on items on e-commerce auction sites, you indicate the price you would be interested in paying for the product at some point in the future when the auction expires. If you win the auction, you get the product; if not, you get your capital back.

We apply the same principles for currency conversions. Our clients have the ability to indicate the price they are willing to pay for a currency within a set period of time. If the price is reached at that point in time then they get the currency; if not, then they get their capital back with interest.

Have a wealth workout

Many people have an annual health check. They speak to a doctor about their lifestyles and fitness goals, run a few tests and receive appropriate treatment and/or improvement plans. Similarly, the health of investments is just as important. Many organisations like us now provide the means to a wealth workout. For example, at HSBC we have developed a digital financial health check that customers can use in advance of meeting with their relationship manager, helping the team prepare for specific needs for when customers come in for the appointment. 

Learning lessons

Customers have been introduced to fresh, frictionless experiences in e-commerce. And they are now coming to expect the same of their banking experiences.

By translating our learnings from other industries to our wealth propositions, we have been able to innovate for the benefit of our customers. There are so many lessons we can learn from other industries, as well as looking closely at what our customers are doing every day in their own personal digital lives. That’s how we can create experiences that our customers want and, increasingly, that they will expect.


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