By Taylan Turan, Group Head of Retail Banking & Strategy, Wealth and Personal Banking, HSBC
The global pandemic encouraged (or required) many people to rethink their plans for employment relocation or travel. Fast forward to today, and the appeal of international living—whether relocating for work or studying abroad—has not diminished.
To put this in context, according to the Migration Observatory at the University of Oxford, the United Kingdom attracted 76 percent more ex-pats (ex-patriates) in 2022 compared to 2021.1 The number of overseas students is also rising worldwide; international students coming to the United Kingdom increased by 44 percent in the same period, and almost half of this growth (45 percent) came from India and China.
Although global citizens are increasing across the world, we know customers who relocate can feel unsettled because the financial transition from A to B (especially involving their experiences upon arrival) is often far from plain sailing. We heard this loud and clear from our international customers, so we made it our business to fix it across our key corridors.
The financial struggles of relocation
Earlier this year, we spoke to 7,000 international citizens in nine global locations2 to better understand the complexities of being an international customer. Nearly half (46 percent) of those planning to relocate said they expected a cash-flow crisis upon arrival, and a similar number (45 percent) admitted that they didn’t know how to juggle their financial lives between locations. This problem is more acute for international students, as more than half (55 percent) are unsure how they will manage their financial lives.
These worries aren’t affecting just a small proportion of people. Collectively across our 10 key operating markets (Australia, Canada, the Channel Islands and Isle of Man, Mainland China, Hong Kong, India, Singapore, the United Arab Emirates, the United Kingdom and the United States), we estimate that there is a pool of more than 90 million international customers3 (people living, working or studying abroad). This is a huge number, and we recognise the impacts that retail banks can have on those people’s lives by providing seamless international services to make customers’ global transitions as smooth as possible.
However, this is easier said than done. The sector’s current approach to serving global retail customers is fragmented, and I believe the industry needs to rethink how it serves this group. Being more holistic is the first step.
We aspire to be a single hub for international customers, able to help beyond basic banking. However, international citizens are difficult to serve; financial-services providers need digital presences and the right licences to operate in specific jurisdictions to support customers in these locations. HSBC’s heritage, footprint, presence and understanding of the issues faced by global customers mean that we can support customers and help them set up before they move. For example, we can provide a debit card ready for use when they land.
HSBC benefits from its global scale. We have the right technology to tackle these problems, but it’s equally important to empathise with our international customers about the practical issues they are facing. This enables us to adapt our regular banking services according to their unique needs. We know their financial lives can be complicated; for example, they may have four bank accounts in four currencies across three time zones.
So, in practical terms, how can a retail bank create seamless international services for global customers?
Six commitments to ease international banking
Gathering a wide range of customer insights has enabled us to simplify our cross-border banking service, andwe’ve made six commitments to our international customers across our 10 key markets.
These commitments include the ability for people to open new accounts before they arrive at their destinations (without having to visit branches), allowing customers to see and access all their HSBC accounts in one place, as well as providing 24/7 customer support so they can contact us from any time zone and access their international credit histories in their new locations.
Whether they are sending remittances back home, paying for education or purchasing property abroad, the ability to transfer money securely and quickly cannot be understated.
That’s why we introduced Global Money Transfer, which allows customers to see their balances and send money to anyone, anywhere in the world, using a mobile-banking app. HSBC customers can move their money seamlessly across geographical borders—from their bank accounts in their home nations to their new accounts in other countries, such as the host nations where they have relocated.
From 5 days to 15 minutes
It is clear from our research that some people get caught short on the financial front—not having the basics in place on arrival can impact their abilities to settle into their new homes. But knowing they have a supportive financial partner can ease the stress. Simply making it possible for international customers to open bank accounts before they move overseas means they can hit the ground running. Without these accounts, they can struggle to secure their new homes—and without a fixed address, they may meet obstacles when getting their children into schools.
Previously, when moving from Hong Kong to the UK, an application to open an account took five or six days on average. Now it’s a 15-minute process in one day. I believe this is the future of serving international customers; widespread adoption of faster payments to any account across the sector—not just HSBC to HSBC—should be a must. We have proved it is possible.
Access to credit when relocating
Our survey also sheds light on customers’ challenges in accessing credit when they move abroad. More than half (56 percent) of international citizens highlighted their struggles to get essential services up and running in a new place due to their inability to transfer their credit histories from location A to location B.
Once we recognised that the lack of access to credit histories could cause hassles—for example, prevent or delay customers from finding homes to rent or making major purchases—we realised that our industry could not afford to ignore this problem.
To address this, we help customers build a financial footprint in another country, as their credit histories matter to us. We’ve created a secure digital process allowing customers to share their histories from certain countries and regions. (The service is provided by Nova Credit and is available in Singapore and the UK; it is being expanded to more markets soon.)
For example, if you are an HSBC Premier customer, we recognise your existing HSBC relationship if you apply for a credit card. This service is integrated into our application process and enables your credit history to be accessed and passed across digitally without the effort of having to request a report manually.
Help beyond banking
Another commitment is to go beyond basic banking in collaboration with global partners, such as providing relocation support. Moving abroad is both exciting and daunting. Enjoying a better lifestyle can easily be tarnished by financial stresses and struggles. At such an exciting time, I want money worries to be the last thing on a customer’s mind, so he or she can get on with his or her new life!
Collaborating with like-minded partners is exciting. We have found excellent partners to help us reduce the burden of life administration that our international customers face when they move. How does this look in practice? It’s offering customers mobile SIM (Subscriber Identity Module) cards before they land or pre-arranging airport transportation—small things that can provide big relief.
But I don’t just want to resolve the frictions for banking and administration. I think it is important for retail banks to take it further to ease the broader anxieties of their customers—such as tax changes, which can weigh heavily. Our research found that almost three in five or 59 percent of international citizens who are planning to move are concerned about tax implications. We help our customers navigate the complexities of taxes in different markets around the world through our partnership with professional-services firm EY (Ernst & Young Global Limited).
Regional investing tools
It’s not all about the big move. From my perspective, it’s also important to help customers plan for their futures, whether they’re moving or not. Some customers only want to invest globally without moving. That’s why retail banks need to provide customers with access to wealth services such as online tools that can enable them to invest in other regions to help them diversify their wealth—a welcome idea given the recent bouts of global economic volatility.
As technology evolves, so do the complex needs of international customers. It goes without saying that retail banks must continuously study customers’ needs and innovate accordingly to alleviate their concerns and deliver the best possible experiences. So, our mission to create a seamless international banking experience is a perpetually evolving project. We’re already planning how to build on our six commitments to bring even more game-changing solutions to the industry for our international customers.
1 The Migration Observatory at the University of Oxford: “Net migration to the UK,” Madeleine Sumption and Peter William Walsh, December 20, 2022.
2 Ipsos UK: “New HSBC research reveals the financial challenges of relocating abroad,” Katie Hawkins and Rohit Chandani, February 23, 2023.
3 United Nations Department of Economic and Social Affairs, Population Division, 2020.