HSBC is on course to beat its target of cutting 10% from
per-transaction operating costs across the global group this year,
thanks to heavy investment in IT.
The banking giant expects to cut per-unit processing costs by
11% in 2006, after shaving 8.8% off costs last year as it continues
to integrate and globalise its IT infrastructure.
In a briefing last week HSBC said it had stepped up IT
investment in application development and innovation for global and
regional systems, with more than 40% of this development taking
place in low-cost countries such as India.
The bank expects to spend $4.8bn this year and $5bn in 2007 on
IT. It is run as a shared service for all of the group’s global
businesses and charged to businesses based on usage, giving even
smaller operations access to systems that would otherwise be
uneconomic.
The bank’s IT agenda has seen it develop 80 global platforms and
systems it can now reuse in local markets, with many more in the
pipeline.
Ken Harvey, the group’s chief information officer, said, “having
a series of core global platforms is fundamental to joining up the
company. We have the ability to ‘test and learn’ and export the
winners quickly to address the powerful changes in customer
behaviour that are transforming how we serve.”
The bank has also successfully consolidated onto four global
datacentres, plus two further regional datacentres. Any
acquisitions made by the bank are typically integrated into HSBC's
global datacentres within 12 to 18 months.
“Without that datacentre consolidation programme, we would now
have 126 live datacentres, so it is a crucial part of our ongoing
work,” said Harvey.
The bank runs its systems on a global data network it installed
itself, which HSBC said costs it just a seventh of what an
equivalent public network would cost to run.