Increased investment in IT pays dividends for HSBC

HSBC is on course to beat its target of cutting 10% from per-transaction operating costs across its global banking operations this year, thanks to heavy investment in IT.

HSBC is on course to beat its target of cutting 10% from per-transaction operating costs across its global banking operations this year, thanks to heavy investment in IT.

The bank 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.

IT at the bank, on which it expects to spend £2.5bn this year and £2.7bn in 2007, is run as a shared service for all of the group's global businesses. Business units are then charged based on usage, giving 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 more in the pipeline.

Ken Harvey, chief information officer at HSBC, 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 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.


Read article: Fast-track integration

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