HSBC pens artificial intelligence deal with Google Cloud

HSBC plans to create more than 200 artificial intelligence (AI) use cases across its business and expects to make hundreds of millions of pounds in revenue and efficiency gains as a result.

The bank already has around 600 applications running on the Google Cloud service, but the new arrangement will see more than 200 AI use cases added in the next two years. It said it will prioritise the highest-value initiatives, where estimated value exceeds $100m.

As part of the agreement, HSBC will harness the skills of Google Cloud and Google DeepMind engineers, gaining access to Google’s agentic AI capabilities. Areas initially being focused on include highly personalising customer experience through AI, using the technology to manage financial crime risk and expanding the reach of an AI agent used by staff.

Georges Elhedery, group CEO at HSBC, said: “AI is becoming one of the defining technologies of our time, allowing us to create a personalised experience for each customer, delivered in real time and at scale, while keeping human judgement, decision-making and accountability at the core.”

The deal could be a blueprint for the financial services industry, according to Thomas Kurian, CEO at Google Cloud.

For more personalised services to customers, HSBC will initially work on providing AI-driven tailored support for customers and real-time advice. To fight financial crime, HSBC will use AI and agentic AI to enable it to intervene twice as fast when risk is detected. Its AI assistant will reduce admin and client meeting preparation time from hours to minutes for thousands of staff. HSBC added that its strategy is to balance in-house teams with supplier agreements.

The bank recently announced its first AI chief as part of its wider plans to embed the technology across the company. David Rice, who has worked at HSBC for more than 19 years, moves from his role as chief operating officer at its corporate and institutional bank to the position.

The UK bank has had reported success. According to Evident’s banking AI adoption index, which tracks financial services AI adoption, HSBC was the only UK bank in the top 10.

Its work with Google brings it more relevant skills, which are in high demand. Evident CEO Alexandra Mousavizadeh said UK banks need to be more like Big Tech firms, such as Google, when it comes to their AI adoption if they are to catch up with their US counterparts.

Banks can save huge amounts in operating costs through AI, but they must use it to improve customer experiences and offerings or face reduced profits. According to McKinsey’s latest report, while AI savings could be up to 20%, taking account of the cost of the technology, banking industry profits could fall 9% as customers move money based on AI agent recommendations.

“The impact of savings, while welcome, won’t last,” McKinsey said. “As with earlier innovations, competition will likely erode the gains for banks and most of the benefits will accrue to customers over time.”

According to Lloyds Banking Group’s Financial institutions sentiment survey for 2025 banks are gaining huge benefits from AI, stating that 59% of surveyed firms reported AI-driven productivity gains in the past 12 months, compared with 32% in the 2024 survey.