The timeline of events, why HSBCs international payments project was a step in the right direction, the lessons they can learn, and some myths debunked
I listened to this one! Loved the bit when you had to swear and could not bleep it out! Haha
Excellent - and not as ranty as you think it is. 150mil is pretty eye-watering and I agree about your customer acquisition strategy using data they have and being smart about it. If only they'd got some smart, experienced product people involved from the off, eh?
Thanks Deanna. Not sure it’ll be a regular thing but for the less technical deep dives it works.
Yeah agree. Some big issues including the funding, but spot on, being a bit smarter on the product and acquisition strategy might have bought them a little more runaway.
I've got a slightly different view. The best things about HSBC are its brand and large customer base. Any proposition that doesn't leverage these two strengths is doomed. Instead of a launching a new business, HSBC should incorporate Wise-like functionality within its standard consumer banking product set and spend £150m marketing this.
The problem is that big banks often don't really have agreement on their long-term strategy, everyone is just trying to survive internally from one year to the next. Specifically, here HSBC would not put Wise-like functionality in their standard app as it would cannibalise FX margins too much. Their consumer business has a P&L which requires FX margins to stay high, at the same time they launch a subsidiary whose business model is low FX fees - it doesn't make sense from out outside, but from the inside it makes total sense, and this is why these things don't work.
Long-term strategy agreement is a problem. And especially when senior leadership changes. In this case the objective was to compete with Wise, Revolut et al on international payments but the proposition wasn't given anywhere near enough time to prove that it was a success OR a failure IMO
On the brand, I think the overarching strategy was to attract new customers AND give value to existing customers so in that respect the strategy to launch and separate brand and entity made sense (loosely coupled with the HSBC brand with the logo). Building within HSBC would have made it even more difficult from a tech and politics perspective IMO.
Yes they could have done a lot better on giving value to existing customers and tapping into that base but I think that was a fundamental problem with the acquisition strategy, early product and the fact that they weren’t given a lot of time in the wild.
I listened to this one! Loved the bit when you had to swear and could not bleep it out! Haha
Excellent - and not as ranty as you think it is. 150mil is pretty eye-watering and I agree about your customer acquisition strategy using data they have and being smart about it. If only they'd got some smart, experienced product people involved from the off, eh?
Thanks Deanna. Not sure it’ll be a regular thing but for the less technical deep dives it works.
Yeah agree. Some big issues including the funding, but spot on, being a bit smarter on the product and acquisition strategy might have bought them a little more runaway.
Still. A step in the right direction 🙏🏽
Great post, Jas. Always a fascinating read.
I've got a slightly different view. The best things about HSBC are its brand and large customer base. Any proposition that doesn't leverage these two strengths is doomed. Instead of a launching a new business, HSBC should incorporate Wise-like functionality within its standard consumer banking product set and spend £150m marketing this.
The problem is that big banks often don't really have agreement on their long-term strategy, everyone is just trying to survive internally from one year to the next. Specifically, here HSBC would not put Wise-like functionality in their standard app as it would cannibalise FX margins too much. Their consumer business has a P&L which requires FX margins to stay high, at the same time they launch a subsidiary whose business model is low FX fees - it doesn't make sense from out outside, but from the inside it makes total sense, and this is why these things don't work.
Long-term strategy agreement is a problem. And especially when senior leadership changes. In this case the objective was to compete with Wise, Revolut et al on international payments but the proposition wasn't given anywhere near enough time to prove that it was a success OR a failure IMO
Thanks Geoff. I agree with the customer base.
On the brand, I think the overarching strategy was to attract new customers AND give value to existing customers so in that respect the strategy to launch and separate brand and entity made sense (loosely coupled with the HSBC brand with the logo). Building within HSBC would have made it even more difficult from a tech and politics perspective IMO.
Yes they could have done a lot better on giving value to existing customers and tapping into that base but I think that was a fundamental problem with the acquisition strategy, early product and the fact that they weren’t given a lot of time in the wild.