Article
HSBC exec: Banks are in an arms race when it comes to innovation
Banks have been in the transactional business for far too long, says Jeremy Balkin, head of Innovation at HSBC Bank USA. "We are in the financial services business; service is an experience — and that's not easy for banks to wrap their heads around."
September 24, 2019 by Amy Castor — Editor, Networld Media Group
Arguably, up until three or four years ago, banks scaled by building new branches. Now, if they want to grow, they have to find more creative ways.
Or in stronger terms, as Jeremy Balkin, head of innovation at HSBC Bank USA, puts it: Banks "are in an arms race, where innovation is what's going to separate the winners from the losers."
At BCX Summit in Chicago on Monday evening, Balkin spoke to a crowd of bankers about the struggles they face when competing in this new world of customer experience.
At various points in his keynote, he stressed that banks have been "unloved for too long" and are widely viewed as "lagging behind" in technology and service.
"Today, we are being judged by consumers based on their last, best customer experience," the native Australian, who now calls New York City his home, told the audience. "And chances are, it wasn't with us, but Amazon, Yelp, Uber or PayPal."
He went on to add that banks have been in the transactional business for far too long.
"Transactions are binary, boring and one dimensional," he said. "We are in the financial services business; service is an experience — and that's not easy for banks to wrap their heads around."
Balkin spoke about two recent innovations — wearables and a robot — at HSBC's flagship retail branch, which occupies a massive footprint and three floors, at 452 Fifth Avenue in Manhattan.
Wearables
"We wanted to optimize production among our frontline staff," Balkin said, noting that staff at the branch had long been tethered to desks and fixed communication devices.
In 2018, as a way to make communication more seamless, the branch began prototyping wearable devices in the form of customized Samsung Gear S3 smartwatches.
The basement of the building sits under 2 feet of concrete, where cell phone coverage is all but nonexistent. But with the wearables, staff were able to send quick messages back and forth while on the move between floors.
"We put preset messages on wearables," he said, noting that everyone in the branch wears the devices. Sending a message such as 'You're customer is here,' involves the quick turn of a bezel. When someone receives a message, their watch vibrates, and they can instantly send a reply, such as 'I'm on my way.' "The interaction takes place in a fraction of a second," Balkin said.
An interactive robot
In another move last year, HSBC's flagship Manhattan branch revealed Pepper, a 4-foot robot built by SoftBank Robotics to imitate human characteristics and improve customer experience.
"We wanted to turn our flagship branch into a destination," Balkin said.
As the result of a comprehensive three-month study, the bank learned that three quarters of its interactions with customers were binary one-way interactions, like "Where is the nearest ATM?" or "What is the weather?," he said.
The bank designed Pepper to gamify those basic interactions, educate customers and point them in the right directions. The result was an increase in ATM transaction volumes, a notable rise in new credit card applications and record foot traffic, according to Balkin.
"It is all about customer expectations and combining different technologies to find a way to do this," he said.
About Amy Castor
Amy Castor has more than 20 years of experience in journalism and mass communications. In the last several years, she has gotten particularly interested cryptocurrencies, blockchain technologies and other evolving forms of payment. Her work has appeared in consumer and trade publications throughout the U.S., including CoinDesk, Forbes, and Bitcoin Magazine. She is now the editor of ATMmarketplace.com and WorldofMoney.com
