REGTECH at HSBC Harvard Case Solution & Analysis

REGTECH at HSBC Harvard Case Studies

Introduction

HSBC is one of the largest organizations of financial services and banking which is founded in 1865and its headquarters of HSBC is located in London. The organization initially operated its operations as Hong Kong and Shanghai Banking Corporation Limited however the organization have strong market shares and customer value in the market. The organization grew via acquisition and diversification of products while they initially operated acquisitions in the UK and then Asia. Furthermore, HSBC has 72000 offices across 85 countries and has over 8.5 million personal and almost 3.6 commercial customers. (Hossain, 2016)

The company have a strong and wide range of customers market in the national as well as in the international market. However, the company is known for its brand legacy where HSBC has strong brand recognition as compared to other companies However, HSBC facing certain issues regarding risk management which have a great impact on the company hence the company costs billions of dollars due to the non-financial risks. HSBC has a traditional system for risk management but according to Cook (Global Head of operational risk), the efficiency and sustainability of the traditional system are not good so that is why he decided to run a pilot test of REGTECH solution provider which has greater efficiency while having low-cost compared to the traditional system. Furthermore, the well-known services which are providing by HSBC include international money transfer, International account opening, HSBC premier worldwide travel insurance, margin trade facilities and online banking and reporting services. The main vision of HSBC is to become the world respected services brand and provide the best services to their clients.

Problem Statement

Although HSBC is one of the largest banking and financial services providers and has a brand legacy as compared to its rivals. However, the company is facing problems regarding the regulation of non-financial risks so that is why HSBC cost billions of Dollars as fines due to the non-financial risks. Furthermore, the company have a traditional regulatory system but Mark Cook the Global head of operational risk is not sure about the performance of the traditional system so, he had to choose one option i-e traditional and REGTECH. Due to efficiency and sustainability issues, Cook prefers REGTECH Solution to run a pilot test which have great sustainability and efficiency as well as lower cost compared to the traditional system. Furthermore, a firm that provides the REGTECH Solution has not had a fully advanced technology as well as it was a small startup so, Cooke speculated how far trust a technology from a startup firm with a few employees and nearly no revenue to encounter the requirements of global operation as well as World-leading bank. So, Mark Cook has facing complications regarding taking the decision of whether should he select the REGTECH Solution provider or not? (Aiyesha Dey, October 09, 2019)

Situational Analysis

Internal Analysis: SWOT

Strength

HSBC has proven to be highly capitalized, and it is not likely to need government assistance in times of crisis. Its diverse workforce is well-trained and motivated. HSBC has adopted a hybrid working model, enabling employees to work both in their physical offices and in virtual offices. The bank also focuses on employee mental health. This gives it a competitive edge over other financial institutions.

The company only invests in countries that are politically stable, which limits its expansion in certain countries. In countries where political instability is high, HSBC must work in partnership with smaller organizations. In other countries, HSBC is required to follow government regulations and laws, but this has not prevented it from being successful. HSBC’s online platform is an advantage for capturing new customers, and it can serve them better with big data analytics. Furthermore, the government’s push to go green opens up opportunities for HSBC products.

HSBC is one of the world’s largest financial service companies. With over 128 million customers worldwide, the bank enjoys an international presence. Its London & NY listings provide access to the US and UK capital markets. In addition to these, it caters to a variety of customer segments. Using a SWOT analysis, HSBC can improve its competitive position in the financial services sector.

HSBC’s strong free cash flows allow it to expand into new product segments. In addition, the bank has a proven track record of successfully integrating complementary firms. In the last few years, HSBC has acquired a number of technology companies, building up its supply chain and streamlining its operations. The company can enhance its competitive advantage by focusing on its weaknesses and enhancing its strategic positioning. However, HSBC may have room for improvement in its product range.

Weaknesses

HSBC has been successful in many areas of the financial services industry. However, its lack of strategic positioning and competitive advantage have resulted in losses of market share in niche categories. It also needs to strengthen its internal feedback mechanism, especially with its sales force, in order to improve its services. In addition, HSBC has been setting up banks under different names for over 100 years, resulting in lack of brand recognition.

One of its weaknesses is its lack of understanding of product demand. It misses sales opportunities more often than competitors. It maintains higher levels of inventory in the channel and in-house, compared to competitors. Its profitability ratio is lower than industry average. Despite its weaknesses, HSBC has an opportunity to enter a new emerging market because of a recent government agreement. However, the company may have to adjust its reporting and investment practices in order to meet the regulatory requirements.

HSBC has not been very successful in using social media to advertise. It has failed to establish a strong online presence. It has also had trouble leveraging its global presence in social media. Although this has resulted in less business, HSBC is still one of the largest banking organizations in the world. HSBC has a global presence, serving more than 128 million customers in 190 countries.

HSBC faces stiff competition from rivals. As a result, it must develop strategic moves to remain a leader in the industry. The global reach of the organization brings with it significant economic risks. The company has been victimized by online frauds, and its online presence has contributed to immense losses. It has faced technical challenges and lost many customers. However, despite these shortcomings, HSBC has managed to make use of technology to improve its business. Its customer service standards are generally high. The company strives to maintain strong relationships with its customers.

Opportunities

HSBC Financial Services Company (HSBC) is an international bank that offers a range of banking products and services. It has over 8,000 offices in 87 countries, including the Asia-Pacific region, Europe and the Americas. HSBC is listed on the New York Stock Exchange as American Depositary Receipts (ADRs). HSBC’s diverse business activities include personal financial services, investment banking, commercial banking and receivables finance….

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