Technological Disruption Issues and Its Impact on UK Banking Sector : Case Study of HSBC

Case Study Project

ACKNOWLEDGMENT
I'm expressing my gratitude with love and sincerity to them who were associated with me
to accomplish this project work. All the hard work, devotion towards duty and the love or
tolerance which my supervisor has shown I'm grateful to. At the end I want to thank my family
and friends for their involvement and cooperation in my data collection on conducting my
research work on the investigating technological disruption issues and its possible impact on UK
banking sector: A Case study of HSBC Holding Plc.

ABSTRACT
The whole research project which is to be conducted is based on investigating
technological disruption issues and its possible impact on UK banking sector: A Case study of
HSBC Holding Plc. Technological disruption will be impacting the banking sector of UK and
this will leading to customer dissatisfaction and their loss. In this context, there are about 20000
locations across UK from which financial transaction is possible. There is increase in digital
channels in order to communicate with customers. Innovation is highly effective and play
significant role as it includes banks fitted 536 branches that also includes video banking facilities
that was started in the year 2016. When clients are not able to use them in effective manner, then
it has negative impact. These are the few issues that are faced by people and it is important to
make sure that all the problems that are faced by them are properly considered and appropriate
steps are taken to solve them. It is able to help about 95% of the total population in UK and that
is over a million workers. Further, it also leads as a major international centre for cross border
banking, private banking, investment, etc.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................1
1.1 Introduction............................................................................................................................1
1.2 Reason and purpose of the research.......................................................................................2
1.3 Problem statement and research questions............................................................................2
1.4 Scope of the study..................................................................................................................3
1.5 Research method....................................................................................................................3
1.6 Significance of the study........................................................................................................3
1.7 Structure and division of chapters in research report.............................................................4
1.8 Summary of the chapter.........................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
2.1 Literature review of the industry............................................................................................6
2.2 Industry size...........................................................................................................................6
2.3 Growth rate............................................................................................................................7
2.4 Competitor analysis...............................................................................................................7
2.5 Situation analysis...................................................................................................................8
2.6 Proposed plan of analysis.......................................................................................................8
2.7 Relevant literature review....................................................................................................10
2.8 Summary of the chapter.......................................................................................................13
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................14
3.1 Explanation of research methodologies...............................................................................14
3.2 Secondary market research:.................................................................................................18
3.3 Reliability.............................................................................................................................19
3.4 Ethical issue:........................................................................................................................20
3.5 Validity:...............................................................................................................................20
3.6 Summary..............................................................................................................................21
CHAPTER 4: RESULTS AND DISCUSSIONS..........................................................................22
4.1 Strategic analysis:................................................................................................................22
4.2 Assessment of current positions:.........................................................................................25
4.3 Integrated assessment of analysis:.......................................................................................26
4.4 Selection of strategies for success:......................................................................................27

4.5 Findings from data collected:...............................................................................................28
4.6 Solutions for research..........................................................................................................31
4.7 Summary:.............................................................................................................................32
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................33
5.1 Conclusion:..........................................................................................................................33
5.2 Recommendations:...............................................................................................................33
5.3 Deciding on an action plan:.................................................................................................34
5.4 Limitation of study and scope of further research...............................................................34
5.5 Summary:.............................................................................................................................35
REFERENCES..............................................................................................................................36

CHAPTER 1: INTRODUCTION
1.1 Introduction
There few but large banks those are included in UK banking sector. In this context, it
includes the Royal bank of Scotland, Barclays, the Lloyds Group and HSBC. All these banks aim
at delivering people with services related with financial assistance. This is a type of oligopolistic
market in which only few firms are dominant. With respect to share, majority of holding is under
Lloyds Group which is 27.78% and second is Barclays with 18.52% of market share. At the time
of financial crisis, the UK banking sector went under a process of consolidation (Maditinos,
Chatzoudes and Theriou, 2011). Companies merged so that they can overcome the issues in
effective manner. With time there are many changes that have taken place in relation with
technology. The rate of people making use of their smart phones or laptops have increased.
There are changes identified due to less consumption of time.
Applications are available that enable to view their account details. Main focus of this
research is made on HSBC Holding Plc that serves around 38 million customers and operates
globally with 3900 offices at 67 countries. Main aim of this research is to determine the
technological disruptions that are faced by UK banking sector in resulting productivity crisis for
UK banks. There are drastic impact identified on workers’ productivity, bank reputation,
customer’s satisfaction and operational functionality. Apart from this, country is suffering a lot
due to technical errors and disruption, this has resulted in excessive consumer complaints (De
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Luca, Verona and Vicari, 2010). In order to carry out the research in effective manner, below
given are the aim and objectives that will be covered in the research:
Aim: The research study targeted at investigating technological disruption issues and its
possible impact on UK banking sector: A Case study of HSBC Holding Plc.
Objectives:
 To determine the significance of digital transformation in banking sector
 To find out reasons behind increasing prevalence of technological disruption faced by
HSBC Holding Plc
 To assess how technological failure impact HSBC bank’s online banking operations,
market reputation and customer satisfaction
 To suggest preventive measures to minimize technical failure problems and succeed
growth.
1.2 Reason and purpose of the research
Advancement in technology has helped customers to perform their tasks or operation in
effective manner. For companies, they are able to have strong relation with services users.
However, it is identified that UK banks are facing serious issues due to technology downtime.
More specifically, there are about 20 minutes of productivity that is lost on each employees due
to poor IT system. In respect with the case study, HSBC Holding Plc is also facing problems in
which the rate of complaints are increasing drastically and main cause of this type of issue is due
to failure in IT system. IT users employed in the factor experiences problems due to slow
functioning of system, slow internet connectivity, outdated software, poor equipment and many
others. Conducting research in this areas will be helpful enough to take up appropriate steps with
the help of which the banks will be able to contribute effectively towards economy of the
country.
1.3 Problem statement and research questions
As per current era, innovation and digital revolution has contribute effectively towards
making tremens change in financial sector. Main focuses of backs are towards digitalization.
This is done with the help of E-commerce, net banking, mobile applications, mobile banking,
etc. These enables to provide customers with flexibility, control to manage transaction and sense
of security. However, it is identified as per HSBC’s latest IT glitch has affected millions of
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people and their businesses. Similarly, in the year 2015, HSBC faced issue related with
technological breakdown which resulted in 275000 payments got delayed. Even after these years,
there is no research conducted to identify the main problem. Research is conducted to determine
the prevalence of technology downtime issues that are faced by HSBC bank and the possible
impact on performance.
Research questions
1. Why digitalization is necessary for the banking sector of the UK economy?
2. What are the causes of technological issues experiencing by HSBC Holding Plc?
3. How IT failure impact online functioning, consumer satisfaction and market image?
4. What are the preventive actions that HSBC Bank must undertake to minimize technical
issues?
1.4 Scope of the study
With time, there are many banks that have come up and they all aim at understanding the
issues that are faced by them and taking up appropriate steps through which the rate of
performance can be improved. The research will enable to determine the areas in which
improvement need to be made so that HSBC Holding Plc is able to provide better quality
services.
1.5 Research method
To carry out the research in effective manner, there are different types of research
methodologies that are included in the research. In this context, there are two different ways to
gather information. These are secondary and primary, among these two, the researcher will make
use of secondary data in which books, journals, online website, etc. will be taken in to
consideration. There are different websites that will help in gathering information for this
research topic. It will enable to come up with appropriate outcome for the research and it can be
carried out effectively and efficiently.
1.6 Significance of the study
As it was stated earlier that there is no research conducted before so it will be favourable
enough for those researchers who are aiming at conducting the research at this area in future. In
this context, theoretical data is considered as it will help to develop in depth understanding for
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