Finance and Management - Assignment Solution

Finance and
Management

1. EXECUTIVE SUMMARY
Customer engagement is a main element which is required by all the companies for the
purpose of executing business in effective manner. HSBC is currently dealing with the issue of
decreased client's engagement which is taking place due to lower interest rate, other attractive
financial instruments, improper taxation system and unsatisfied clients. It is very important for
the business entities to formulate customer focused strategies and policies by taking their
preferences in to consideration so that large number of clients can be attracted toward the
company. High involvement of patronages is very important for banks because it is beneficial for
to attain higher profits and market share. In order to enhance satisfaction level of clientele
managers are required to find appropriate ways in which all the problems taking place due to
lack of client's engagement can be resolved. The most appropriate tool that can help to overcome
this problematic situation is communicating with clients on regular basis in order to determine
their issues and queries. Managers of HSBC are required to maintain its customer engagement as
it is needed to achieve sustainability and development. It is vital for the bank to win trust of
clients by establishing good relations with them that will be beneficial for it because highly
satisfied people refer services to their family, friends, relatives and colleagues. Managers of
HSBC should interact with clients and provide them information of benefits of banking services
in order to retain them for a long period. Different benefits of saving account, fixed and recurring
deposits are no risk and compound interest. If clients get aware of these elements then it may
help to win their engagement. It is vital for HSBC to form different strategies such as using
innovative technology, analysing client's journey

Table of Contents
1. EXECUTIVE SUMMARY.........................................................................................................2
2. INTRODUCTION.......................................................................................................................1
3. LITERATURE REVIEW............................................................................................................5
Customer's engagement in banking sector...................................................................................5
Benefits of customer's engagement for banks..............................................................................7
Impact of lack of customer's engagement..................................................................................10
Reasons behind the decrement of customer's engagement in banking sector............................12
The ways in which the issue can be dealt and customer's involvement can be increased.........14
4. RESEARCH METHODOLOGY...............................................................................................16
5. DATA ANALYSIS AND FINDINGS......................................................................................23
Analysis of primary research.....................................................................................................23
Analysis of secondary research..................................................................................................39
6. CONCLUSIONS AND RECOMMENDATIONS....................................................................41
Recommendations......................................................................................................................42
REFERENCES..............................................................................................................................45

2. INTRODUCTION
Overview
The topic which is selected for this report is decreasing customer's engagement in
banking sector. It is resulting in decreased profits of the industry because clients are getting
attracted towards other financial instruments such as shares, debentures, mutual funds, bonds etc.
As all of these securities provide better interest rate so the buyers choose them because they want
to earn higher returns on their investments (Goyal and Srivastava, 2015). Another reason for
selecting these options is taxation because banks charge high TDS on interest if it crosses the
limit of 10000 pound. If a customer is not having a Pan id then the rate of TDS will be doubled
by the bank. In case of other financial assets if these are kept by the holders for at least three
years then the generated return will be considered as long term gain. This will be indexed and
then taxable amount is calculated on the same. Nowadays banks are trying to make banking easy
for the clients so that their engagement can be enhanced and the issues that are taking place due
to this problems. The consequences are reduction in profitability, revenues, number of customers
etc. The major thing that they want to acquire is great value from their financial products and
services. If their bank is able to fulfil all their requirements then their engagement can be
increased. Currently in banking sector all the organisations are facing this problem and for all of
them it is very important to find best ways to overcome them. These enterprises are now
modifying their customer services in order to make them highly responsive and supportive so
that the problems of decreasing engagement can be dealt effectively.
Background
Hong Kong and Shanghai Banking Corporation (HSBC) Plc is one of the largest banking
sector organisations that are operating their business all around the world. There are more then
85000 employees are working in HSBC including its subsidiaries. Thomas Sutherland had
founded it in year 1865 in Hong Kong. It has been ranked as the 7th biggest bank in the world. In
year 2017 total revenues of this organisation were 3984.39 Pound Crores. It headquarters are in
London and Birmingham, UK. The business is executed in more then 80 countries by HSBC.
Customer's engagement is continuously decreasing in this bank because there are various other
options available in the market where clients may get good returns on their investments. Now the
bank is trying enhance their engagement so that its profitability and number of petronage can be
raised. The ways that are adopted by HSBC are communicating with the individuals and assess
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their problems, providing them good schemes that may increase their interest in banking,
increasing visibility for the clients and becoming pragmatic.
Statement of the problem
Currently the main issue which is affecting the banking sector is related to decreasing
customer's engagement. It is resulting in reduced revenues and profitability of banks such as
HSBC. For all the organisations that are operating business under banking industry it is essential
to find the best ways such as enhancing launching attractive schemes that may deal with this
issue in appropriate manner (Bowden, Gabbott and Naumann, 2015). Statement for this problem
is “Negative impacts of continuous reduction in clientele's engagement on banking sector.”
Conceptual framework
In current era banking industry is facing various issues such as decreased profitability,
reduction in revenues etc. When banks tried to figure out the cause of these problems then they
find that customer's engagement in this industry is declining because clients are getting attracted
towards other options such as mutual funds, shares, bonds, debentures etc. For banks like HSBC
it is very important to implement effective solutions so that such type of consequences can be
resolved (Levy, 2014).
Purpose of the study
Main purpose of this research is to enhance knowledge regarding the issues that are
taking place in banking sector and figure out the ways that can be adopted by the organisations in
order to respond the problems appropriately. Another purpose is to find the impacts of declining
engagement of clients in banking sector so that appropriate solutions for such type of
consequences can be provided to HSBC. It may help the organisations to deal with all the
problematic situations effectively (Yoo and Arnold, 2014).
Research Aim
“To determine the impacts of decreasing customers engagement on banking sector.”
Research objectives
 To understand the concept of customer's engagement in banking industry.
 To analyse the benefits of customer's engagement for banking sector.
 To assess the impacts of reducing customer's engagement on banks.
 To identify the factors and reasons which have resulted in the problem of continuous
decrement of client's engagement.
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 To evaluate the ways that may help banks to overcome the issue and enhance customer's
engagement.
Research Questions
 What is engagement of customer's in banking industry?
 Is there any benefit of customer's engagement for banks?
 Do lack of client's engagement leave impact on banks?
 Why decrement of customer's engagement is taking place in banking industry?
 What are the ways that may help banks to deal with the issue and increase involvement of
customers?
Key terms
There are various types of key terms that are going to be discussed by the researcher in
this research. All of them are as follows:
 Customers: These are the individuals who buy goods or services from a particular
organisation. In this research customers are the buyers of bank's products such as fixed
deposit, saving accounts etc.
 Customer's engagement: It is a communication connection between customer and an
organisation. For banks like HSBC and other financial institutions it is very important to
enhance patronage's engagement so that their long as well as short term goals can be
achieved (Thakur, 2016).
 Banking sector: It is a part of the economy which is responsible for rendering financial
services to the individuals. Different types of assets such as CASA (Current and Saving
Accounts), Fixed deposits etc. HSBC is a part of banking industry which is facing issues
regarding lack of customer's engagement (Pick, 2014). Financial instruments: All the securities that are offered by finance and banking sector
are considered as financial instruments. These are shares, debentures, mutual funds,
bonds etc. All of them are bought by the customers in order to achieve higher returns on
their investments (Rezghi Rostami, Valmohammadi and Yousefpoor, 2014).
Procedure
In order to successfully complete the study different types of procedures and
methodologies are going to be used by the researcher. The research design which is used in this
report is descriptive. Research philosophy for this assignment is interpretivism and the approach
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which is used is inductive. The researcher has used primary as well as secondary data for the
purpose of appropriate research. Questionnaires are used to collect primary data and different
types of websites are used to get secondary information (Mohan, Mathur and Reddy, 2015).
Significance
This research will help the readers to enhance their knowledge regarding the issue of
decreasing customer's engagement which is faced by banking sector in current era. It will
provide detailed information of the solutions that can be used by the banks such as HSBC to
overcome the situation.
Limitations
While collecting primary data the researcher have faced various limitations such as the
employees of HSBC were not ready to provide them information, the data which is collected can
be biased because the workers are not allowed to share private content or internal information.
Organisation of the study
This research is organised in different subsections and all of them are as follows:
Introduction: In this section the researcher has provided basic information regarding the
issue which is faced by HSBC Plc. The problem is lack of customer's engagement in banking
sector. It is also creating other issues such as reduction in profitability and liquidity of the
organisation.
Literature review: Point of views of different persons regarding the topics are
considered in this section. It helps the researcher to conduct an appropriate research and provide
effective information to the readers. The data which is recorded in literature review is based on
current knowledge that includes substantive findings (King, 2014).
Research methodology: In this section information regarding research approach, design,
philosophy and methods of data collection is recorded. In this report descriptive design,
inductive approach, primary and secondary sources of information are used by the researcher.
Data analysis: It is the process of inspecting, cleansing, modelling and transforming
appropriate information which is collected from different sources such as primary or secondary.
Primary data is collected from questionnaires, interviews, survey etc. and secondary is received
from online sources, websites, books and journals.
Conclusion and recommendations: It is the last section of the research in which
research add a summary of the report and the conclusion of the report. Recommendations
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regarding the solution which should be selected by the organisation in order to deal with the
problems are also going to be provided at the end of the report. This section may guide the
observers to get brief information of the whole research and the conclusion which is provided by
the researcher after completing the report.
3. LITERATURE REVIEW
Literature review includes the current knowledge and findings that are analysed by the
researcher. It is the theoretical and methodological contributions to a particular topic chosen to
complete the research. In this section answers for the research questions are founded. The
answers are provided from the point of view of different authors who have already studied the
topic and provided their judgement. It is a method which helps to find out solutions for the
research problems. The researcher is going to find the appropriate answers for all the research
questions that are formed earlier (Indrianti, 2016).
Customer's engagement in banking sector
As per the views of Wang and Kim, (2017) Customer's engagement is a process of
keeping customers engaged in the organisational activities so that all the operational activities
can be conducted in appropriate manner. For all the banking sector companies it is vital to keep
all the clients engaged in order to generate high revenues. If the organisations which are
operating business under baking industry are not able to engage customers in their activities then
it is not possible for them to attain long term sustainability in the organisation (Kandampully,
Zhang and Bilgihan, 2015).
According to Pansari and Kumar, (2017) customer's engagement can be defined as the
way of communication and maintaining relations with the clients by providing them such
services that may garb their attention. For all the banks like HSBC it is very important to
enhance engagement of customers so that other problems such reduction in profits and liquidity
that are taking place due to this issue can be controlled. If an organisation which is operating its
business under banking sector is not able to manage the involvement of them then it is not
possible for that enterprise to sustain in the market. When there are no clients then it is
impossible to operate business without them. Customers that are highly engaged, helps to
increase revenues as they buy more and also promotes if they are satisfied with the services. In
banking sector client's involvement is very important because if there are no clientele then it will
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become difficult to execute operational activities and generate profits. Needs and demands
always changes with time and technology (Tojib and Khajehzadeh, 2017). Patronages always
look for something new and interesting and in service sector it is difficult to make changes and
launch a innovative services according to their needs. It directly affect their engagement as their
satisfaction level decreases. Currently competition in banking and finance sector is increasing
and creating challenges for the organisations. For banks like HSBC it is very important to form
customer focused strategies so that they can be retained and level of their involvement get
enhanced. It will be beneficial for the enterprise as it can help to achieve competitive advantage
and deal with competitors appropriately.
According to Hapsari, Clemes and Dean, (2017) Customer engagement in banking
industry can be defined as the interaction between customer and the organisations regarding the
services that are offered by it. Currently banks like HSBC are facing the issue of lack of
customer's engagement because of other financial instruments that provides them higher returns
on their investments. When clients are highly satisfied and get effective responses on their
queries by the banks then it results in their engagement in organisational schemes. It is essential
for banks to maintain involvement of customers so that operational activities can be executed
without any issue (Shukla, Banerjee and Singh, 2016). Higher engagement results in good
profitability and liquidity because clients will buy more and more services if the organisations
are offering them good deals. It describes the means which is used by enterprises to foster
relationship with their prospects and customers. As banking business runs on good relations so if
banks are willing to enhance customer's engagement then it is very important to maintain them.
When there is a positive bond between a client and the bank then it would be beneficial for the
entity as it may result in higher profitability. It can be established by interacting with them and
taking feedback on regular basis as it is beneficial while trying to know about the requirements
of clients. In banking industry maintaining good relations is required because in this sector
business runs on relationships.
According to Durkin, Mulholland and McCartan, (2015) in banking industry customer
engagement can be defined as an essential element which is required to operate business
successfully. It is all about encouraging interaction with client's and try to analyse their
experience with the services that are provided by the organisations that are executing business
under banking sector. Effective customer engagement fosters loyalty of clients and lead the
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enterprise towards growth. For banks like HSBC it is a vital substance because when there is no
involvement of clients then it will result in inappropriate business operations. Profitability and
liquidity will also get decreased because the number of customers will be reduced. To maintain
the engagement of them the bank should establish a good connection so that all the queries and
issues regarding the banking services can be resolved (Maslowska, Malthouse and Collinger,
2016). Development in emotional relations, sharing of appropriate information, creating
informational tour to provide content regarding new schemes, implementing latest technology
etc. are the steps that are very helpful while planning to engage customers. Sometimes online
engagement is also very important because it helps banks to be aware of activities of clients and
their choices. There are various ways that can be adopted by HSBC and other banks for better
customer experience which is important to engage them. One of them is being digital in which
new applications can be launch, online visibility can be enhanced. With the help of this solution
basic requirements and issues of clients can be analysed and identified.
According to Mozammel and Haan, (2016) Customer engagement is a tool which is
required for successful execution of a business which is a part of banking industry. If a company
is not having highly engaged clients then it is not possible to achieve business goals such as
customer satisfaction, profit maximisation and development. For all the banks it is vital to make
effective strategies that can help to identify requirements of patronage and then try to offer them
such services that they are willing to buy. It can help to enhance their engagement and resolve
the issues such as decreased profits and liquidity that are taking place due to this situation
(Abdolvand, Baradaran and Albadvi, 2015).
Benefits of customer's engagement for banks
For all the organisations customer's engagement is very important whether it is a part of
banking industry or not. But for banks it is essential because when there is a lack of engagement
of clients then it is not possible for it to operate business operations in appropriate manner.
According to Goyal and Srivastava, (2015) customer's engagement for banks is very
important because it can help to generate good revenues and conduct operation in appropriate
manner. It results in higher profits because clients will buy more and more products that are
offered by bank. When there are highly engaged patronages then brand loyalty of them will also
be high that may help to appropriately operate business and accomplish all the predetermined
goals that are formed previously. For large banks such as HSBC it is very beneficial as it can
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help them to be position where it is willing to reach. If organisations provide good experience to
the clients then it results in higher satisfaction level of them which is important for customer's
engagement. Another benefits of it are good market image, high rate of employee retention, low
employee turnover, good profits, satisfied clients etc. Banks like HSBC should maintain
customer's engagement as it is required to operate business in appropriate manner. As profits get
declined when clients are not taking interest in banking so it is very important for all the banking
sector organisations to offer such financial products to the clientele that can increase their
satisfaction level. Brand loyal customers always help on mouth publicity because they refer the
services to their friends, family, collogues and other people they know (Dewnarain, Ramkissoon
and Mavondo, 2019). It helps to increase profits that can be used for successful business
execution.
According to Islam and Rahman, (2017) customer's engagement is advantageous for
banks as it enhances loyalty of clients, raise profits, liquidity etc. by increasing number of
customers. Improvement in experience of patronages is vital for all the organisations that are part
of banking industry because it is very difficult to retain customers by rendering them services as
these are intangible in nature. When an enterprise such as HSBC understands the needs and
expectations of clients, encourages their involvement, figure out issues that are resulting in
decreased engagement of them then it can help to successfully operate business. Other benefits
of it are good mouth marketing, bank's reputation, reduce churn, increase retention of patronages
and new development opportunity. Fully engaged customers can help to make huge increment in
revenues than average. If banks like HSBC does not have any a good strategy for client's
involvement then it is possible that the organisation may loose a chance to interact with clientele
and build a good relationship with them. It is a type of long term investment for an organisation
because it is helps to build relations with clients. Maintaining engagement of clients is a time
consuming process but it always results positively (Kumar and et.al., 2019). All the expenses that
are made by an organisation to enhance engagement of clientele are going to be recovered
because when it is increased then revenues get higher. The right steps that are taken to maintain
relationship with clients can mean long lasting ties that continue to be profitable even year down
the road.
According to Pick, (2014), customer's engagement is beneficial for the organisations that
are related to banking industry because it helps to make loyal clients, healthy relations and it also
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creates natural evangelists. All these elements can help to achieve higher profits and execute
business in appropriate manner. The main benefit of it is that it provides real and lasting returns
for the banks. Proper investment in an engagement program strengthen the market position,
increases organic referrals and ultimately life the bottom line. Highly engaged and satisfied
customers works as mouth marketers and refer the services to other individuals. Banks such as
HSBC should try to invest in involvement of clientele so that the problems that are affecting its
operational efficiency can be resolved in effective way (Skinner, 2014). Best solution for the
issue of lack of customer's engagement is bank is offering attractive deals with higher rate of
return on investment to them and grab their attention. Continuous modification in policies is
essential for HSBC because it can help to win trust of clients and retain them for a long period by
increasing their involvement. Two unexpected benefits of it are stronger brand image and mouth
publicity. When the image of the bank is good and powerful then it is to possible for competitors
and substitutes to capture the market share because customers will never switch to other services
or financial products if they are satisfied. In mouth publicity clientele promote banks because
they are highly satisfied with the services and the deals that are acquired by them from financial
institutions.
As per the views of Pérez and Rodríguez Del Bosque, (2015) for all the banking sector
organisations customer's engagement is beneficial because it can help them to increase their
profits, liquidity and brand loyalty. When there are highly satisfied clients then it will also result
in enhanced operational efficiency which is required to successfully conduct operational
activities. The managers of HSBC are required to pay attention on the issues that are taking place
due to low client's engagement because it is required for the betterment of the organisation. The
main benefit of customer's engagement is higher incomes because the engaged clients will buy
more and promote more because their satisfaction level is very high and they are happy with the
services that are rendered by bank to them. If a bank like HSBC achieve success in engaging
customers then it can help to attain long term business goals such as profit maximisation,
customer satisfaction etc. When there are end number of clients then it becomes easy to operate
business activities because in this situation the organisation have appropriate funds that can be
used to conduct all the operations. There are various benefits of customer's engagement for
banking industry (Beckers, Risselada and Verhoef, 2014). These are mouth publicity, satisfied
customers, high profitability, increased revenues as compare to average etc.
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Impact of lack of customer's engagement
According to Siddiqi, (2015) customer's engagement leave positive as well as negative
impacts on banks such as HSBC. When it is high then it will be favourable for the organisation
and in opposite situation it will be adverse condition for the enterprise. Lack involvement of
clients unfavourably affect organisational operations and efficiency to perform them. The major
impacts of it are reduced profits, funds, number of customers etc. It s very important for banks to
find appropriate ways to overcome this situation otherwise it may lead towards huge losses.
When there are no engaged customers then there will be not a single way for companies to
generate revenues. It has major financial impacts on banking industry. The main reason behind
this is low interest rate and high TDS on the services that are provided by the banks (Paul, 2014).
According to Kunz and et.al., (2017) currently customer's engagement is continuously
decreasing and leaving negative impacts on the banking industry. The major unfavourable effect
of it is reduction in revenues and profitability because when there are no clients then banks wont
be able to conduct operation and generate incomes. It is very important for all the organisations
operating business under banking sector to implement such strategies that may result in higher
engagement of the patronage. Involvement of clients can be increased by improving their
experience with the services that are offered to them. When it is improved then it may help to
engage customers, motivate employees etc. so that all the tasks can be accomplish successfully.
When there is lack of client's engagement in banks like HSBC then it leaves negative impact on
operations and other activities that are performed by it. The major impact of this issue is
continuous decrement in profits and reduced revenues because customers does not take interest
in banks and try to find other option that can provide them higher returns on this investments.
Lack of engaged patronages is the issue which is faced by most of the banks like HSBC as it is
one of the largest banks in the world so it is essential for the directors and managers to find
appropriate ways so that solution for this problem can be figured out. Proper concentration is a
major requirement which is important to analyse the main point of distraction of clientele from
banking activities (Moser, 2015). When appropriate solutions are identified then the higher
authority is required to implement them effectively so that all of them can respond positively and
in favour of the organisation.
According to Giannakis-Bompolis and Boutsouki, (2014) customer's engagement is very
important for banks and if there is a lack of it then it may affect the whole organisation and its
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operations. The enterprises needs to find out that they have high involvement of patronages or it
is low. When it is observed then the next step which is required to be taken is formulating
effective strategies so that the problem can be resolved. Main reason behind this problematic
situation is bad customer service which affects all the areas of business and functional
departments. In this condition best employees are forced to attract customers and sale products.
If the pressure is not bearable for them then they leave the job and it results in employee
turnover. This is another negative impact of lack of clients engagement in banks. Banks offer
low interest rates and change high TDS on saving accounts and fixed deposits. This issue
decreases curiosity of customers in banks and raise their attraction towards other financial
instruments such as mutual funds, shares, bonds and debentures. To retain the patronages banks
are required to offer them good returns on their investments. Nowadays customers are getting
distracted from banking products towards other financial instruments because they get higher
returns on them (Yanagawa, 2018). It is negatively affecting the banking business as clients are
not taking interest in opening saving accounts, making fixed or recurring deposit etc.
According to Beckers, Risselada and Verhoef, (2014) lack of customers engagement is a
major issue which is affecting banking industry and all the companies that are operating business
under this sector. While formulating strategies to overcome this problem the managers and other
executives are required to focus on the requirements and choices of customers so that they can be
engaged with the banks. When banking companies fails to fulfil the expectations of the
patronages then this situation takes place and leave adverse impact on profitability, revenues,
rate of employee retention, liquidity etc. To deal with all these challenges the enterprises are
required to take appropriate actions and implement attractive strategy. Banks that are highly
focused on customer's engagement achieve massive success because they have loyal clients who
promotes their services and make contribution in development of organisation. Digital presence
is the way of knowing the patronages in more detail, that may guide to make changes in existing
policies of the entity so that clientele can be engaged in banking processes. Proper and timely
interaction with customers is also very important because it leads through out the way of
engaging people in banks. It will also be beneficial to get information of the expectations that are
required to be fulfilled by organisation in order to engage customers (Hallencreutz and Parmler,
2019).
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As per the views of Esteban-Sanchez, de la Cuesta-Gonzalez and Paredes-Gazquez,
(2017) when there is no customer's engagement in banks then it will result negatively for
banking industry and the organisations that are operating business under this sector. There are
various types of issues that are taking place due to this situation. These are reduction in
profitability and liquidity, decreased number of customers, employee turnover etc. When a back
deal with such type of situation then the employees are forced to generate revenues and some of
them does not bear pressure and eave the jobs. Sometimes bank evict its workers from their jobs
due to lack of finance and continuous losses that are taking place due to less interaction of clients
with the organisation. Lack of client's involvement in banks is a negative situation which is faced
by most of the organisations that are part of banking industry (Mulengani Katwalo and Isendi
Muhanji, 2014).
Reasons behind the decrement of customer's engagement in banking sector
There are various causes of decreasing customer's engagement in banking sector. For all
the banks like HSBC it is essential to form appropriate strategies that can result in resolution of
problems. Various authors have presented their own views regarding the reasons of lack of
clients engagement in banking industry.
According to Farah, (2017) currently customer's engagement in banking sector is
decreasing due to various factors such as lower interest rare, TDS etc. Customers are attracting
towards other options such as mutual funds, shares, debentures and other securities because their
rate of return is higher as compare to saving account and fixed deposits. While buying any
financial instruments from any organisation patronages always figure out its risk and return and
choose the alternative which is able to provide higher profits to them on their investments. HSBC
is a bank which is also dealing with the same issue because clients are not preferring banks to
invest their money due to lower rate of interest. Switching behaviour of customers is troubling
the bank and resulting in reduced profitability and revenues because when clients does not make
any transaction then it is not possible for a bank to generate income. To overcome all the issues
the banks are required to provide attractive schemes to the clients so that their curiosity to buy
CASA, fixed and recurring deposits can be enhanced. The banks should firstly find out the
causes and then try to implement strategies that can be used to deal with problems. For this
purpose appropriate communication session could be conduced by organisations in which
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employees may interact with clients and try to find out the reasons that are resulting in decreased
engagement (Fang and Zhang, 2016).
According to Abdou, English and Adewunmi, (2014) decrement in customer's
engagement in banking industry is taking place due to various reasons. When banks does not
take timely or regular feedbacks from their clients, reputation of the organisation is not good in
the market, rate of return on investments is low, transparency is not appropriate, taxation rates
are higher as compare to other financial instruments such as shares and mutual funds etc. are the
causes of decreased engagement of clients in banking industry. Banks such as HSBC charge
TDS at 10% when amount of interest crosses the limit of 10000 pounds and if the customers
does not have PAN card then the rate is being doubled. It is reason why patronages try to ignore
to make investments in banks. When there is a transparency level between bank and clients then
it can help to resolve the issues properly by communication and interacting with them and
providing them information regarding the benefits of products that are offered by organisation.
When there are end number of loyal customers then it may help to increase revenues and sales of
the banks. The main issues of decreasing client's engagement are lower returns on banking
services and lack of timely interaction with them. Banks are now trying to resolve the problems
by becoming digital and communicating with the patronages on regular basis (Mende and Van
Doorn, 2015).
According to Roy, Devlin and Sekhon, (2015) nowadays most of the organisation under
banking industry are facing issues regarding customer's engagement which is taking place due to
various reasons and affecting operational efficiency of the banks. Different types of financial
instruments such as mutual funds, shares, debentures are grabbing attention of the clients and
reducing their interest in the products that are offered by banks. It is resulting in decreased
profitability, employee turnover and reducing liquidity because when there are no customers then
it is not possible to perform operational activities. Rate of return on other securities is very high
as compare to services that are rendered by banks and customers always make investment in
such options that may generate higher returns for them. For HSBC it is very important to take
effective actions and form appropriate strategies so that the problem of lack of customer's
engagement can be resolved. If the banks are willing to overcome the challenges then all of them
have to make strategic decision and then form new and attractive policies that can help them to
deal with all the challenges that are taking place due to continuous reduction in client's
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engagement. When number of customers in banks get decreased then higher authority put
pressure on the employees to increase number of patronages. Few of them are able to work under
highly stressful situations but all of them are not capable for it, which results in employee
turnover. Lack of client's engagement is a major problem which results in other more issue and
affect the efficiency of organisations to conduct operational activities. In this condition the
higher authority should try to deal with the issues in effective manner by implementing such
strategies that are able to result positively.
According to Sajjad, Eweje and Tappin, (2015) there are various causes that are resulting
in decreased customer's engagement in banking sector. These are lower interest rates on bank's
products, taxation and higher rate of return on other financial instruments. Clients always choose
such securities to invest their money in which they can acquire higher rate of return. When they
have to select one from fixed, recurring deposits, saving accounts and mutual funds, shares,
debentures etc. In this situation they always go with second option because it provides them
higher returns on the investments and enhances their profits. It is essential for the organisation
that are operating business under banking sector to find out the causes and then form appropriate
strategies that can help to deal with them. The main step that can be taken by the managers of
HSBC is that it can offer customers a free PAN registration so that their tax can be saved and
customers get retained.
The ways in which the issue can be dealt and customer's involvement can be increased
For banks it is very important to increase involvement of customers so that all the issues
such as decreased profits, liquidity, number of customers and increased employee turnover etc.
There are various ways to resolve the problems and overcome the challenges that are taking
place due to this problematic situation. Various authors has suggested different types of ways
that can be adopted by banks in order to appropriately run business operations.
According to Khan, Rahman and Fatma, (2016), customer's engagement is very
important for all the banking sector organisation because if they do not have sufficient number of
clients then all of them won't be able to conduct operational and executional activities. Banks
should identify the basic requirements and the issues that are making changes in choices of
clients and then form appropriate strategies co that all of them can be resolved. Banks like HSBC
should conduct market survey and then find the best sources that can help increase engagement
of patronages which can contribute in the development of the organisation. Another way which
14

can be chosen by banks is direct interaction with clientele in which their issues and problems can
be examined and better modified services can be rendered to them. Timely feedback and
conversation is the key of finding solutions for the problems that are continuously affecting
profitability and position. Mapping is also a good technique which can be adopted while trying to
dealing with challenges. It helps to map out everything which is affecting the processes and
influencing the steps that are by banks to increase its revenues. When there is no connection
between bank and the clientele then it results in lack of their engagement. To achieve all the
business goals the organisations like HSBC are required to form impressive policies and deal that
attract customers and contribute in the betterment.
According to Karatepe and Aga, (2016) development in the customer's focused strategy is
an effective way to overcome the issue of decreased engagement of clients. By implementing
such type of schemes banking industry can fight with this problem. Currently involvement of
patronages is declining due to other impressive options and main reason behind it is rate of
return. On banking products it is very low as compare to financial assets such as mutual funds,
shares, debentures and bonds. To overcome this situation banks should conduct awareness
programs so that information regarding positive points of their services is supplied to the clients.
For example there is high risk involved in securities but there is no risk with banking products so
the agents of banks can communicate with the customers and make them engaged in banks. In
current era banking is becoming more democratised by technology and it is changing the
thoughts regarding services. Massive growth in digitalisation is also been recorded and it is a big
opportunity for banks to take advantage of it. Organisations that are not using technological
factors in its services, does not have highly satisfied clients. To achieve high level of customer's
engagement the banking companies are required to take advantage of new tech tools in order to
reach maximum number of individuals. Focus on experience of patronage is also very important
to increase their involvement and deal with problems such as reduction in profits and finance that
are taking place due to this issue. Banks should go beyond customer's service and make plans to
give them good experience because buyers can pay more if they are getting qualitative services
and better treatment.
According to Nysveen and Pedersen, (2014) customer's engagement is essential for
banking sector companies which begins before a new client even opens an account. If a bank is
not having satisfied patronages and their involvement is also not good then the step which can be
15

taken by it is improving the acquisition targeting. It looks at the usage, profitability and potential
of financial products that are sold to the clientele. Making changes in conversation method is
also a good solution for the problem of lack of customer's engagement in banks. Regular
interaction with them can help to maintain healthy relations in which they will be more
comfortable to share their issues that are reducing their involvement in banks. To build a
trustworthy relationship, the interaction must focus on making sure that customer believes, the
banks is genuinely interested in knowing them and resolving their issues. Banks should stay
consistent across all touch points so that targeted clients can be convinced to buy the financial
products such as CASA, fixed and recurring deposits. It is also very important to stay agonistic
in finance and banking sector because if banks like HSBC are not competitive then their market
share can be captured by other organisations. In this situation the enterprise can retain its
patronages if they are brand loyal and engaged with the organisation. Conducting financial
literacy program is also a way to enhance customer's engagement in banking sector. When they
are educated about the concept of risk and return then they will be capable to take appropriate
decision to investment their money in different sources. Individuals always try to invest their
money in such financial instruments which can provide them good returns. If banks are willing to
increase their profits then they have to communicate with their clientele and aware them about
the benefits such as compound interest rate and no risk of banking products.
According to McColl-Kennedy, Cheung and Ferrier, (2015) banks like HSBC are
required to aware their customers about the services and their benefits so that they can be
engaged and solution for organisational problems can be figured out. Uses of latest technology is
also an attractive way to enhance clients involvement because it helps to grab their attention and
increase their interest in buying products that are offered by bank. Offering them new and
modified services can also help to win their trust and provide them better experience which is
very important to increase revenues and profitability.
4. RESEARCH METHODOLOGY
Research methodology is a procedure which is used to analyse, assess, select and process
information or data which is collected by a researcher in order to conduct a research. It allows
the observers to critically evaluate the validity and reliability of a particular investigation. While
formulating business decisions it is also used to collect appropriate content that may guide to
form effective strategies for the betterment of the organisation. It includes interviews, publication
16

research, surveys etc. The researcher has conducted a research in which a major issue is going to
be analysed. The topic is continuous decrement in customer's engagement in banking industry.
For this purpose the researcher is required to identify the suitable techniques and methodologies
that can be used in the whole research. It is very important to conduct it in an appropriate manner
so that the readers get exact and accurate information for which they are looking. In opposite
situation it can lead towards misconceptions regarding the topic. In this report effective and best
suitable methods for research are used in order to provide better understanding of the issue which
is lack of client's engagement in banking sector. Different types of investigations, research
designs, philosophies, methods of data collection etc. have been described by the researcher. It is
very important to follow the appropriate guidelines while conducting an investigation because it
is required to complete it successfully.
Type of investigation: There are various types of investigations that could be used by the
researcher in order to gather accurate information and conduct a research. Before adopting the
methods and techniques for research it is essential to identify the nature of work so that best
suitable option can be selected for the investigation. There are two different types of it both of
them described below:
Qualitative: It is primarily exploratory research which is used to gain understanding of
underlying reasons, opinions and motivations. Insight in to the problems can be ached with the
help of this type of investigation. It facilitates to develop ideas and hypothesis which is beneficial
for potential qualitative research. This method is adopted for the purpose of deep analysis of a
particular issue or topic. It is the best technique if field of study deals with human perceptions
and their feelings. Looking in depth at non numerical data is the main function of this approach.
There are various sources that can be used to collect information. These are archival records,
observation of participant, interviews, artifacts and focus groups. It is a scientific method which
is advantageous when researcher is looking for non numerical data.
Quantitative: It is a systematic empirical investigation which is used for research when
researcher is willing to ad statistical data in the whole project. It is based on mathematical or
computational techniques. This technique is used to measure heights, age, distance or other
numerical data. In this method only numeric results can be gathered because the input for this
approach is statistical. Experiments and clinical trials are the examples of quantitative strategy.
Information in this technique is usually gathered by using structured research instruments. All
17

the outcomes that are received in quantitative approach are based on larger sample sizes. It
provides high reliability which is capable to render the accurate data to the observer.
From both the above described methods the qualitative method is going to be used by the
researcher for analysing decreasing customer's engagement in banking sector. The reason behind
the selection is that it helps to discover new thoughts and views. This technique guides to
understand the perception of different people who have discovered various aspects regarding the
issue. It will help the researcher to study the problematic situation in depth and use it to enhance
knowledge.
Research design: It refers to the strategy which is chosen by a researcher in order to
integrate different elements of the study in a logical and coherent manner. It ensures that all the
research problems have been addressed effectively and a proper way. Research design is also
considered as a blue print of an investigation which is required to measure, collect and analyse
the data. This study is mainly based on the assessment of decreasing customer's engagement in
banking sector and the research designs that can be used by the researcher to complete it are
described below:
Descriptive: Such type of research design is used to define features of a phenomenon or
population being studied. It is based on observation which is the most effective way to analyse
specific issues that are affecting banks such as HSBC in UK. It is not possible for the researcher
to make appropriate predictions with the help of this method because is a theoretical method
which cannot estimate figures that are related to future.
Exploratory: It is a type of research which is conducted mainly for a specific problem
which has not been studied. Such methods help to determine the best research designs, data
collection methods and sampling. The main function of this research is to understand the study in
a preliminary way. Goal of this approach is to discover the ideas and insights that can help to
overcome critical situations.
Experimental: It is a scientific research design which strictly based on new experiments.
Different types of hypothesis are formulated under this method that are used by researcher in
whole study. Controlled environment is the main requirement to complete such type of study.
One or more variable are manipulated by the researcher under this technique and then control or
measure the changes in other variables. There is a major disadvantage of this method which is
that it can produce artificial results that can be applied on one situation only.
18

From all the above described research designs descriptive method is used by the
researcher for present research because it helps in qualitative investigation by providing detailed
information regarding the issue or the research topic. It will guide the researcher to analyse
detailed information regarding the problems that are taking place in banking sector and affecting
banks like HSBC.
Research philosophy: It is a type of belief about the way in which data should be
selected by the researcher for the study. In research philosophy the topic is not discussed in
detail. There are two different types of philosophies that are described below:
Interpretivism: It is a form of qualitative research methodology. It relies upon both
trained investigator and the human susceptible as the tool which is used to monitor some
phenomena and typically pertain both observation and interrogation. It looks at the culturally
derived and historically placed interpretations.
Positivism: All the scientific quantitative methods are preferred by this philosophy. It
states certain knowledge which is based on earthy phenomena and its properties and associates.
In this approach society which relies specifically on scientific evidence are being studied.
From both the above described interpretivism philosophy is used by the researcher for the
study because it is supported by qualitative investigation. It will help the observers to analyse the
appropriate information and data which assessed while conducting the researcher while
formulating research. Literature review is also being supported by this method because it helps to
gather secondary data from books, journals and articles.
Research approach: It can be defined as a plan or process in which all the steps of broad
assumptions and detailed mode of data collection are included. The basis of research approach is
nature of research. It can be divided in to two sub parts that are described below:
Inductive: It is also known as inductive reasoning which starts with observation and
theories that are proposed towards the end of of the research. This is the best suitable approach
for qualitative investigation because it provides an effective and convenient manner to analyse
the collected information.
Deductive: It is based on the development of hypothesis for a quantitative investigation.
It works from the general to the specific. Sometimes it is also called top down approach because
it goes up from unspecific to a particular content.
19

In present study the researcher has used the inductive approach because suits to the
qualitative investigation which is selected for this research. It is advantageous as it helps to
generate a new theory which is based upon the data which is collected for the purpose of analysis
and complete the research.
Data collection: All the processes such as collecting, measuring, processing and
analysing the information can be defined as a part of data collection. It is a systematic approach
which is implemented by all the researcher as it is required to complete the research effectively
and appropriately. There are two different methods that are used to collect data from various
sources. Both of them are described below in detail:
Primary: Such information which is collected for the first time and used in a research is
called primary data. It is also known as first hand source of generating content for the purpose of
study. It is collected by investigator himself for specific purposes. The raw data which is used by
researchers to conduct a research in appropriate manner is known as primary data. There are
various sources that are used to collect such type of information. These are observation, personal
interview, questionnaire, telephonic interview, surveys etc. It helps observers to gather
appropriate and accurate information so that they can enhance their knowledge and get that
content they are looking for. For present study questionnaires are used by researcher to gather
primary information for the research.
Secondary: It is the information which has already been collected by someone else for
their research. It is mainly used for the part of literature review in which views of different
authors are considered by the researcher in order to answer the research questions. There are
various methods of using secondary content for the research. It is gathered from academic
journals, articles, websites etc. Already collected information is used in this method so that
detailed information regarding the research topic can be gathered. It is cheaper technique of data
collection where the researcher does not required to spend monetary resources but sometimes
researcher have to spend money for it if paid sources are used.
Both the methods are used this research. For primary sources questionnaires are
formulated in which the researcher has interacted with different people in order to analyse their
point of views regarding the problem. Secondary sources have also been used to complete the
literature review part in which answers of research questions are being provided.
20

Data sampling: It is a statistical analysis technique which is used by researchers to select,
manipulate and assess representative subset of data points to identify patterns and trends in the
larger set of information being examined. While conducting a research which is based on
primary data the researcher select a sample size that is used to gather information to complete the
study. It indicates at the quantity of data and the way it is going to be used in the whole
investigation. When a research is based on fresh data and the researcher is using questionnaires
then it is required to select a sample so that appropriate results can be analysed. The present
report is based on both type of information, primary and secondary. To gather information the
researcher can use both the below described methods for sampling:
Probabilistic: Base of this type of sampling is theory of probability which is related to
involving chance variation. There are multiple possible outcomes in this type of model and all of
them have varying degree of certainty of the occurrence. All the actions under this approach are
based upon the idea that researcher or observer cannot be certain about future vents or results.
The sample size which is taken in this technique is based on estimation.
Non-probabilistic: In this type of sampling technique the samples are gathered in a
process which does not give all the individuals in the collection, equivalent opportunity of being
selected. It can be explained in a manner that for some examinations it is not executable to draw
a ergodic chance which is based on the sample of population.
From both the above described techniques non probabilistic is being selected by the
researcher for present study because it will help to collect primary data for the research. Random
sampling is going to be used under this approach in which 40 respondents have been selected to
fill questionnaire. These are the employees of HSBC bank who provided their response on the
issue of decreasing customer's engagement in banking sector and affecting large banks like
HSBC.
Ethical considerations: These are considered as the major components for completing
an research successfully and properly. The researcher is responsible to ensure the care of the
information which is collected from different respondents. The data which is being collected
should not be shared with other parties. For a study there are various considerations and the
researcher should distinguish between the right and wrong. For example, asking information by
offering money is not the correct way to gather it. Another thing which is also required to be
focused is regarding personal information which should not be asked from the people who are
21

going to fill the questionnaire. It is also very important to make sure that the research is
conducted according to the objectives. Further, the other elements that should be focused by
researcher is to ensure the personal interest of respondents does not get affected due to research.
The information which is used to complete the study should be authentic and also collected from
reliable sources. All the guidelines and principles that are mainly established for research are
required to be followed by the researcher in order to complete research in appropriate manner. At
last it is also needs to be focused that the research is conducted by considering all the ethical
considerations and norms. While completing present study the writer has followed the principles
and guidelines in order to make an appropriate research.
Reliability and Validity: It is very important for a researcher to make sure that the
research is reliable and validate. It can be assured by analysing that the results are dependable or
not. Another element which is also very beneficial for it is assessing that the study can help the
observers to enhance their knowledge regarding the issue or topic which is discussed under the
research. If the information is extracted from authentic sources then it can be assured by the
researcher that the study is reliable and can used by others for a long period in future to enhance
their knowledge. When the content in the research is relevant and reliable then its soundness can
be assured and it can be used by the students or individuals to enhance their knowledge.
Reliability and validity of present study is high because authentic sources are used by the
researcher in order to collect information.
Strengths of research: The present research is highly reliable because appropriate
sources whether it is primary or secondary are used for the study. All the results are authentic
because information which is used to get them is accurate and appropriate. All the ethical
considerations are being followed while conducting the research that strengthen the authenticity
of the study. This research is able to provide appropriate information regarding the negative
impacts that are taking place due to continuous decrement of customer's engagement in banking
sector. Readers can enhance their knowledge with the help of this research because appropriate
and relevant content is being is used to to complete it. As primary and secondary both type of
sources are being used to conduct the study so actual and appropriate information from
respondents is collected that helps to enhance accuracy of the study. Quantitative investigation
method is being used in this research and non numeric content is being used which is easy for
individuals who belongs to finance or any other field. As the relevancy is high that helps to
22

enhance its validity in which it can be used for a long period in future. Major strength of this
study is that it covers all the appropriate information which could be required by the observers to
enhance their knowledge regarding reason behind continuous decrement in the customers
engagement in banking sector.
5. DATA ANALYSIS AND FINDINGS
Data analysis is the process of collecting, cleansing, analysing, processing and
interpreting information which is collected by the researcher in order to complete the research in
appropriate manner. It guides the researcher to reach at the conclusion for the issue or the topic
which is selected for a particular study. It is the most important part of a whole research because
it helps to reach at a conclusion and result for the issue. All the objectives that are set earlier by
the researcher are being achieved in this section. It is conducted with the help of information
which is gathered from different sources. The researcher is required to make sure that the data
that is going to be analysed is authentic and accurate. If it is biased then it is not possible get
appropriate and faithful results. The process of in depth assessment of different information is
known as data analysis. Analytical and logical reasoning being used in the process in order to
examine each and every component of gathered data. Main purpose of this stage is to achieve all
the predetermined objectives.
Analysis of primary research
In present study the researcher is going to use primary as well as secondary data for the
purpose of analysis and reach to a result. For the purpose of getting primary information the
researcher has used questionnaires that are provided to 40 respondents and their answer is being
used to reach to a conclusion. Different types of 12 questions are being asked form employees of
HSBC bank in order to gather information regarding customer engagement in banking sector. In
secondary sources different types of books, journals and articles are being used to complete the
literature review part. All the gathered information is going to be discussed under this section.
The sample of 40 employees if HSBC is being selected to gather information which is required
for primary sources. The questions that are asked from the respondents are mainly based on the
objectives. When all the questionnaires are filled by them then graphical representation of them
is being created so that the information can be understood easily. The part of whole research
provides in depth assessment of the study. A questionnaire is being formed by the researcher in
23

which 12 different questions are recorded and it is provided to 40 people who are working in
HSBC as its staff members. The questionnaire which was given to them to fill their answer is as
follows:
QUESTIONNAIRE
Name:
Age:
Gender:
E mail:
Q1. Are you aware of the concept of customer's engagement in the context of banking
sector?
A. Yes
B. No
Q2. Do you think that customer's engagement is important for growth of banking sector?
A. Yes
B. No
Q3. Is decreasing customer engagement create huge influence on the overall operations of
HSBC?
A. Strongly agree
B. Agree
C. Disagree
D. Strongly disagree
Q4. What is the main reason of decreasing client's engagement in HSBC?
A. Lower interest rate
B. Competition
Q5. Which type of impacts left by the lack of customer's engagement on HSBC?
A. Positive
B. Negative
Q6. What is the potential aspect through which HSBC can generate more then average
revenues?
A. High customer's engagement
24

B. Skilled employees
Q7. Which major problem is taking place in banking sector due to lack of customer's
engagement?
A. Reduced profitability
B. Bad market image
Q8. What are the benefits of customer's engagement for HSBC?
A. Higher profits
B. Brand loyal customers
C. Great market image
D. All of the above
Q9. Is HSBC taking steps to deal with the issue of decreasing customer's engagement?
A. Yes
B. No
Q10. Is there a need for a formal customer's engagement programs in HSBC?
A. Yes
B. No
Q11. Is it prove beneficial for HSBC to make improvement in customer engagement?
A. Increase profitability
B. Control employee turnover
C. Raise funds
D. All of the above
Q12. What are the ways to enhance customer's engagement in banks?
A. Implementing customer focused strategy
B. Enhancing customer experience
C. Continuous interaction
D. All of the above
QUESTIONNAIRE
Q1. Are you aware of the concept of customer's engagement in the context of
banking sector?
Frequency
25

A. Yes 36
B. No 4
Q2. Do you think that customer's engagement is important for growth of
banking sector?
Frequency
A. Yes 33
B. No 7
Q3. Is decreasing customer engagement create huge influence on the overall
operations of HSBC?
Frequency
A. Strongly agree 15
B. Agree 16
C. Disagree 6
D. Strongly disagree 3
Q4. What is the main reason of decreasing client's engagement in HSBC? Frequency
A. Lower interest rate 32
B. Competition 8
Q5. Which type of impacts left by the lack of customer's engagement on
HSBC?
Frequency
A. Positive 1
B. Negative 39
Q6. What is the potential aspect through which HSBC can generate more
then average revenues?
Frequency
A. High customer's engagement 28
B. Skilled employees 12
Q7. Which major problem is taking place in banking sector due to lack of
customer's engagement?
Frequency
A. Reduced profitability 25
26

B. Bad market image 15
Q8. What are the benefits of customer's engagement for HSBC? Frequency
A. Higher profits 4
B. Brand loyal customers 3
C. Great market image 2
D. All of the above 31
Q9. Is HSBC taking steps to deal with the issue of decreasing customer's
engagement?
Frequency
A. Yes 35
B. No 5
Q10. Is there a need for a formal customer's engagement programs in HSBC? Frequency
A. Yes 30
B. No 10
Q11. Is it prove beneficial for HSBC to make improvement in customer
engagement?
Frequency
A. Increase profitability 4
B. Control employee turnover 4
C. Raise funds 3
D. All of the above 29
Q12. What are the ways to enhance customer's engagement in banks? Frequency
A. Implementing customer focused strategy 5
B. Enhancing customer experience 3
C. Continuous interaction 4
D. All of the above 28
27

Q1. Are you aware of the concept of customer's engagement in the context of
banking sector?
Frequency
A. Yes 36
B. No 4
Interpretation: From the above pie chart it has been analysed that 36 out of 40
employees of HSBC are aware of the concept of customer's engagement in banking sector. 4
respondents are not aware of this concept. For all of them it is very important to have
information regarding it so that they can help to formulate appropriate strategy for the betterment
of the bank. It is vital for large banking sector organisations like HSBC to analyse that customer
engagement in banks is high or not as it is required to execute business activities in appropriate
manner. Top management of the bank is required to conduct training programs for employees so
that all of them get aware of customer engagement and try to enhance it by performing all their
jobs in appropriate manner.
Q2. Do you think that customer's engagement is important for growth of
banking sector?
Frequency
A. Yes 33
B. No 7
28
36
4
A. Yes
B. No

Interpretation: The above chart reflects that 33 out of 40 respondents thinks that
customer's engagement is important for the growth of banking sector. 7 out of them does not
think that it is essential for banking industry and the organisations that are operating business
under this sector. They are not agree that client's engagement can help banks like HSBC to
achieve growth and development. As 7 employees of HSBC does not think that customer
engagement is not important so it is vital for managers to enhance their information regarding it
so that they may try to accomplish all their goals successfully.
Q3. Is decreasing customer engagement create huge influence on the overall
operations of HSBC?
Frequency
A. Strongly agree 15
B. Agree 16
C. Disagree 6
D. Strongly disagree 3
29
A. Yes B. No
0
5
10
15
20
25
30
35 33
7
Frequency

Interpretation: The above chart reflects that 15 respondents are strongly agree that
decreasing customer's engagement has huge influence on overall operations of HSBC. 16 of
them are agree with this statement, 6 are disagree and 3 respondents are strongly disagree with
this statement. According to them if the organisation does not have customer's engagement then
it will affect the operations and its efficiency. As customer engagement is continuously
decreasing banking sector that leaves negative impact upon overall operations of HSBC as it
results in reduced profitability and market image. If the organisation does not have engaged
customers then it is not possible to execute business operations in effective manner due to lack of
customers and involvement in operational activities.
Q4. What is the main reason of decreasing client's engagement in HSBC? Frequency
A. Lower interest rate 32
B. Competition 8
30
15
16
63
A. Strongly agree
B. Agree
C. Disagree
D. Strongly
disagree

Interpretation: HSBC is dealing with the issue of decreasing customer's engagement. 32
out of 40 respondents are saying that lower interest rate is the reason and rest of them are saying
increasing competition is the reason. 8 employees are not agree with others because they think
that currently competition is increasing within banking sector which is creating this issue. There
are various types of reasons that are resulting in decreased customer engagement and it is vital
for the managers to identify them and then form strategic decisions so that it can be enhanced.
From the above chart it can be observed that lower interest rate is the main reason for it. The
managers are required to communicate with clients and then provide them information regarding
benefits of the banking products such as fixed deposit, recurring deposits, current and saving
accounts.
Q5. Which type of impacts left by the lack of customer's engagement on
HSBC?
Frequency
A. Positive 1
B. Negative 39
Interpretation: The above chart reflects that according to 39 respondents from 40 are
saying that lack of customer's engagement will leave negative impact on HSBC. 1 of them has
said that it is leaving positive impacts on banks. It is very important for managers of HSBC to
provide appropriate information of significance of customer's engagement to the employees as it
31
A. Lower interest rate B. Competition
0
5
10
15
20
25
30
35 32
8
Frequency

is required to execute business operations in appropriate manner. Lack of client's engagement
always leave negative impact on organisations and its ability to execute all the operations in
effective manner.
Q6. What is the potential aspect through which HSBC can generate more
then average revenues?
Frequency
A. High customer's engagement 28
B. Skilled employees 12
Interpretation: In bank industry, both customers and employees play major role in
generating high amount of profitability. In this regard, employees give their support and high
contribution in providing best customer services. They resolve every queries of customers and
through effective communication, ensure people that bank will keep their money transaction in
safe and secure mode. Similarly through customer engagement, bank gain opportunity to
generate high profitability and a high competitive advantage as well. As per survey on 40
respondents, it has been interpreted that for generating more than average revenues, 28 users are
32
Frequency
0
5
10
15
20
25
30 28
12 A. High
customer...
1
39
A. Positive
B. Negative

advised HSBC to concern towards increasing customer engagement. This would help in
enhancing customer base and gain their retention for longer period, because fully-engaged
customers result to increase 23% more revenue than average. While, other 12 respondents
suggest HSBC to give preference for introducing and retaining high skilled workforce force. As
talented workers give support in bringing new ideas to develop attractive scheme for improving
customer engagement. Therefore, focusing on introducing talented workforce will provide more
benefits to resolve issues related to engaging customers for longer period.
Q7. Which major problem is taking place in banking sector due to lack of
customer's engagement?
Frequency
A. Reduced profitability 25
B. Bad market image 15
33

Interpretation: Customer engagement can be considered as an emotional connection
between a brand and its loyal consumers. Highly engaged clients lead to increase brand image
and promote business of a company as well as demonstrate more loyalty. Therefore, decreasing
customer engagement has become a major issue for HSBC that impact on revenue and brand
reputation more negatively. According to above figure, it has been interpreted from perception of
25 respondents out of 40 that, due to the mentioned issue profitability of HSBC is decreasing
more rapidly. This would to arise various issues like funds or checks bouncing, mortgage/ loan
issues, fail to honour promises and more. All these problems lead to create difficulties in getting
retention of existing customers also. Other than this, remaining 15 respondents state that
reducing rate of customer engagement will impact on reputation of banks and put negatively on
its brand image as well. Therefore, it is essential for this bank to take appropriate actions for
resolving issue.
Q8. What are the benefits of customer's engagement for HSBC? Frequency
A. Higher profits 4
B. Brand loyal customers 3
C. Great market image 2
D. All of the above 31
34
25
15
A. Reduced profitability
B. Bad market image

Interpretation: Customer engagement is important for every working whether working
in hospitality, retail or banking industry. This would help in increasing revenue and generating
more profitability than average. When a company get success to engage more customers towards
its services and for longer period, then this aid to build high reputation at marketplace. It has
interpreted from above graphical representation of data that out of 40 respondents, 4 are in
favour with higher profit. They are agreed that fully-engaged customers give opportunity to
bankers like HSBC in generating high revenues and gaining more profitability. While, 3 users
state that increasing customer engagement will aid respective bank in branding loyal customers
more. This would give support to organisation in building strong image of brand and attracting
more customers towards business. Other than this, 2 users state that great market image is better
advantage part of customer engagement, which would help in getting sustainability in
competitive era. Furthermore, the major portion of respondents that are near about 31 out of 40,
are in favour with all advantageous. They have believed that engaging clients will help HSBC in
getting an edge over its competitors and resolving entire issues, related to earn profitability.
Q9. Is HSBC taking steps to deal with the issue of decreasing customer's
engagement?
Frequency
35
A. Higher profits
B. Brand loyal customers
C. Great market image
D. All of the above
0
5
10
15
20
25
30
35
4 3 2
31
Frequency

A. Yes 35
B. No 5
Interpretation: Due to decreasing customer engagement, HSBC and other banks face
various problems like failure to honour promises, mortgage or loan issues, bouncing of funds and
more. Therefore, leaders of HSBC take various plans to overcome from such a problem.
According to feedback of 35 respondents out of 40, it has been interpreted that they are also
agreed with same statement. They have believed that respective bank has made much
improvement in its services and financial schemes. While 10 remaining users didn't give same
perception.
Q10. Is there a need for a formal customer's engagement programs in HSBC? Frequency
A. Yes 30
B. No 10
Interpretation: As major issues like increasing labour turnover, decreasing brand image
and more, occurred in HSBC is due to decreasing customer engagement. Therefore, it is essential
to respective organisation to develop effective plans for resolving the same. In this regard, to
analyse whether it is beneficial for company to run formal customer engagement programs or
not, its managers have surveyed on 40 respondents, as shown in above figure. Through this data,
it has been interpreted that 30 users out of them are agreed with the same. While, remaining 10
36
35
5
A. Yes
B. No

respondents didn't agree with it. They suggested to use other methods like increasing customer
journey experience, will provide more benefits.
Q11. Is it prove beneficial for HSBC to make improvement in customer
engagement?
Frequency
A. Increase profitability 4
B. Control employee turnover 4
C. Raise funds 3
D. All of the above 29
Interpretation: Customer engagement is important for all business organisations in
getting profitability and high revenues. In context with banking sector, without getting
involvement of customers, companies cannot improve its services and gain benefits. It includes
raising funds, money lending, reducing employee turnover and more. According to views of 4
respondents out of 40, it has been interpreted that they are much favoured in controlling
employee turnover. Because when HSBC gain fully-engaged customers then it will help in
generating more revenue. Through this process, respective company can provide more incentives
and increase pay scale of employees, which would help in retaining them for longer period.
While 3 users give support to raise funds and other 4 towards increase profitability. Other than
37
A. Yes B. No
0
5
10
15
20
25
30
30
10
Frequency

this, remaining 29 respondents states that customer engagement provide entire benefits to HSBC
by which it can run its business more appropriately.
Q12. What are the ways to enhance customer's engagement in banks? Frequency
A. Implementing customer focused strategy 5
B. Enhancing customer experience 3
C. Continuous interaction 4
D. All of the above 28
Interpretation: As improving and enhancing customer engagement process has become
the most crucial activity for banking industry, in order to generate high revenues. Therefore, in
this regard, HSBC which is one of the leading bank needs to implement various effective ways.
It includes building customer-centric strategies, enhancing customer experience, developing
continuous interaction and more. According to views of 5 respondents out of 40 as shown in
above figure, it has been interpreted that implementing customer focused strategy will help
HSBC in overcoming from issues related to decreasing customer engagement. Through this
process, respective bank get advantage to deliver offerings as per expectation of its consumers
which would reduce personalised gap as well. While, other 3 users state that enhancing customer
experience journey will prove more beneficial for resolving the current issues faced by HSBC.
Other than this, remaining 4 respondents are in favour with continuous interaction, which would
38
4
4
3
29
A. Increase profitability
B. Control employee
turnover
C. Raise funds
D. All of the above

help in creating transparency in business and engaging customers more. While major portion of
respondents that are near about 28, are emphasised on overall concepts. As implementing all
such concepts aid HSBC in not only resolving issues related to decreasing customer experience,
but also help in getting an edge over its competitors, in high profitable manner.
Analysis of secondary research
As per the literature review it has been analysed that customer engagement is the process
of retaining clients by satisfying them with the help of services that are rendered by the banking
sector organisation. When patronages are satisfy with the products that are bought by them for
banks then it helps to enhance their involvement in banking activities. Organisation can attract
large number of clients or increase customer traffic at bank by fulfilling their financial goals and
offering them good returns on investments that are made by them. In order to execute business
operations effectively it is vital to retain clientele so that higher profits can be acquired in a
specific time period (Customer engagement. 2018). Forming customer focused strategies is the
best way to involve clients in banking and attract them to buy products such as fixed deposits,
saving accounts and recurring deposits. If managers of banks continuously interacting with
clients then it may also help to resolve all their queries and issues.
There are various benefits of high customer engagement because it helps to establish a
good market image, enhance profits and operational efficiency of banks. In banking sector it is
39
Frequency
0
5
10
15
20
25
30
5
3 4
28
A. Implementing customer
focused strategy
B. Enhancing customer
experience
C. Continuous interaction
D. All of the above

vital for organisations to focus on it so that all the business activities can be executed in
appropriate manner. The major benefit of it is that it may help to attain higher profits as compare
to average. If a bank is having high customer engagement then it helps to increase customer
support and mouth publicity (How to overcome customer experience challenges in the Banking
Industry, 2019). It is very difficult to satisfy customers and retain them in banking sector because
services are rendered to them that cannot be replaced if clients are having some issues with them
but if this difficulty is dealt by the company appropriately then it may provide various benefits.
These are higher market share, enhanced profits, good market image. Business can be executed
effectively and appropriately if an organisation is having higher customer engagement.
In Banking sector customer engagement is continuously decreasing which leave negative
impact on the business of banks. If a bank does not have engaged clients then it is not possible to
operate executional activities and acquire desired profits. There are various negative impacts of
reduced customer engagement. These are decreased profitability, lower market share, reduction
in the number of patronages and improper business operations. It very important for higher
authority of banks to form strategic decisions that may help to reduce the impacts and increase
engagement of clients in banking sector (DiStaso, 2014).
There are various types of factors that are resulting in decreased customers engagement
and managers of banks are required to the causes of it. These reasons are improper tax system,
lower interest rate, competition, unsatisfied clients etc. It is vital for the managers to find ways in
which all of them can be dealt effectively. Banks charge excess amount of tax on saving
accounts if a client is not having pan card. The interest rate which is offered by banking sector
organisations is low as compare to other financial instruments such as mutual funds, shares,
bonds, debentures etc. All of them are offering higher rate on interest to the clients and it results
in decreased involvement of clients in banks. It is very important for managers and top
executives to take all the reasons in to consideration and then formulate customer focused
strategy so that their engagement can be enhanced (Siddiqi, 2015).
There are various ways that can be adopted by banking sector companies to enhance
customers engagement and deal with the issue of decreased involvement of clients in banking.
One of them is formulating customer focused strategies and it is the most effective way to
resolve the problem which is affecting organisations. If banks are forming these policies then it
can help to gain their trust, resolve their queries, enhance their satisfaction level etc. In order to
40

execute business effectively it is vital for banking sector companies to find ways in which
problematic situation of decreased client engagement can be resolved (Ways to improve customer
engagement, 2018). If it is not possible for them to analyse such ways then it is not possible to
deal with this issue which is resulting in other problems like high losses, low customer retention
rate etc.
6. CONCLUSIONS AND RECOMMENDATIONS
As the above research it has been concluded that customer engagement can be defined as
the process of communication in which organisations try to engage clients in its activities.
Interaction is the main aspect that may help to enhance it. It is vital for all the sectors to make
strategic decision that can help to attract large number of customers and increase their traffic. If a
company is not able to retain the client then it is not possible to execute business activities
effectively. Now a days organisations that are operating under banking sector are facing a
specific issue which is lack of customer's engagement which is affecting their efficiency to
perform business activities, profitability, productivity and other aspects. It is vital for banks to
retain clients so that higher profits can be generated by fulfilling all their requirements. There are
various reasons that are resulting in this problematic situation. These are lower interest rate, lack
of communication, competition, dissatisfaction etc. For all the banks it is essential to identify
them and then try to find solutions for the problems. Currently people are attracting towards
other financial instruments such as mutual funds, shares, debentures and binds due to higher rate
of return. In banks rate of interest is very low as compare to other securities this is the main
reason why clients are switching from banks to other financial institutions. In order to engage
them in the banking activities managers of organisations are required to communicate them on
regular basis so that they may share their issues and problems with them. Banks also charge TDS
on saving accounts if the interest is more than 10000 and if the account holder is not having pan
card then banks doubles the rate of tax. As banking business runs on relation ship so the
managers should try to build good relations with patronages and then provide them information
of benefits of services that are rendered by banks. One of the main benefit of banking products is
that it has no risk and compound interest is provided on fixed, recurring deposits saving
accounts. The employees of the organisation can communicate with clientele regarding benefits
and then try to enhance their engagement in the banking activities.
41

Customers are also considered as brand ambassadors of the company because if they are
highly satisfied with the services then they refer them to others which is also known as mouth
publicity. In order to satisfy clients banks are required to form new policies that are formulated
by taking patronages preferences in to consideration. Customers focused strategies can help to
overcome the problem of lack of clients engagement. In order to attract large number of
individuals towards services of banks, managers are required to analyse the issues that are
resulting in this problematic situation and then try to resolve all the issues of clients. It is very
important to enhance satisfaction level of them. Development of customer focused strategies is a
way that can help to overcome this problem. Sometimes clients does not get satisfied with the
banking products that are bought by them for the bank and then they starts to look for other
options that best suits to their goals. If clients feel that the organisation is helping them to attain
their financial goals then it may help to win their trust.
Recommendations
From the overall research, it has been summarised that customer engagement refers to a
way by which companies foster their relationship with its loyal clients and prospects. By
encouraging customers to make interaction with organisation and give their feedback for
increasing brand experience, a company can drive more loyalty and awareness. In this regard, for
banking sectors, properly engagement of clients aid in improving relationship of business with
customers. This would also consider as a great way for differentiating a brand of a company
from others. In context with HSBC, as it is one of the largest bank of UK that operates its various
branches in many countries. But due to private financial institutions which provide impressive
financial schemes at marketplace to attract customers for making investment, within their
business. This would arise difficulties for banks including HSBC to increase customer
engagement. Due to this issue, respective bank also face issues to cover return on investment and
generate revenues. In this regard, to improve customer engagement, it is recommended to HSBC
to concern on following four main ways:-
Personalised customer journey: Customers are generally demanding to get better
experience which are relevant and more personalised. This would lead to create a high
personalised gap between what users are demanding and what bank deliver them. Therefore, to
decrease this gap, it is essential for HSBC to work on its personalised strategy first. This would
help in retaining customers and creating repeat sales as well. Since due to intense competition
42

and available of various options where, people get more benefits from their investment, increase
chance of consumer defection (How to overcome customer experience challenges in the Banking
Industry, 2019). Therefore, leaders of respective bank need to concern on building more effective
strategies which focus more on increasing customer experience journey. Along with this, while
developing such strategies, they have to emphasis more on leveraging data, digital technologies,
real-time analytics and more, for delivering highly personalised schemes to improve customer
engagement.
Develop more interaction with customers: In order to remove personalised gap and
delivering better offerings, it is essential for HSBC to interact more to its customers. For this
purpose, by taking timely surveys and interviews, its managers can take reviews and feedback of
users for increasing experience of customer journey while taking banking services. In this regard,
keeping transparency in business and provide equal opportunity to employees to work, also give
opportunity to HSBC to build its ethical brand image at marketplace. It also helps in bringing
and retaining talented employees within workplace. They would give their support in getting
fully-engaged customers by resolving queries of clients within short period of interval.
Innovative Technology: As banking sectors are constantly innovating their techniques
and plans to improve efficiency of work as well as minimise operational overheads. Therefore,
to innovate customer experience HSBC need to deliver high communications, which must be
powerful enough for self-servicing a customer. Hereby, a future-proof related to customer
communication strategy give chance to HSBC to leverage a new channel, for increasing its sales
i.e. cross sell and up-sell opportunities by existing communications. Along with this, customer
on-boarding that was considered as one of the major hassle in giving out an impeccable
customer experience, will now be done within lesser time via a robust CCM software.
Develop more financial schemes: Due to increasing private financial institutions that
offer investment plan on more interest, people get attract more towards them. They used to get
engaged with their plans such as shares, debentures, mutual funds, bonds and more, in order to
gain heavy return on investment. Therefore, this would lead to arise issues for HSBC and other
banking sectors to gain retention of their customers. To overcome this issue, respective
organisation must develop effective plans to users and increase interest rate. Its managers must
concern on finding the right metrics for this purpose, by increasing offerings related to number of
specific account type such as savings and checking, lending, retirement or investment plan and
43

more. These initiatives help in improving customer engagement and retain them for longer
period.
Real-time information: Improving and increasing customer experience is considered as
one of the most important goals for companies dealing in banking industry. Therefore, HSBC
must have revived its outmoded business model as well as shifted its focus towards being
customer-centric. This would help in developing transparency among business by making proper
interaction with users on regular manner, to take their feedbacks related to banking experience.
Hereby, due to some legal implications, operating regulations and other legislations, it may
create difficulties for HSBC to provide distinguished experience. Henceforth, under such a
condition, real-time information will act as a saviour. In this regard, while interacting with a
responsive document and a self-serviceable, customer get chance to input certain feedback and
service requests to bank. Such informations can be further recorded in real-time then
implemented through various channels for future communications across as well. In this regard,
information which is gathered via different digital channels can be leveraged and analysed to
deliver effective outcomes. This would enable leaders of HSBC to harness customer information
as well as proactively deliver experiences on-time.
44

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