Globalization Effectiveness on Banking Performance: HSBC Bank Study

This dissertation investigates the effectiveness of globalization in enhancing banking performance and its contribution to economic growth, using HSBC Bank in London, UK, as a case study. It aims to understand the role of globalization in banking, explore factors affecting HSBC's growth, identify the relationship between globalization and economic growth, and determine how HSBC can improve its financial performance globally. The research employs a comprehensive literature review, covering the impact of globalization on banking, factors influencing HSBC's growth, and the relationship between globalization and economic growth. The methodology includes a discussion of research philosophy, approach, strategy, choices, time horizons, data collection, and analysis methods, while also considering ethical implications. The study concludes with recommendations for HSBC to enhance its financial performance and a summary of the key findings, highlighting the importance of globalization in the banking sector.

Dissertation
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Contents
INTRODUCTION...........................................................................................................................1
Background of Research.............................................................................................................1
Research Aim..............................................................................................................................1
Research Objectives....................................................................................................................1
Research Questions.....................................................................................................................2
Rationale of Research.................................................................................................................2
LITERATURE REVIEW................................................................................................................3
Role of Globalisation in context to banking...............................................................................3
Factors affecting growth of HSBC Bank of United Kingdom....................................................4
Relationship between globalisation and economic growth.........................................................5
Ways through which HSBC Bank can improve their financial performance at global level.....5
RESEARCH METHODOLOGY.....................................................................................................7
Research Philosophy...................................................................................................................7
Research Approach.....................................................................................................................7
Research Strategy........................................................................................................................8
Research choices.........................................................................................................................8
Time horizons.............................................................................................................................9
Data collection............................................................................................................................9
Data analysis...............................................................................................................................9
Ethical consideration.................................................................................................................10
DATA ANALYSIS........................................................................................................................10
RECOMMENDATION.................................................................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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TITLE: Effectiveness of globalization in improving banking performance and their
contribution to economic growth.
INTRODUCTION
Background of Research
The globalisation is used to explain growing interdependence of economies and culture of
world. It permits an organisation to search the minimum cost ways to develop the products. This
enhance the global competition that drives the cost down and develops more choices for the
customers. The minimum cost helps the people in developed and developing countries olive in a
better manner on minimum money. This is an ability to communicate and move in an easy
manner with the other to conduct the business at global level. The bank globalisation changes
shock transmission across the international market by the internal capital market of the bank and
foreign subsidiaries (Abor, 2019). HSBC holding plc is British multinational financial services
and investment bank. This bank has around 3900 offices in almost 65 countries and also
territories with 38 million customers. It is organised within the different business groups such as
Global private banking, commercial banking, retail banking and wealth management and the
global banking and markets. HSBC bank was imposed on balance sheet in all over the world
whereas it operating outside UK. HSBC is one of the biggest bank that has downgraded forecast
for economy of UK, predicting this to shrink through 10.3% in 2020 and grow 6% in year 2021.
Research Aim
The aim of present investigation is “To identify the effectiveness of globalization in
improving banking performance and their contribution to economic growth.” A study on HSBC
Bank, London UK.
Research Objectives
 To understand the role of Globalisation in context to banking.
 To explore the factors affecting growth of HSBC Bank of United Kingdom.
 To identify the relationship between globalisation and economic growth.
 To determine the ways through which HSBC Bank can improve their financial
performance at global level.
Research Questions
 What is the main role of Globalisation in context to banking?
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 What are the different factors affecting growth of HSBC Bank of United Kingdom?
 What is the relationship between globalisation and economic growth?
 What are the different ways through which HSBC Bank can improve their financial
performance at global level?
Rationale of Research
The present investigation is related to identify the effectiveness of globalization in
improving banking performance and their contribution to economic growth. In the banking
industry, globalisation is necessary as this brings the new technology that helps in improving the
banking services. (Asongu, Koomson and Tchamyou, 2017). The current research is mainly
conducted in personal and professional context. In the personal context, this helps to learner to
enhance the understanding about the globalisation in context to improving the baking
performance level in detailed manner. It is also conducted in professional context as this helps in
enhancing the skills and capabilities of a learner to do the investigation. It assists an investigator
conduct the similar kind of an investigation in the future and getting the positive outcomes.
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LITERATURE REVIEW
Literature review is explained as an account of what has been effectively published on
particular topic through accredited researchers and scholars. The main purpose of literature
review is to convey reader what the ideas and knowledge has been established on topic. The
literature review is based on the research objectives in which information collected by using
secondary sources such as books, journals, articles, internet sources and others (Sissy, Amidu
and Abor, 2017).
Role of Globalisation in context to banking
According to opinion of Kosmas Njanike (2021) Globalisation enable the large size
organisations to realise the economies of scale that minimized cost that turn the support of
economic development. It is process about enhanced interconnectness between different
countries. In the banking, globalisation is necessary as this brings the new technology that helps
in improve the banking services as well as infrastructure to minimize the fraudulent activities,
enhanced confidence and new risk management related techniques in banking sector. The
economic globalisation has been contributed to substantial rise in the living standards and also
falling the poverty over half century. Globalisation is worldwide drive towards globalised
economic system and dominated through the supranational business trade that are not effectively
accountable to democratic processes. The globalisation can be regarded as evolution that
restructuring the interactive means between different nations by breaking down the barriers is
communication (Auer, Borio and Filardo, 2017). In regards to this, globalisation of the financial
markets is process of unprecedented scale that has main consequences on the financial banking
management. The banks were among institutions mainly affected through the financial
globalisation. To deal with the changes in economic environment in specific financial
liberalisation and also the new technologies, banks forced to adopt the new strategies in the
banking management. Deregulation and enhancing sophistication regarding financial services,
products and the processes have enhanced complexity and diversity regarding financial risks.
Changes in the banking and financial markets have resulted in the changes in risk profile of the
firms and financial institutions. Main role of all these altercations in the financial stability and
economic development has made financial risk management more necessary. More competition
as result of baking globalisation has been led to enhance risk dimensions.
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Factors affecting growth of HSBC Bank of United Kingdom
As per opinion of Kyriaki Kosmidou and Fotios Pasiouras (2021) Banking sector acts as
provider of main part of the finance for commerce and trade. In this, banking has been more
informative intensive activity but in this present time banks are mainly differentiating the
services and products for better sustainability and development. The banking remains among
several domains that can own consumer for the life and also fulfil the aspiration and needs of
person. Banks can play better role than mere money keepers. They can provide suite of the
services to match life stage and lifestyle needs of people. HSBC is large size international
company and it operated in the different countries with the different policies, laws and
regulations (Ball, Junemann and Santori, 2017). Abiding through these laws mainly protects and
also enable the HSBC bank to operate in successful manner. HSBC have the protection strategies
against governmental limitations and restrictions. There are some factors given below which
impact on the HSBC bank:
Political factor- It plays an important role in identifying factors which can impact on long
term profitability of HSBC bank in certain market. This bank is operating in the banks in many
countries and also expose to various countries political environment. HSBC bank follow all the
rules and regulations while conducting its business operations. Abiding through laws protects
and enable it to be operate in successful way (Blundell-Wignall, Atkinson and Roulet, 2018).
Technological factor- In this, technological advancement impact way HSBC bank operate
on daily basis and how company shares its important information. HSBC bank is performing at
global level using advanced technology that can vulnerable to the cyber-attacks. It come under
the dire with some other financial institutions on how to protect the data of customers. Other than
this, HSBC provided the structured finance for the minimum carbon emission bus system in the
different cities in order to making the market leader in the climate technology financing (Borio,
2019).
Legal factors- In some of the countries, legal institutions are not the robust more in order
to protect intellectual property rights of company. It is necessary that company should examine
before entering the markets as this can lead to the theft of secret of company thus overall
competitive edge. There are many rules and regulations which linked to the HSBC banks. Major
complexity arises that they at minute face are the PPI claims they mainly mis- sold more
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payment protection insurances without not knowing of consumer. It is causing them the bad
publicity and also leading the consumers to be walk out (Bond, 2016).
Relationship between globalisation and economic growth
On the basis of Justin Kuepper (2020) it has been stated that globalisation aim to benefit
the individual economies around world through making the market efficient, limiting the military
conflicts and enhancing competition level. It has been stated that globalisation mainly promotes
the economic development. The globalisation is helpful in promote the economic development
and enhanced the trading among different nations. Main objective of globalisation is to give the
company as superior competitive positions with minimum operating costs in order to gain the
more number of services and products. Social and economic dimensions have developed the
positive impact on the growth. The positive impact of globalisation on economic growth is more
than impact on growth investment. The globalisation has main ley driver of the unprecedented
economic development. Enhancing potential of the government to gather the revenues an also
redistribute the resources (Bouma, Jeucken and Klinkers, 2017). On the other hand, globalisation
reduce the manufacturing cost. Average cost of the products is main aspect that mainly
contributes to enhance living standard. The banking system plays a necessary role in economic
world. The banks are collect saving of people and also lend them to business people. Mainly
banks plays an essential role in creation of the new capital in country and helps in growth
process. Globalisation and growth both considers the necessary aspect of the globalisation that
have the influence on the growth like the global financial flows and various kinds of the financial
investment.
Ways through which HSBC Bank can improve their financial performance at global level
Timothy J. Reimink (2020) stated that costing and profitability management requires to
main element of plan. The banks face new combination regarding circumstances that are
providing the special impetus to efficiency requirement. High competition, new technologies and
the changes in preferences of customers are mainly transforming banking nature. It is necessary
that HSBC bank can make improvement in its underpinning investment bank. Markets division
and global baking of HSBC mainly contains investment bank has underperforming commercial
as well as retail banking business. Other than this, there are different ways mention below
through which HSBC bank can improve the financial performance at global level:
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Business realignment- Basic premise of the business realignment is to mainly exit the
business line that have minimum margin and also move instead line which are cost effective and
enhance profitability bank. In regards to this, leading the banks take robust approach regarding
the strategic planning and also assessing less commitment regarding resources required to
compete in specific business line and determining the opportunities to be differentiate themselves
for the rivals (De Haas, 2016).
Channel optimization- The main objective of the channel optimization is to mainly assess
different ways consumers interact with bank to develop cost effective combination that adapted
to particular customer base. Provided rapidly chafing nature regarding the customer channel
needs, this optimization process needs the branches to aggressively closed. In order to enhance
performance level, banks are reconfiguring the duties, roles and also staffing within branches. It
can be employing the new metrics for examining the value and performance level of banks
(Emter, Schmitz and Tirpák, 2019).
Automation and technology- Main role of the technology in banking has been mentioned
in many times. Use of the automation and technology merits attention of people as main part of
efficiency improvement effort. Overarching aim is threefold like to have the applicants that
permits to make the proper transaction without needing the efforts of staff members. It is
necessary to use the automated business decisions as well as rules to move work quickly by
processes.
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RESEARCH METHODOLOGY
The research methodology is particular technique that mainly used to determine, choose and
analyse the information topic. The main focus of research methodology is to gather data and
enhance the knowledge regarding particular subject area. Through using the effective
methodology, researcher can able to solve the practical issues by using scientific methods. The
research onion was developed through Saunders et. al in year 2007 in order to explain stages by
which an investigator should pass when developing the methodology (Eppinger and Potrafke,
2016). Research onion is mainly an intension of research methods tree. The different layers in
research onion mention below:
Research Philosophy
It is related to set the beliefs concerned nature of reality that is being investigated. This is
mainly investigated. Interpretivism and positivism are two different research philosophy. The
positivism research philosophy is mainly reflecting the philosophical stances regarding natural
researchers. In this, knowledge is mainly obtained through observations and findings the event
regularities. Interpretivism is an approach that is based on the assumptions that entities are
mainly discourse constituted.
Justification: There has been Interpretivism research philosophy used as this is related to
the qualitative research method. It is system that mainly confines itself to data experience. This
research philosophy is mainly consisting an investigator to interpret the components of study
(Forbes, Reinhardt and Wieladek, 2016).
Research Approach
It is defined as the plans and process for conducting an investigation. It spans wider
assumptions to the detailed data collection methods and analyse them effectively. Inductive and
deductive are two different approaches of an investigation. The inductive research approach is
set of the observations and more from specific to general proposition set. On the other hand,
deductive research approach is that people are related with the scientific research. It is when
hypothesis is being developed from existing theory. This research approach is one that people
associate with particular research (Kinsey and Newton, 2016)
Justification: In conducting the current investigation, there has been inductive research
approach used. This is an approach to an investigation that mainly begins with observation at end
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of an investigation. This research approach helps in gathering the relevant data and information
that helps in provide the authentic outcomes effectively (McCann, 2016).
Research Strategy
Research strategy refers to the overall plan for conducting the research study. The research
methods tell an investigator how to gather as well as analyse the data. It is general plan how an
investigator will be go (Koengkan, Poveda and Fuinhas, 2019). Strategy can consist number of
the various approaches for an instance case study research, experimental research, surveys,
systematic literature review etc.
Justification: In conducting the present investigation, systematic literature review has
been conducted. It provides the detailed explanation regarding the particular subject area.
Research choices
Qualitative and Quantitative are two different research choices. Quantitative research is the
process in which researchers examine the attitudes and behaviour of people which is based upon
the numerical evidences. It is use to know how someone understand and explain it in the manner
of socially relatable. It is in the statically form of data. There are many Quantitative research
methods which are helpful to discover different information from the users. These are A/B
testing, analytics, desirability studies, surveys and questionnaires and tee testing it is the
relatively cheap method. Other than this, Qualitative research is the gathering and analysing the
data which is in the non-numerical term such as text, video and audio. It is helpful to understand
the concept and opinion as well. It is used to gather the deep information about relative problem
and help to find out the new idea for research. It is quite opposite from the quantitative research
that is containing collecting and evaluating numerical data for statistical analysis. It is used to
know that how people actually experience the world. There are some qualitative research
methods such as observation, interviews, surveys, secondary research etc. It is considering as an
instrument is research because all analysis and observation are filtered by the personally by user.
Justification: There has been qualitative research method used as it helps in gain the
understanding regarding the underlying opinions and reasons. The qualitative research choice
helps in provide the detailed explanation regarding the particular area.
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Time horizons
It is related to completion of investigation within given time period. There are cross
sectional and longitudinal are two different time horizons. The longitudinal time horizon is kind
of the correlation investigation that consists looking at different variables over extended time
period. On the other hand, cross sectional time horizon provides the time frame to completion of
investigation within given time period (Mowforth and Munt, 2015).
Justification: In performing this research, cross- sectional time horizon has been used. In
this, study of various subjects of various activities are mainly compared at similar time.
Researcher measure outcome as well as exposure in study at similar time.
Data collection
Data collection is defining as the process of gathering, measuring, and examining the
quantitative and qualitative data on some specific topic. A good data collection needs to be clear,
relatable, concise reliable. The approaches of data collection are depending upon the
requirements and field of the study. It can be collected in the form of facts, figures, objects etc.
Different data collection Primary data collection are primary and secondary (Naqvi, Henow and
Chang, 2018). The primary method is related to when the data is first time collected by the
researcher and not used in the past is called the primary data. Primary data is collected by the
researcher for the specific motive and it has to be accurate. It can be divided into two parts which
are quantitative method and qualitative method. On the other hand, secondary method is related
to collecting the data from different sources such as books, articles, journals and others.
Justification: In this research, secondary method of data collection used. The main reason of
using this method is that it is time saving as well as cost saving. It is easy for an investigator to
gather the relevant information by using the different sources. Researcher assures about the
quality of different sources (Patunru, Pangestu and Basri, 2018)
Data analysis
It is related to process about cleaning, transforming and modelling the data to find out the
useful information for taking effective business decision. It is process regarding applying the
logical technique to explain as well as illustrate the data in an effective manner. An investigator
examines the observation patterns by whole data collection phrase. Purpose of the data analysis
is to search the meaning in data so that derived knowledge can be mainly used to make the
informed decisions.
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Justification: For analysis of data, there has been content analysis technique used. The
content analysis is mainly used to identify presence of the certain concepts or themes within the
qualitative data. Using the content analysis, an investigator can analyse presence. It is method for
summarizing any content form through counting the different aspects of content (Potrafke,
2015).
Ethical consideration
Conducting an investigation needs not only the diligence and expertise but integrity and
honesty also. It is done to the identify and protect human subject rights. To conduct an
investigation in an ethical manner, it is necessary to an investigator to follow all the ethical
principles such as confidentiality, self- determination, informed consent and others. It is
necessary to maintain the confidentiality and anonymity regarding the study. In regards to this,
these ethical principles are mainly designed to protect privacy of the human subjects while
collecting, examining and also reporting the data. The anonymity is related to gathering the data
without obtaining personal information and determining information (Ruza, de la Cuesta-
González and Paredes-Gazquez, 2019). It is necessary that researcher should not leak the
personal information of the respondents. Maintaining the confidentiality is main measure to
assure protection of the personal information. Regarding collection of data from different
sources, it is necessary to have the permission. It helps in getting the positive research outcomes
regarding the particular subject area.
DATA ANALYSIS
It is an important section of undertaking research as it helps in analysing all the collected
data with the aim of taking a valid decision. With the assistance of this chapter, researcher can
evaluate entire aspects that can impact over the end results. This will include various themes on
which data is evaluated. This can be beneficial in providing detailed analysis on the basis of
specified research topic and area as well. In order to carry out current study, investigator use
qualitative research in which information is collected by different sources to draw a valid
conclusion at the end of the investigation.
Theme 1: To understand the role of Globalisation in context to banking.
Globalisation is considering as an opportunity and challenge for banking sector to gain
strength in the domestic market and at the same time also enhance the presence in the global
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