Technological Innovation Issues and Strategic Response: HSBC Bank

This report delves into the technological innovation issues faced by HSBC Bank, examining its strategic IT responses to market challenges. It begins with an introduction to innovation and its importance in the global business environment, particularly in the banking sector. The report employs an inductive approach, utilizing secondary research methods to identify key issues and challenges related to technology adoption within HSBC. A PESTLE analysis highlights political, environmental, social, technological, legal, and economic factors influencing HSBC's technological advancements. The study identifies issues such as cybercrime, ineffective software, and the need for enhanced digital services. In response, the report outlines strategic IT innovation, including the adoption of artificial intelligence, cloud computing, and digital account opening solutions. It further elaborates on HSBC's strategies, such as Horizon 1 innovation models, aimed at future growth and improved customer experience. The analysis underscores the importance of secure and efficient digital banking services in maintaining HSBC's competitive edge and contributing to economic stability.

Technology
Innovation

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Part 1- Strategy issues for driving technological innovation......................................................5
Part-2 the strategic IT innovation response ................................................................................7
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
The innovation could be stated as the generation of some creative ideas or the imagination
which could bring different solutions in order to satisfy the newest requirements of the corporate
environment or the market needs. When companies moving to global level, the concept of
innovation within business is being considered as one of the most essential. It has a power to
influence market share as well as the growth of any company. With the assistance of innovation,
companies involve new techniques to fulfil needs & requirements of market in a more efficient
way. It assures businesses to attain the competitive advantage to have a competition with the
latest trends within market (Alam, 2021). The technological innovation is giving rise to the
technical aspects in company’s action or within the product which assists in enhancing business
performance & market value. The present report focuses upon the technological innovation
issues of a banking company in market along with its PESTLE analysis and a balanced view to
understand its need and its working in business in context to HSBC Bank.
MAIN BODY
Terms of reference
Approach: the approach is the way or method through which a research will be carry
out. It defines a set of tools and criteria on with the project study have been conducted. It defines
the plans and procedures about how data has collected, analyse and interpreted. This project is
based on the inductive approach which will show the clear understanding of the facts that is
applicable to all the geographical perspective, the research conducted through this approach as a
broad perspective. This project is going to identify the functions and issues while involving
technology in the HSBC bank.
Methods:
The methods are the important key area to make a project success. Methods defined as a
set function that must be carries out achieve the aims and objectives of the research. For the
present report, the method which is being used in order to complete the report is secondary
research that is through previously published articles, journals and other resources. This is done
in order to satisfy the project needs and have a deeper understanding about the concept of
technology and innovation into organisational context.
Methodology:

It defines the methods used in order to carry out the research. There are several methods to make
a project success.
Qualitative: this method of research aims to focus about the collecting data through
theoretical perspectives. It seeks data through relevant theory and carry out the findings on the
same. This research will be done through secondary sources like books, journals, literature
review and interviews.
Quantitative: This research method is all about collecting data through statistical
sources. This method is necessary to get the relevant and accurate findings which will helps in
carry out the observation and analysis accurately (Akhmedov and Shuhkrat, 2020). This project
does not work on this method as there is requirement of analysing various issues and challenges
in IT functioning of HSBC.
Mix methods: The project which are based on mix method is collect data from both
qualitative and quantitative research methods. These data are a set of theories and statistical
based perspective which will contain relevant facts and numerical facts.
Part 1- Strategy issues for driving technological innovation
Technology is growing rapidly in the market. It becomes the vital key factor which needs
to be present in every organisation. every business functions and operations are taking growth
due to the rise in technology which makes the work easier and contribute in the development of
country. It leads to innovation into market which provide great experience to the customers.
There is requirement of various strategies to drive technological advancement effectively in the
global market. The services and strategies used by HSBC to use IT in the bank are described
below:
Vision: the vision of HSBC is to make the connectivity simpler and provide easiest cross
boarder payments as simple as domestic payments.
Providing convenient facilities: in the banking and financial institution, people are
joining connection with the banks to get the advantage of convenient facilities. The banks
provides innovative solutions just by clinking on the app and websites to make payments, enable
card less transactions and provide digital payments within a limited time (Camero and Alba,
2019). HSBC has their strategy to provide innovative solution through giving convenient
facilities at both domestic and international level.

Providing digital experiences: the banking institution have took a rapid growth in
digitalisation. They believe in undertaking effective use of internet for providing every services
related to making payments, performing transactions, saving money, opening bank accounts and
get information about loans and other details (Langarizadeh, Moghbeli and Aliabadi, 2017).
HSBC is known for providing all these digital services through mobile friendly application and
the company has launches cloud and robotics solution for the clients of global banking and
markets.
Secure payments and informations: with the help of technological advancement and
IT software, HSBC is able to secure customer payments and make it deliver from one account to
another. The company use highly efficient software to keep the information, account details,
manage cash and other transactions details at secured sources.
It has analysed that, HSBC utilise the technology in an effective manner . Due to the rise
in the competition and financial institution facing a lot of consequences due to rising inflation,
dynamic market trends, insufficient business resources and a lot of factors which creates issues
for HSBC to make proper utilisation of technology and innovation (Bessen, 2017). These issues
will be identified through below mentioned factors:
Pestle analysis
Political: This factor emphasize on the political interferences of the country. It includes
all the trade regulation, tax duties, corruption and issues due to Anti-corruption laws. These
political interferences impact on the use of technology of the organisation as there are many
restriction imposed on the utilising machineries and resources from cross border sectors. HSBC
find issues while working in UK due to the Brexit as they are not able to take advantage of
resources from European Union to bring innovation in the bank (Lloyd, 2020).
Environmental: This factor is most vital for the organisation as technological
advancement may bring impact on the environment. Use of machineries and carbon emission are
the main consequences for the environment. HSBC has its vision to provide suitable service in
make each and every customer connect with digital channels.
Social: as per this macro environment factor, HSBC needs to look for various societal
factors while driving innovation in the company. The company facing issues in terms of
cybersecurity, ineffective digital practices, undertaking cultural perspectives and people are also

affecting with Intermittent issues dues to mobile services. As customer wants quick responses
and effective software which today' financial institution are not able to perform accurately.
Technological: this is the main factor which plays major role in HSBC. In order to take
the growth and advancement, the company facing issues in technology due to non-effective
software and uncontrollable technical environment. The issue of cyber crime, data disruption,
delay in making payments and high technical outburst within the company leads to create
negative influence of the banks into market (Ye, Zhou and Wu, 2020). The issues is arrived
about legacy technology due to having in effective software and banks are required to start from
first software to makes improvements.
Legal: this factor is all about the governmental provision and laws which are imposed on
the financial institution. As banks like HSBC comes under control for government regulation in
terms of using IT solution. They need to work with GDPR guidelines that provides concern
related to cyber crime, people safety, employment protection.
Economical: this factor focus on the economical disturbance while adopting technology
in the country. financial institution playing vital role in contribution to economy so that, it shows
the importance of IT and digitalisation in the growth of financial institution. HSBC is
contributing highly in economy which due to excessive use of digital technology to render each
banking services to the customer.
It has analysed that there are several issues driving in the macro environment in terms of
technological advancement and using IT strategies. HSBC needs to put focus on providing
effective digital services as they are facing problems in software integration, cybercrime, change
in the project management of organisation, adopting dynamic environment and contribute in
economy (Gallipoli and Makridis, 2018). All these issues must be solved through taking
effective strategic decision in order to overcome with the technological challenges and make its
worth utilisation.
Part-2 the strategic IT innovation response
Three emergent technologies:
The strategic response to the issues which are faced by HSBC are based upon using
technological innovation within the organisation. The strategies are must be on the basis of
ascertaining market growth ans has that much of potential to provide an amazing experience to

the customers. Therefore, the HSBC bank has adopting three emergent technological ways to
solve the issues in global market. These are described below:
Using Artificial intelligence: It is one of the best emergent technologies which is
adopted by every banking sector in the industry. It is become the need for every organisation
which is active in digitalisation. Using AI technology is the best response to solve the technical
issue of ineffective customer services, analysing the needs of customers and give quick
responses. it become possible with the use of AI through giving robotic process automation
which includes availability of chatbots, machine learning as these are the vital tools to get into
the insight about what customers wants, what issues they are facing and the bank become able to
give quick responses to ascertain effective banking services.
Cloud computing: the number of banks in the whole world is using the technological
solution through cloud computing software (Lin and et.al., 2020). In the era of technology and
digitalisation. Software are the most important elements which helps in keeping the data secure,
updated within lower cost an give high speed computerisation.
Digital account opening: as the banking sector facing issues of inconvenient services
and get frustrated through going to bank to open an account. The banks like HSBC has come to a
strategic decision to provide digital services for opening an account. HSBC assures to give
require or application for an account opening and get response within 10 seconds. Therefore, it
is an effective response to solving inconvenient services issues in the society as it is not
practically possible to attend each customer and solve their queries daily.
Response to the issues
The issues identified in terms of technology for financial and banking institution are find
out in terms of ineffective services, delay in response, cyber crime and safety of information and
assets. These issues are serious for HSBC to be solved within less time to maintain it reputed
image into market. As banking sectors are the gems for economy which maintain the demand
and supply, inflation and interest rate within country (Antonelli, 2019). Therefore, the HSBC has
provide response to issues in order to bring better technological innovation in the bank. They
have adopted new ways of working by ascertain software that are highly made with secured
protocols, storage and great functioning. Also, the bank has launched data and innovation labs
which leads to generate cloud and robotic solutions in the market. This strategy has shows much
growth in the market which contribute in a lot of changes brings in banking services. As of now,

people could take use of mobiles to make cash transaction, enable secure payments across
boarders, make cash transfers through card less ATM and chatbots. These cloud software
provide highly automated data about which is re-usable and easy to keep it stored in secured
way. Therefore, HSBC has ascertained future horizon strategy in order to see the future of
company. These strategy are described below:
Horizon 1: this horizon is based on the innovation model. It shows that, innovation are for short
terms purpose which shows its require within 1 to 3 yeas of time period (Ahmed and et.al.,
2018). Therefore, HSBC will measure their performance through the use of innovative strategies
and analyse how the time could be managed to get the best results in providing customer service.
Horizon 2: as per this horizon model, the organisation make innovation by exploring new ideas
and believes in brining a new concept. Therefore, HSBC keep in mind the use of robotic and
cloud functioning which may take some time to grow in market which require high technological
process and revenue streams to become the future leader.
Horizon 3: the innovation as per this horizon stage are for large projects which takes time of 10
to 12 year to become succeed and grow in market. This strategy is suitable for HSBC to secure
its growth in the future market by working on innovation project to drive fuller utilisation of
technology.
Identification of issues or challenges associated with implementing strategies for
technological innovation
Innovation and technological up gradation is not an easier tasks for the business. It
require a lot of efforts, strategies and failure to get succeed in innovation. Therefore, financial
institution work for the whole economy and has great impact by the customers (Brooks and
Pomerantz, 2017). So that, there are various challenges faced by bank like HSBC in order to
adopt new innovation and technology and implement it within organisation. These challenges
are described below:
a cultural shift: as technology is become the highest need for banking institution which
leads to results in shifting from traditional to modern culture and ways of functions. it leads to
provide difficult to employees top adjust in the environment (Imran, Hamid, Aziz and Hameed,
2019). HSBC is also facing issue in seeing robotic labs in the many parts of UK as they need to
hire new professionals due to not having existing culture of innovation which will not be suitable
for existing employees.

Changing business models: engaging technology and innovation make change in
business functioning, financial requirements and the whole plan of banks. It becomes challenging
for HSBC to manage the increasing cost of business while the company has low interest and
exchange rates. It become difficult for HSBC to implement strategies effectively as it will take
time for the bank to be a future leader due to unstable economic conditions and Covid-19 crises.
Security breaches: Technology and digitalisation is now being an essential part of every
individual life. Some use it for right purpose and some for wrong purposes also. This lead to
threatened the banking institution in terms of security issues like hacking, data theft and
fraudulent activities (Thatcher and et.al., 2018). This impact on the functioning and reputation of
the bank which is not relevant for the future of HSBC.
Recommendations
It is time of digitalisation and there is need for all the business organisation to adopt use
of latest technology. The use of digitalisation in banking sector is also enhancing. Adoption of
latest technology has become crucial for banks and their growth. The banks are able to enhance
the customer services by using the technology in effective manner. It saves the time of customers
and enhances convenience (Sheldon, 2019). There are certain challenges that are faced by HSBC
bank and the recommendations to overcome them are as follows:
 The must analyse the needs and wants of customers. There is need to know about the
requirement of customers and then provide them services. Due to use of digital methods
there are more and more cyber crimes being observed. The HSBC bank must work on
cyber security and assure that the data and information of the customers. It will enhance
the trust of customers in the bank and satisfy their needs properly.
 There is no need of infrastructure for providing online services to the customers. Due to
Covid-19, the customers are aware and conscious about their health. The use of online
service has supported them at the time of lock down.
 There is need of bringing change in order to compete in the market. HSBC bank is
operating effectively but will attain growth if they will not bring changes. It is important
for the business organisations to know about the changes going in market and implement
in a proper manner. The ability to bring changes assist them to serve the requirements of
customers and establish effective brand image. They can use artificial intelligent, card-
less services etc. to use latest technology.

 There is need to formulate strong strategies and to implement the same in proper manner.
The employees are resistant to change. So, there is need to provide proper training to the
employees so that they are able to bring changes and adopt use of latest technology
effectively.
 The use latest technology and innovation is not enough. HSBC bank must also take care
about sustainability. They must take care of environment and at the same time fulfil
corporate social responsibility to achieve success in long run. It will also help them to
establish strong brand image.
Conclusion
From the above report, it is analysed that there is need to use latest technology.
Information technology plays a major role in success of business. There is need to understand the
importance of digital technology and adopt the same for success of business organisation. In the
starting of report there is discussion related to approach, methods of project. PESTLE analysis is
done in the report so that the issues that are faced by the business organisation are analysed. The
strategies formulated by the company to overcome the issue are mentioned. The challenges based
by the company while implementing the strategy are also analysed,. In the end of this report,
recommendations are mentioned. It becomes important for a company to use latest technology
effectively and achieve success for their business.

REFERENCES
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