Integrated MBA Report: Challenges and Opportunities at HSBC

This report identifies and analyzes the challenges faced by HSBC, a global banking giant, focusing on issues such as compliance, regulatory enforcement, money laundering, technological disruption, and geopolitical factors like Brexit. It integrates various theories and techniques from different disciplines within an MBA curriculum to propose solutions. The report delves into specific incidents, including US Senate investigations, currency schemes, and scandals, which have impacted the bank's performance and reputation. Furthermore, it examines HSBC's business groups, divisions, and strategic aims, emphasizing the importance of effective communication, risk management, and technological adaptation. The analysis considers both internal and external factors affecting HSBC, aiming to provide a comprehensive understanding and actionable recommendations for addressing the identified challenges. Desklib offers this and similar solved assignments for students.

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Challenges of HSBC Bank

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Executive summary
HSBC is one of the greatest group of banking around the globe and marked as the fifth biggest
corporation in Forbes Global. It is called as HSBC because of the members of a foundation, the
Hongkong and Shanghai Banking Corporations. It has 110 million clients internationally with
five Customer Groups and different affiliated members. The bank has about ten thousand
workplaces internationally with 232,000 workers in seventy-six states and areas. About 110
million international clients, e-based are 16.5 million. HSBC is the world largest local corporate.
It has operated with other corporates and brokers in UK affiliated with the FORGE, an unpaid
association seeking to progress some tactics to problems of significance to the economic
facilities business. The description will divulge the contextual features of the corporation, loans
explanation, conclusions, and commendations constructed on the knowledge congregated.

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Table of Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................5
HSBC: Challenges and Resolution..................................................................................................5
HSBC Direct................................................................................................................................6
HSBC net.....................................................................................................................................6
HSBC Advance............................................................................................................................6
HSBC Premier..............................................................................................................................6
HSBC’s principal business groups and divisions............................................................................6
Commercial Banking...................................................................................................................7
Global banking and markets........................................................................................................7
Global private banking.................................................................................................................7
Banking of sales and the administration of treasury....................................................................7
Group service centers...................................................................................................................7
Aims:................................................................................................................................................9
The current Geo-Political Situation.............................................................................................9
The BREXIT Effect.....................................................................................................................9

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Issues faced....................................................................................................................................10
Compliance and Regulatory enforcement..................................................................................10
Money Laundering.....................................................................................................................10
US Senate investigation.............................................................................................................11
Currency Scheme.......................................................................................................................11
The Global Technological Disruption........................................................................................11
Approaches of Activities...............................................................................................................12
HSBC Oman..................................................................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................17

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Word count: 3000

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Introduction
HSBC is an international Bank and financial services company, started its operations in 1866,
with headquarters in Hong Kong and Shanghai. This bank is the seventh largest in its assets and
also the largest bank in Europe. HSBC has four major operations, commercially in banking;
International and Investment funding, Trade and Treasury Managing, International and Private
Banking. The bank has marked its presence significantly, in the worldwide markets of finance,
having its operations in America, Asia Pacific, and Europe. HSBC is recognized as a
conventional and risk-averse strategic corporate (Brownsell & A, 2009).
HSBC: Challenges and Resolution
HSBC is primarily marked on the stock trades of Hong Kong and trade stocks of London. It has
been the second largest listed company with the latter. The company has thirty thousand and nine
hundred offices in sixty-seven states across Africa, Asia, Europe, and America. HSBC has been
marked as the most moneymaking corporate with $19.13 billion of total revenue in 2007.
To manage its business operations during the time of economic crisis HSBC endures leading its
conservative tactics, intended at the approach of risk-averse as compared to other corporates
(GHEORGHE & C, 2015). A group which is solid and an esteemed bank who vigorously
accomplishes its possessions, market and sales prices worldwide and is graded as the most
money-making bank in the world. The strong occurrence of the groups on the market of finance
is the secret behind its success in the world.

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A company which is supported up by 330,000 workers, employed in 85 states, 210000
shareholders and 128 million worldwide. These figures indicate company’s unmatched presence
in the global world market.
HSBC Direct: it’s a banking over the phone or online direct banking operations which entices
clients through money advancing, accounts and finance support. The bank was established in the
USA first and after its success, it was launched in other states including South Korea, Canada,
Australia, France, Taiwan, and India.
HSBC net: this offers the transaction functionality of the bank, which ranges from the outflows
and management of cash to the services of trade. This amenity is widely utilized for the
international customers and the wide corporate. The international e-commerce bank’s plan for its
trade and the international customers are also under this brand.
HSBC Advance: this is a group product which is typically used by working professionals. This
is for days today baking services like transfer of salary, ATM card advancements, recent account
and fund accounts, business plan of protections and financial techniques. The HSBC empowers
the users to open an account in any state and helps in their credit history transfer.
HSBC Premier: this product is the premium fiscal facilities product of the bank. It has its own
Select card called HSBC Premier World Card. The users having this card have a steadfast
premier special relationship executive, 24-hour admittance internationally to the call centers,
permitted banking facilities and favored charges. HSBC has made a special slogan for this
“Premier for one, Premier for All”.

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HSBC’s principal business groups and divisions
HSBC has four business groups to organize its customer-facing activities those are commercial
Banking, financially supporting, sales banking and treasury administration, and private and
international banking.
Commercial Banking: the bank provides financial services to small, medium-sized and middle-
market enterprises. HSBC has around 2 million customers including sole proprietors,
partnerships, public quoted businesses and incorporated businesses.
Global banking and markets: for its institutional and corporate clients the bank provide
investment banking and financial solutions which includes corporate banking, investment
banking, payments and cash management, trade services and asset management services.
Global private banking: the banks private banking is very famous in the market providing
facilities to the high worth customers and their families across ninety-three settings of Europe,
America, Middle East Africa and the Asia-Pacific region.
Banking of sales and the administration of treasury: wide ranges of private economic
facilities, including existing and savings accounts, loans, financing of the car, insurance, credit
cards, pensions and funds obliged to over fifty-four million users (Virgo & J, 2013).
Group service centers: To lower the cost of facilities in the states that are developed, HSBC is
familiar with the work of processing to decrease the cost of economies to save the money. HSBC
has started its operations in cities like Pune, Bangalore, Gurgaon, Hyderabad, Kolkata,
Guangzhou(China), Kuala Lumpur (Malaysia) and Curitiba(Brazil) to take on work as the
processing of data and services to the users and internal software engineering.

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In the future, the bank will essence on the tactical and arranged areas for the operations in all
over the world with the further prominence on the management of human resource with
strategies and technically innovative applications within the group. These two aspects will enable
HSBC to run quality amenities and win the markets internationally. Namely, the enhanced and
new security systems will avoid leak in the security systems and avoid further leaks of
information. In the light of the ongoing financial crisis, the bank will not apply the $25 billion.
Fund showed by the government of UK to save the banking system of the state. This method is
completely different from those that are leading by the groups from its main rivals at the present.
HSBC plans to lend $ 750 million to underpin the capital base of UK. With this persistence over
the last four years the bank has issued finances to aid other banks of UK.
The answer to the question of saving the electronic-based transfers of cash is a complex
procedure of keeping currency to count on upon several parts and measures all allied finished an
erratic system all around the globe.
Systems to be used by the HSBC in future are:
1. Firewall enterprise and management.
2. Group of structures.
3. Settings of web and enabling the internet facilities.
4. Management of security.
5. Interruption Recognition Arrangement
6. Host developed methods
7. internet commercial submissions including the Lending, payment, investing.

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8. Inward organization servers.
9. Software design for sustenance.
Aims:
HSBC has been doing very well in the local and global market all these years until 2016 when
there was a 62 percent fall in pre-tax profits. There are numerous reasons for the fall which are
both internal and external. After a careful reading and going through lots of articles on the
internet here are some major problems or the challenges the company is facing:
The current scenario of HSBC Bank in Oman highlights that the company has achieved the
higher customer base, but lacks the systematic performance schedule to provide the most
effective customer services. It is due to the lack of proper communication that prevents the
company from building the synchronized work atmosphere and the effective teamwork. The
study would thus shed lights on the importance of the effective communication to build the
strong teamwork.
The current Geo-Political Situation: HSBC being a global company with their huge presence
in the European an US markets. The company has a major shareholding in both North and South
America with headquarters in USA, Canada, Mexico, Bermuda and HSBC Finance Corporation.
Trump and Clinton have big differences in their policy proposals which create uncertainty post-
election policy outcome. This uncertainty could potentially affect the direction of both the US
and global economy and markets. Especially Business Tax, Income Tax, Trade Agreements and
Immigrations. This led to investors not to invest in portfolio though the effect was the only short
term.

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The BREXIT Effect: when BREXIT took place HSBC’s net profit fell by 82 percent, it
damaged the profit margins, non-existent interest rates and increase in regulations. HSBC’s
profits thinned down from its private banking operations in Europe. The Swiss-based unit came
to controversies in a tax fraud in 2015 resulting in huge fines and forced restricting of the
division. The bank deemed its performance satisfactory even after evident reassurances and
explanations the traders did not believe, and the bank faced the huge financial crisis. While this
was already going with the bank, BREXIT took place and in the preparations, the bank
announced $300 million in permissible and repositioning fees, as it planned to move its 1000
staff from London to Paris. In the half of 2017, the bank had $4 million for the cost linked with
the UK withdrawal. The company has planned to move the London based funding bankers to
Paris about of its one-fifth value, the movement of the employees is expected to incur a damage
of $1 billion of profits.
Issues faced
Compliance and Regulatory enforcement: HSBC has been into many controversies after 2009
like money laundering, US Senate investigation, $3.5 billion scheme of currency, Forex Scandal,
Libor and Euribor to mention a few ( Naheem, 2016).
The bank stated it is liable to an audit according to the section 166, where the manager gives a
free congregation, including the firm's book accounts and the aptitude to scrutinize the control
and checking the balance of the corporation.
HSBC was obliged to make repayments with a calculation of $1.9 billion to the experts of US
after it was initiated to have scarce of control management setup. They were directed to
announce a free consistency of screening, recognizing the probable unreceptive to tax matters.

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The bank is furthermore subjected to the examinations of progressing and studies by the Justice
Department of US.
Money Laundering: HSBC was caught laundering Black money through India after a strict
undercover investigation was done by a media outlet in India where the bank officers were
caught in the camera. HSBC has been whacking illegal money with a value of 60 billion₹
(US$920 million) in Geneva. Also, for suspected drug dealers and criminals, HSBC has set up
offshore accounts in New Jersey (Lopez, Linette, Warren, 2013). In June 2015, the bank was
fined 40 million Swiss francs, after money laundering investigation conducted by Geneva
Authorities.
US Senate investigation: US officials ordered HSBC to reinforce the laundering practices for
the anti-money plan. US Senate published a report in July 2012 which stated that the bank has
breached the currency valeting rules, had abetted Iran and North Korea to evade US nuclear
weapon agreements.
Currency Scheme: HSBC bank alleged $3.5 billion currency scheme scam done by the
executives of the bank to its own clients for manipulating the foreign market trades to profit
themselves and the bank.
Likewise, there were more scandals and controversies which attributed to bank poor performance
and, the investors and the traders could not trust the bank anymore.
The Global Technological Disruption: while the world is fast changing, embracing technology
and depending more on the internet for the day today bank activities. The concept is changing
fast, with doing day to day banking activities over the internet than following traditions banking
business model. These days the bank may need less manpower, but technological infrastructure