Innovation Audit of HSBC: Performance, Capabilities, and Future

This report provides an overview of innovation management within HSBC, a multinational universal bank. It begins by detailing HSBC's innovation history, from the shift to digital transactions to the introduction of mobile banking, highlighting the impact of these changes on customer experience and operational efficiency. The report then assesses HSBC's existing innovation performance and capabilities, including digitization at scale, partnerships with technology innovators, and the development of a digital vault using blockchain technology. Furthermore, it discusses AI-driven predictive banking and cardless ATM services. Looking ahead, the report identifies potential future innovations for HSBC, such as biometric technology, microservices, the Internet of Things (IoT), and chatbots, emphasizing their potential to enhance security, flexibility, and customer service. Ultimately, the report concludes that innovation is crucial for HSBC's continued success and growth in the evolving banking sector. Desklib provides comprehensive resources, including similar reports and solved assignments, to aid students in their studies.

Managing Innovation in
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The Organization introduction and its Innovation History..........................................................1
The Organizations existing Innovation Performance and Capabilities.......................................2
The Industry in 2022....................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Innovation management is the procedure of managing and implementing innovations in the
business for making the business more productive and profitable. Innovation management in
business also helps in the business growth of the organization and increase the competitive
advantage in the market (Bilovodska, and et.al, 2021).it involves all the actions, activities and
decisions required for implementing the innovation strategy in the business.in this report we will
study about the innovation history of HSBC and the organizations existing innovation
performance and capabilities. This report will also highlight on the future innovations of the
company and what will be the future innovation requirements of the company.
MAIN BODY
The Organization introduction and its Innovation History
Managing innovation is very important in running the business as it helps in increasing the
growth and productivity of the organization. Managing the innovation means the process of
managing innovative ideas for running the business.in this competitive environment everyone
have some qualities and benefits within them, so as to earn growth and productivity
comparatively with the competitors innovation is very necessary. Here we will discuss the
innovation audit of one of the largest bank in UK which is HSBC. HSBC is a multinational
universal bank and its headquarter is in London, England, UK .the bank provide financial
services worldwide and deal with products like asset management, banking, trading, credit cards,
insurance, securities, mutual funds and many more.HSBC has its offices in 64 countries and
have serving its services to 40 million countries internationally. In 2020 it was world’s sixth
largest bank in terms of total assets value and market capitalization. HSBC is organized by three
business groups like commercial banking, global banking and markets and wealth and personal
banking.it is also world’s 40th largest public company according to the survey by Forbes
magazine (Belitski,and Godley, 2020). From using manual operational work to doing every
transaction digitally banking sector have been changes drastically. Innovation makes the banking
sector more productive and efficient. Innovation helps in changing the expectations of the
customers. Banking sector is upgrading in taking innovations in the process of their work for
becoming customer centric and for understanding the needs of customers. Similarly there are
many innovative steps taken by HSBC Bank. Innovation of ‘calculators and codes’ over pen and
ink is one of most successful innovation done by the banking sector. Earlier everything was done
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manually but now these days all operational work is done digitally for quick and efficient
service for customers. Earlier accounts were open by filling the form manually but now this
practice is done by scanning the forms and open them digitally.by this innovation banking
becomes so easy for the employees and for the customers too. Next innovation done by the bank
is ‘Banking at sea’ which means the bank introduced the concept of mobile banking and this was
a very innovative step taken by the bank for the betterment of customers. Earlier for stopping
any cheque or for checking the statement customers have to visit the branch but now after
mobile banking every operational work of banking can be done through mobile banking.it
becomes very easy for the customers as they can do banking at any time at any place.
Digitalization makes the banking sector so prompt and efficient as customers need not to go to
banks for every small pity issue. Every solution of their problem is available on internet or
mobile banking. These innovative steps taken by the bank makes the industry more successful
and productive and this is also beneficial for the customers (Soebandrija, 2020). The main aim
of the organization is to have empathy towards their customers and help them in providing good
service to them.
The Organizations existing Innovation Performance and Capabilities
The financial sector is setting an example of asset representation by the impact of moving from
physical pen and paper to computerization. There are many innovation performance and
capabilities in HSBC bank. Innovation in the banking sector makes it more successful and
productive. Similarly HSBC bank also have some innovation strategies for growing the business
well in the market. The organization is providing digitization at scale which means the
organization is ensuring that the customers are getting the digital banking in a faster and easier
way (Meena, 2019). For customer benefit the organization have started a partnership with the
technology innovators. Another innovative strategy of the bank is to become a net zero bank by
which the organization can support to do transition to a low carbon future especially in the areas
which are carbon challenged industries are situated. HSBC have introduced a digital vault in
2019 which allow the customers to access their private assets like equity, debt and real estates in
real time.in this customer do not have to request for a paper based application for doing this.it
also provide a USD20 billion worth of assets on the block chain. Block chain technology is
entering hugely into the market to change the rules and procedures followed by financial
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institutions. In HSBC the aim is to have transformative potential of tokenisation and digital
assets (Gupta, and Gupta, 2018). The main purpose of the organization is to help the customers
in navigating this change and take the benefit of ecosystem in the digital assets ecosystem
especially for the development of positive regulatory. Furthermore in 2019 the organization have
innovated AI driven predictive banking which means the organization is making all the internal
and external data and making the predictive portfolio of the customers in real time. The
organization is also helping the customers in robo-advisors and AI-driven Chabot by which they
can provide a personalized solution to the customers at any point of time. The next innovative
strategy taken by the organization was the introduction of the card less ATM service in which
customers need not to carry the ATM card with them for the cash withdrawal, they can use their
mobile number instead of using the ATM card. This is making the customer more secured and
safe about their financial actions as customer can check statement, withdrawal the cash, request
cheque book and many more with the help of this. The organization is also providing the facility
of fintech companies which are specialized in developing the technology solutions that help the
companies to manage the financial aspects of the business for instance new software
applications, process and other models of business (Au, 2021). This is making the industry a
multibillion dollar industry internationally. Introduction of UPI that is unified payment interface
is also one of the biggest innovation taken by the organization for improving the customer
service.by this customer need not to take cash with them , they can just do the transaction by
scanning the UPI code. This becomes very comfortable and easy for the customers to do the
transaction through digital mode. All these are some of the innovation practices taken by the
organization for increasing the productivity and growth of the bank.
The Industry in 2022
Innovation in banking sector helps the customer to meet changing customer expectations.
Innovation is about creating and adopting new ideas for the betterment of the organization and it
is key factor behind success and growth of the organization. Baking sector is becoming more
successful because of advancement in the technology. This helps the customer to meet their
requirements and needs. Innovation in banking sector also helps to update the internal
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operational process and maintain the market share (Hammoud, Bizri, and Baba 2018). There are
many such innovations which the HSBC bank can adopt in future for better productivity and
growth. Some of them are as follows:
1. Biometric technology-Customer want their financial information to be very safe and
secured and biometric authenticity keeps the information of the customer very secured.
Biometrics are physical human fingerprints, iris and voice which can used to verify the
identity of the customer. Just like passwords and pin biometrics are very hard to
predict.in future it becomes very essential for the banking sector to provide a strong
security to the customers. There are some channels where bank can use biometric
technology like mobile banking. In this the customer should not able to login without
biometric authenticity (Forcadell, Aracil, and Úbeda, 2019). This can also be used in
digital on boarding. ATM transaction are also very risky these days so banks can
implement this technology in ATM machine also so that only authorized customer can
use the services of the ATM.
2. Micro services-Earlier many applications were built by using the monolithic architecture
and this is quite inflexible approach. But due to more use of mobile phones and fulfilling
customer expectations the market started making applications which are easy to make
and upgrade and this can be achieved by micro service architecture.by the help of this all
the banking applications will be segmented into standalone services that will work
independently but will work together flawlessly.
3. Internet of things (IOT) - Internet of things is a network of devices which is connected
by the help of internet which is used to gather and transmit the data. This can change the
nature of banking sector. Banks can use the internet of things in payments like customers
can pay the amount to some shops o malls by their wearable like smart watch near the
point of sale machine (Ramalingam, and Venkatesan, 2019).by this customer can get the
monthly statements on wearable. The digital wallets stored in the customer’s
smartphones or mobile phones will allow the customers to pay for the products from
their device only.
4. Chabot- Chabot are the software programs that provide a platform for online
communication with the internal department of the organization. This can be achieved by
artificial intelligence. With the help of this customer can raise their query regarding to
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the banking services at anytime and anywhere. This is a type of a personal digital
assistants that will answer the question of the customer in real time and provide the
solute instantly (Moşteanu, and et.al, 2020). This will communicate with the customers at
a very low cost and help the customer to meet the needs and requirements of them.
CONCLUSION
From the above report it has been concluded that innovation is the key to success.it is the way of
creating new ideas into the organization for increasing the productivity and growth of the
organization. Innovation makes the customer satisfied by the services of the organization.
Innovation in the business is never a new thing to business. Managing innovation in the business
plays a crucial role in the development of the business and the organization (Tidd, and Bessant,
2020). We have studies about the innovation in the banking sector and it has been understood
that innovation makes the industry more productive and successful.
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REFERENCES
Books and Journals
Bilovodska, O., and et.al, 2021. Innovation management of enterprises: legal provision and
analytical tools for evaluating business strategies. Journal of Optimization in Industrial
Engineering (JOIE).
Belitski, M. and Godley, A., 2020. The synergy approach to understand entrepreneurship and
innovation ecosystem taxonomy.
Soebandrija, K.E.N., 2020. Industrial Systems Engineering on Physical and Digital Banking: A
Service Innovation and Ambidexterity Perspective.
Hammoud, J., Bizri, R.M. and El Baba, I., 2018. The impact of e-banking service quality on
customer satisfaction: Evidence from the Lebanese banking sector. Sage Open, 8(3),
p.2158244018790633.
Meena, R., 2019. Implications of Digitalization in Banking sector: A Review of
Literature. International Journal of Advanced Scientific Research and Management, 4(9).
Gupta, A. and Gupta, S., 2018. Blockchain technology: application in Indian banking
sector. Delhi business review, 19(2), pp.75-84.
Au, A., 2021. FinTech innovation and knowledge flows in Hong Kong’s financial sector: a
social network analysis approach. Journal of Asia Business Studies.
Forcadell, F.J., Aracil, E. and Úbeda, F., 2019. The influence of innovation on corporate
sustainability in the international banking industry. Sustainability, 11(11), p.3210.
Moşteanu, D., and et.al, 2020. Digital technologies’ implementation within financial and
banking system during socio distancing restrictions–back to the future. International
Journal of Advanced Research in Engineering and Technology, 11(6).
Ramalingam, H. and Venkatesan, V.P., 2019, October. Conceptual analysis of Internet of
Things use cases in Banking domain. In TENCON 2019-2019 IEEE Region 10
Conference (TENCON) (pp. 2034-2039). IEEE.
Tidd, J. and Bessant, J.R., 2020. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
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