Strategic Analysis of HSBC's Online Banking: Issues and Solutions

This report provides a strategic analysis of HSBC Bank's online banking operations, examining the challenges faced by the financial institution. It begins with an executive summary and an overview of the bank's background, followed by a discussion of the concept of online banking and its impact on HSBC. A SWOT analysis is conducted from the customer's perspective, highlighting strengths, weaknesses, opportunities, and threats related to online banking. The report then delves into specific issues faced by HSBC, analyzes the pros and cons of online banking, and offers recommendations for improvement. The aim is to address issues affecting business operations and customer interest levels. The report concludes by summarizing key findings and offering strategic insights to enhance HSBC's competitiveness in the market.

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Name of the Student
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Author Note

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Executive Summary
The purpose of this paper will be to discuss about the recent issues that has been faced by the
management of HSBC Bank, which is mainly regarded with the online banking that is affecting
the business operations along with hampering the interest level of the customers of the bank.
The strategic analysis will be related to the strategic management that is performed and followed
by this financial institution from the United Kingdom. The report will involve a thorough
discussion of the background of the bank before and after the usage of online banking within the
business operations along with the advantages and disadvantages of online banking with its
effect on the overall banking operations of HSBC. A SWOT analysis will be done from the
viewpoint of using online banking by the customers of this particular banking and financial
institution. The main analysis of the identified issue will also be performed in this report along
with providing recommendations which the management need to follow so that the raised issues
can be solved and efficient services can be provided by these management of this financial
institution to its customers and gain the competitiveness in the market places of the United
Kingdom and other regions where the bank is present. A brief conclusion will end this paper,
where the major findings from the paper will be given as a summary of this report.

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Table of Contents
Introduction......................................................................................................................................3
About the Organization....................................................................................................................3
Concept of Online Banking.............................................................................................................4
SWOT Analysis...............................................................................................................................6
Strengths......................................................................................................................................6
Weaknesses..................................................................................................................................7
Opportunities...............................................................................................................................7
Threats.........................................................................................................................................8
Issues with HSBC............................................................................................................................8
Pros and Cons of Online Banking Method....................................................................................10
Advantages................................................................................................................................10
Disadvantages............................................................................................................................11
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................13

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Introduction
The aim of this paper will be to discuss about the recent issues that has been faced by the
management of HSBC Bank, which is mainly regarded with the online banking that is affecting
the business operations along with hampering the interest level of the customers of the bank.
The strategic analysis will be related to the strategic management that is performed and followed
by this financial institution from the United Kingdom. The report will involve a thorough
discussion of the background of this bank before and after the usage of online banking within the
business operations along with the advantages and disadvantages of online banking with its
effect on the overall banking operations of HSBC. A SWOT analysis will be done from the
viewpoint of using online banking by the customers of this particular banking and financial
institution. The main analysis of the identified issue will also be performed in this report along
with providing recommendations which the management need to follow so that the raised issues
can be solved and efficient services can be provided by these management of this financial
institution to its customers and gain the competitiveness in the market places of the United
Kingdom and other regions where the bank is present. A brief conclusion will end this paper,
where the major findings from the paper will be given as a summary of this report.
About the Organization
HSBC Holdings plc. Is a multinational bank as well as a financial services holding
company and have its presence across the world. It belongs from the banking and financial
institutions, and the traces of this multinational company belongs in Hong King as the Hongkong
and Shanghai Banking Corporation. The current form of this institution was established in the
region of London to perform as a fresh holding organization in the year of 1991. The products

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that are offered by the management of this institution are financial services, which includes retail
banking, investment banking, corporate banking, mortgage loans, wealth management, private
banking, finance, credit cards and insurance. It can be stated in this context that he Hongkong
and Shanghai Banking Corporation possess almost 3,900 offices that are situated in 65 nations
around the world, which involves the territories of Asia, Europe, Africa, Oceania, South and
North America. The present customer base of this financial institution is around 38 million
customers. Currently, this is the 6th largest public organization in the world, and 7th largest bank
across the world as of in the year 2018. HSBC, from the viewpoint of the banking operations, is
organised within four major group of business, which are Global Banking and Markets
investment banking, Commercial Banking, Global Private Banking and Retail Banking and
Wealth Management (Salus and Weeks 2016).
Concept of Online Banking
It can be stated in this context that the concept of online came into the forefront after the
year 1980, and the first region where it was introduced was the region of the United Kingdom
only. People started to use internet in their daily operations to make them faster and smoother.
The launch of the Homelink Service of Nottingham Building Society was first to be used in this
region in the year 1982. The Homelink service was offered and delivered through formation of a
partnership between the British Telecom's Prestel service and Bank of Scotland. Around the year
1994, usage of the internet was increased by the banking institutions due to increase in the
popularity of the internet, which also helped to promote different services that are offered by
various banking sectors that operates across the world. From the viewpoint of the banking
operations that is performed in modern global context, online or internet banking plays an
integral part and without this, no banking and financial institution will be able to gain the

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competitive advantage against rival business houses that operates across the global business
world (Niranjanamurthy and Chahar 2013).
Figure 1: Percentage of Online Banking
Source: Created by the Author
From the above picture, it can be stated that the number of online banking users across
the work has reached to 4.54 million approximately, which has increased the dependency on
internet by the management of the banking and financial institutions like that of the Hongkong
and Shanghai Banking Corporation. The data is till the month of January 2020, and the number
encompasses almost 59% of the total global population. It can be noted in this context that the
regions of India, the United States and China possess the most number of internet users (Sharma

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2016). The global business world cannot offer a single product or service without using the
internet services in their business operations, where billions of people are connected through this
internet facility and can access the official websites of the banking and financial institutions from
almost every part of the world. From the viewpoint of the region of the region of the United
Kingdom, more than 48% of the total population of this region uses internet banking, which has
increased from the year of 2017, which was 41%. The advancement in the field of technology
has increased the number of internet banking, and the number will increase in the coming days.
Using the official applications of the banks helps to engage more number of people with them.
For example, the official mobile application of the Hongkong and Shanghai Banking
Corporation will help to offer their services to most number of people with a single click and the
same is applicable for the online baking users, where the access and usage of the official website
of the bank can be made from mobiles, laptops and personal computers in order to access the
wide array of services that are offered by the management of this particular banking and
financial institution from the United Kingdom (Mishra 2013).
SWOT Analysis
The SWOT analysis will be performed with taking the usage of online banking taking
into account. Full analysis will be performed on the Hongkong and Shanghai Banking
Corporation in the context of using the online banking services that are offered by the
management of this financial business house.
Strengths
Engaging the people through the online banking services acts as a major strength of this
financial institution. This will help to increase the satisfaction level of the customers along with
the time, as they do not have to come to the branches of the bank and can transfer the money or

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perform other financial work on the platform of online banking platform of this bank.
Relationship between the customers and the employees of the bank is enhanced through offering
wide array of services on their online platform (Jun 2018). As time is saved for the customers
who are using the online banking platform of the Hongkong and Shanghai Banking Corporation,
they will be more inclined to refer others to avail the services of this banking institution, which
will act as a word-of-mouth publicity for the bank, and in this way, the satisfied customers will
help to attract new people to avail the services of the Hongkong and Shanghai Banking
Corporation in the region of the United Kingdom along with other places where they are present.
Weaknesses
Over-dependency on internet hampers the flow of business operations, and issues that
arises in case of network failures reduces the satisfaction level of the customers. As online
banking totally depends on internet, so issues with internet will partially or fully stop the
customers to avail the services provided by the management of the Hongkong and Shanghai
Banking Corporation. If the customers are unable to avail the services of this financial institution
through online banking platform, they have to come down to their respective branches and avail
the services. This can only be available within the working hours of the bank, and important and
urgent transactions, if required, cannot be performed except this banking hours, which will lead
to shift of the customer base to the rival banking institutions of the Hongkong and Shanghai
Banking Corporation that are present across the globe (Moh'd Qasem 2014).
Opportunities
Fresh and innovative offers can be provided by the management of this financial
institution to its customers, and this is a new and fresh market opportunity for the Hongkong and
Shanghai Banking Corporation. This helps to increase the revenue earning along with the market

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share of the bank, which will help to upgrade their online banking platform. Increased level of
customer satisfaction level will help to retain the customer base along with attracting new people
from the market places where this financial business entity is present. Efficient and secured
online banking will also help the customers to perform urgent transactions at any point of the day
(Anyadike-Danes, Hart and Du 2013). As the number of mobile users are increasing, it will also
act as an opportunity for the management of the Hongkong and Shanghai Banking Corporation
to target them and turn them as their customers, which will help them to upgrade their services
and able to meet the needs and requirements of the people of the United Kingdom as well as the
other parts of the people.
Threats
The major threat in providing online banking services to the customers of the Hongkong
and Shanghai Banking Corporation is continuous providing the internet facility to the customers
who are availing the online banking services of this financial institution. Issues with internet
severely affects the daily life of the people who depends on internet banking to operate their
businesses or need to pay an amount in time of an emergency (Hossain and Khan 2016). Over-
dependency on internet banking, thus, possess a major threat to the management of this financial
institution. The rival business houses are also offering the same kind of offerings to their
customers and if they are providing better internet facilities to their customers, then there might
be a shift in the customer base which will possess major threat to the management of the the
Hongkong and Shanghai Banking Corporation, and this is the area where issues has raised,
which will be discussed later in this paper.

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Issues with HSBC
In this context, it can be stated that there are issues with online banking platform of the
Hongkong and Shanghai Banking Corporation, which is resulting in increase in the number of
customer complaints as well as the unsatisfied level between the customers who are using the
online portal. Customers were unable to check their balances and make any transactions or
transfer any sum of money. These has increased anxiety level between the customers of the bank,
though the management had assured that they were aware about the issue and were trying to fix
it. Many small businesses depend on daily transactions, and they get hampered or the business
operations might get severely affected due to issue with online banking platform of this financial
institution. As it has been already discussed that internet banking fully depends on internet, so
any kind of issue with internet would partially or fully stop the service and would adversely
affect the daily business operations of entrepreneurs who are involved with their businesses. And
it can be stated in this context that the online banking system of this particular financial business
entity has suffered twice in the last month of the year 2019 within the gap of 12 hours (Brignall
2020).
The people in the region of the United Kingdom were unable to make transactions from
their accounts with the Hongkong and Shanghai Banking Corporation, and many business
transactions could not be completed and it hampered the business operations of various small and
medium business entities from this region. The level of unsatisfaction between the customers
increased and it has been found by the market research team that a percent of customers already
moved their account from this bank due to facing issues with the online banking portal of the
Hongkong and Shanghai Banking Corporation. This is not the only case that is faced by the
management of this financial institution of this particular business entity. 17 million users were

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locked out of their accounts for almost 9 hours in the year 2016, for which the customers went
fury about the overall system, as they were not able to log into their own accounts. Thus, it can
be said that there has been several issues with the online banking, for which the customers were
unsatisfied with their services and a segment moved to other financial institutions to successfully
use their online banking as well as the mobile application system and avoid facing any kind of
technical issues related to the online banking facility (Carey 2020).
Thus, it can be noted that issues with the online banking of the Hongkong and Shanghai
Banking Corporation has affected the personal as well as professional live of the people who are
using the accounts of this particular financial institution. A segment of passengers has moved to
other banks due to avoid these issues and enjoy a better inline banking service than that of the
Hongkong and Shanghai Banking Corporation (Khrais 2015). Recommended strategies and
actions need to be followed by the management of this financial institution to retain their existing
customers along with attracting new people, from the market place of the United Kingdom,
which will help this financial institution to gain and maintain the leading position in this
particular region along with other regions where the Hongkong and Shanghai Banking
Corporation is present.
Pros and Cons of Online Banking Method
The system of online banking possess both positive and negative effects on the banking
operations of the global financial business environment. In this context, the advantages and
disadvantages of using this system will be described here.
Advantages
The most useful advantage that is offered by using online banking is accessibility of the
account along with the services of the respective bank 24*7 basis. This helps to make or transfer

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funds in emergency situations and this helps the financial institutions who provides this services
to their customers (Khan, Rahman and Fatma 2016). Speed and efficiency also plays important
part in online banking system, where funds from one account to others are made within few
minutes, and this also helps in emergency situations. Paying the bills online, and this cashless
system helps in savings as more amount of money can be kept in the branches of the financial
institutions like the Hongkong and Shanghai Banking Corporation. If more amount is kept in
savings, more amount can be accumulated as interests, which will be again, increase the overall
savings of a person (Chavan 2013).
Disadvantages
The major disadvantage of using online banking system is facing the technical issues,
which has halted the operations of the Hongkong and Shanghai Banking Corporation and has
suffered the lives of thousands of customers (Jassal and Sehgal 2013). This hampers the brand
image of the organizations and customers tend to move to other banking institutions, which
reduces both the market share and the revenue earning for the company. Apart from this, security
issues also adversely affects the businesses of the financial institutions like this, and security
breaches leads to losing healthy amount of money has been lost from the accounts of the
customers. Inefficiency in performing complex transactions also proves to be a major drawback
of the online banking system, and as there is no relationship with the personal banker, no help
can be availed from them, mainly in the time of non-working hours. All of these are the major
setbacks of using the system of online banking methods (Khan 2017).

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Recommendations
Actions can be designed and followed by the management of the Hongkong and
Shanghai Banking Corporation, which, if followed, will help to overcome or avoid the issues that
ate related with online banking of this financial institution.
The first and foremost recommended step that need to be followed by the management of
the Hongkong and Shanghai Banking Corporation is to provide an uninterrupted payment
service, and for this, more than one server need to be used, which can help to use uninterrupted
services by the customers who are using the online banking services of this financial institution.
Though it will require more investment, but it will help to achieve long-term success for the
Hongkong and Shanghai Banking Corporation and gain the competitive advantage in the market
of the United Kingdom.
Another recommended step that need to be followed is to provide high speed service
24*7, so that faster service can be provided to the customers all the time, which will help to
increase the satisfaction level of the customers, as they will be able to provide the faster and
smoother services at any point of the day. Satisfied customers will help to attract new people to
them which will acts as word-of-mouth publicity for the Hongkong and Shanghai Banking
Corporation.
A comprehensive agreement need to be followed between the management of the bank
and their customers, which will include both specific terms fir services like person-to-person, bill
pay and account-to-account transactions and general terms for mobile and online banking
(Sikdar, Kumar and Makkad 2015). The terms and conditions that exists with the online banking
process of the Hongkong and Shanghai Banking Corporation. This will aid to clearly understand

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the terms and conditions of the online banking system and will reduce confusions in the mind of
the customers who are using this.
Conclusion
From the above discussion, it can be concluded that though there are issues with the
online banking system, it overall helps the people to able to avail different kinds of services of
the financial institutions like the Hongkong and Shanghai Banking Corporation. Recommended
steps will help to make better the services and help to satisfy the needs and wants of the people
or customers who are availing the online banking of this particular institution. It will be one of
the major duty of the management of to provide top level service to their customers and help to
retain them with the Hongkong and Shanghai Banking Corporation along with attracting new
people from the market places where they perform. The opportunities need to be utilized
efficiently so that the market share as well as the revenue earning of the company can be
increased and maintained which will help to possess more competitive advantage in the global
market place along with that of the United Kingdom, from where the Hongkong and Shanghai
Banking Corporation belongs.

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Reference
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March 2020, from https://www.theguardian.com/business/2016/jan/05/hsbc-customers-vent-fury-over-
online-banking-problems
Carey, J. (2020). HSBC down: Online banking not working again for customers - Latest server
status updates. Retrieved 6 March 2020, from https://www.express.co.uk/life-style/science-
technology/1171824/HSBC-online-banking-down-not-working-latest-server-status-updates
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