HSBC and RBC to invest billions in tech

HSBC and RBC to invest billions in tech

The largest British bank HSBC unveiled its plan to invest USD 17 billion in technology to improve returns by 2020. On the other side of the Atlantic, the Royal Bank of Canada promised to invest USD 2.5 billion this year in order to provide more user-friendly digital services and improve onboarding.

HSBC’s CEO John Flynt delivered an update last Monday in front of investors and analysts, unveiling its plan to set the bank back on the growth trails. The eight-point plan, targeting the restructuring of Asian and US branches, as well as the increasing of specific markets such as the mortgage sector, is calling for customer centricity and tech investments to be the pillars of the bank’s growth strategy.

The plan is clear: after a period of restructuring, the time has now come to go into growth mode. To do so, HSBC aims to use innovation to its advantage. “We will leverage our size and strength to embrace new technologies, investing USD15-17bn primarily in growth and technology, subject to achieving positive adjusted jaws each financial year,” Flint declared during the update.

We hear this discourse in the mouth of numerous financial institutions’ executives. After JP Morgan’s USD 10 billion dedicated to tech, Canadian bank RBC announced its plan to invest USD 2.5 billion this year in technology at an investor meeting on Wednesday. The investment is meant to improve customer digital experience. This decision is indeed motivated by the frustration executives experience as not enough customers are switching to the bank’s digital offering. The same plan aims to reduce the bank’s branches by 20%.

By Jean Leguy, Research Coordinator

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