HSBC increased technology spending by $900 million in 2021 to bring it to $6 billion (19% of opex) as it continued digital transformation efforts – it says it now has 27% of workloads running in the cloud.
The bank – one of the world’s biggest, with £3 trillion in assets under management and serving over 40 million customers in 64 countries – aims to bring technology spending to 21% of opex by 2025.
HSBC CEO Noel Quinn, reporting full year profit of $14.7 billion, added “around 97% of transactions are now fully automated. For example, automated credit and lending systems processed around $15 billion”, adding that by end-2021 “15% of our total technology workforce in the global businesses and functions were aligned to at least one agile team per agile blueprint. This marks a significant improvement from 5% in 2020.”
HSBC also reported some success in increasing the use of digital channels, with corporate customers, for example, carrying out 9 million+ payments through the HSBCnet app in 2021; up 58% year-on-year.
Its increase in IT spending comes amid a widely reported cost-cutting programme that CEO Noel Quinn said "continues to progress" -- with $2.2 billion of cost savings recognised in 2021. Since the start of the programme in 2020, HSBC has delivered savings of $3.3 billionn, with costs to achieve of $3.6 billion.
The multinational is working aggressively to shrug off as much legacy software as possible -- taking an early hit in doing so -- and in July 2020 it signed a long-term deal with AWS to “drive innovation, automate key processes, and enhance operational efficiency across a range of personal financial services"; other recent technology investments include in CloudBees, a software delivery automation specialist. HSBC says it is rolling out the latter's CI/CD platform to “improve productivity” for a global army of over 23,000 developers.
HSBC meanwhile bolstered bonuses for its top investment bankers by 53% in 2021 amid a highly competitive battle for global dealmakers. It was not immediately clear if senior IT staff were also rewarded. (The industry has a reputation for still treating IT as a cost centre...) Other banking leaders have lamented the so-called "great resignation" with Standard Chartered among those losing senior digital talent.
To contextualise HSBC technology spending of $6 billion, JPMorgan is spending double that at $12 billion, Credit Suisse approximately half at a reported $3 billion.