Despite tough competition and recent financial market volatility, HSBC's head of retail banking in Hong Kong, Susanna Cheung, is optimistic about the local retail banking sector in 2008. Indeed, the bank plans to recruit more than 500 new employees for its retail banking division this year to satisfy increased customer demand for more sophisticated banking services.
At present in Hong Kong alone, HSBC serves more than four million retail customers and holds the largest deposit base. The bank also boasts the most credit cards issued, at 3.3 million, and the highest number of online banking customers, at 1.3 million.
Mrs Cheung notes however that HSBC is constantly seeking ways to better serve both its current and potential customers. In 2007 the two most popular types of retail banking services were wealth protection, such as life insurance and medical insurance, and wealth accumulation, for example funds, stocks and bonds.
"We design products to suit the needs of contemporary customers and focus on both wealth protection and wealth accumulation," Mrs Cheung says. She highlights improving living standards, low interest rates and the increasing desire for greater financial independence post-retirement as the major reasons for the sharp rise in demand for wealth management services in recent years.
Hong Kong's ageing population is also an important factor in the equation. "People all over the world are enjoying greater longevity. This coupled with lower birth rates worldwide has affected customers' retirement expectations," Mrs Cheung adds.
"Since the launch of MPF, people have become more aware of their retirement needs. At the same time, through channels such as radio talk shows and TV programmes, investors are gaining a much better understanding of wealth management concepts. Serving these discerning investors is both challenging and rewarding," she says.
"After MPF was implemented different areas of our business worked together to encourage cross referrals of customers between our retail banking, corporate banking and insurance units. It means that we can provide the best possible service for our customers, whether on a corporate or individual level," she remarks.
HSBC's retail banking division currently employs more than 4,500 staff, of which 1,200 offer wealth management services. "Unlike 10 years ago, when customers would come to bank branches primarily to make deposits or apply for credit cards, customers now approach us for advice on how to protect their assets, or for help with wealth accumulation," she notes.
For example, HSBC has recently launched a medical insurance scheme called LifeSave protection plan (Lifetime Medical), which enables people to plan in advance for extra lifelong medical protection. This product is based on an HSBC study which revealed that 43 per cent of people in Hong Kong foresee their current medical protection will be insufficient for their retirement needs. The key feature of this new plan is that it allows customers to supplement their existing medical coverage, paying the entire premium before they reach retirement age. HSBC has also recently launched a new unit trust product with no subscription fee — the first local bank to offer such a pricing structure.
To prepare for the anticipated increasing demand for wealth management services, HSBC began training its staff in broad wealth management knowledge eight years ago. Since then the bank's HSBC premier relationship managers have been offering high net worth customers a wide range of advisory services. "Sometimes customers might not fully realise the complete extent of their needs so a wealth management professional must take time to understand the customer, analyse his or her needs and explain the best options carefully and clearly. Experience and communication skills are key to maintaining a trusting relationship with customers," she advises.
"Our goal is for customers to enjoy a consistent level of service, irrespective of the branch they visit," Mrs Cheung stresses. To achieve this, wealth management professionals need excellent time management and presentation skills. It's also important to have an understanding of customer psychology because people have different needs at different stages of their life.
In order to ensure high professional standards are rigorously upheld, HSBC encourages staff to further their studies, offering subsidises for professional qualifications.
HSBC's wealth management professionals are on a salary package, unlike the commission-based pay structures widely adopted by insurance companies and independent financial advisories. Mrs Cheung points out that the bank offers its staff more than just monetary rewards. "What we offer on top of the salary package includes also career development, quarterly bonuses and various awards in recognition of outstanding performance," she says.