Andy Ripley, the new Dubai-based head of retail banking and wealth management at HSBC, answered the following questions posed to him by The National on consumer banking.
HSBC entered the UAE market in 1959 when it bought the British Bank of the Middle East. Is the retail banking market in the UAE overcrowded?
I think it is widely recognised that there are a large number of banks in the country, and with over 50 operators in total, we have seen the market grow increasingly competitive over the last few years. This is clearly good news for banking customers but could also lead to consolidation in the industry.
Recently we have seen a few financial services firms selling their retail banking businesses in the country and this is reflective of the degree of competition in the market but also as international banks focus their capital deployment in their home markets. This is also beneficial for the wider industry, as banks are increasingly driven to innovate and improve their services to compete for an increasingly demanding customer base.
We expect the retail banking industry to grow in line with GDP. This indicates that although the sector may be crowded, there is still significant potential for growth on the back of strong customer demand. In this regard, we have seen lending grow at a strong pace this year and the Institute of International Finance has forecasted that the banking sector’s loan growth rose from 2.6 per cent in 2012 to 7.5 per cent in 2013. Equally importantly, loan impairments are well controlled as banks have learnt the hard lessons from the financial crisis.
Therefore, consumer lending in particular is expected to be a significant contributor to growth, as figures released by the Central Bank showed that customer credit had grown more in the first half of the year than in the last two and a half years.
Dubai hosting the World Expo in 2020 will definitely have a positive impact on GDP and employment growth, and we will also see further expansion of the private sector, leading to an increase in credit growth.
What is HSBC doing to attract more retail customers and which type of customers would you prefer to concentrate on?
HSBC continues to be one of the largest and most widely represented international banks in the region and we have had an unbroken presence here for over 65 years. During this time, we have focused on developing more of a mass affluent strategy than a purely retail one, while recognising the evolving landscape of the industry and adapting our services in order to cater to the constantly developing demands of our customers, both international and local.
We see that the retail banking industry is undergoing a period of rapid change, with a shift in focus from traditional banking centres, such as branches, to more digital, secure and convenient ones, including ATMs, mobile and e-banking. To this end, branches are increasingly being transformed into centres for financial advice and for self-service functionalities, while customers are relying on digital channels more for their daily banking requirements.
We have developed one of the leading internet banking and mobile banking platforms, and a testament to their success is that we saw 12 million internet banking logons and 35,000 mobile banking app downloads in the UAE in 2013.
Is HSBC planning to open more retail banking outlets, bolster its sales staff?
We have a comprehensive network in the UAE and a call centre that serves our broad customer base adequately at the moment. We continue to enhance our digital infrastructure based on customer feedback.
This week we launched Global Transfer on mobile banking so our customers can now transfer funds to any global account using their mobile banking application. UAE is the first market in HSBC globally to launch this service and this is indicative of the great demand we see for digital solutions from our customers here.
As we continue to invest in our customer service, building our staff capabilities will be a core component of this process. Wealth Management for us is another primary area of focus. We grew our team of qualified wealth advisers from 60 last year to around a 100 in 2013 and by next year we aim to reach 125. We have a market leading financial planning tool to help ensure that we meet customer needs, and we review our customer requirements on a regular basis.
Have you found Islamic banking eating away into your retail market share?
We have seen the Islamic banking industry becoming increasingly prominent over the past few years. While this industry is expected to continue growing over the next few years, we do not necessarily see it significantly impacting our customer base.
An important factor to take into consideration is that the UAE has a significant expat segment and an internationally minded UAE nationals’ segment. A large proportion of these people rely on a bank that has a global presence. HSBC has among the largest banking networks in the world across 80 countries and we see that UAE’s transitory population will always require the services of a bank with an international scale so that they can take their wealth with them wherever they go.
By Mahmoud Kassem
Source – www.thenational.ae