Personal Financial Services of Hongkong Shanghai Banking Corporation, Bangladesh Chapter-1 Introduction 1.1. Origin of the Study This internship report was assigned as a part of the academic requirement in order to complete ‘Bachelor of Business Administration’ program under the ‘Department of Management Studies’ at University of Dhaka. To support my internship report, I worked as an intern in ‘The Hongkong and Shanghai Banking Corporation Limited’. And I was consigned to help the officers of the Personal Financial Service of HSBC, Motijheel Branch as part of the fulfillment of Internship requirement. 1.2. Objective of the Study The objective of this report is to describe the section as well as the organization where I was placed as an Intern. This includes an overview of the organization, structures, personal financial services as well as products and services offered by the bank. In addition to that, this report also aims to shed some light on the overall performance of the personal financial services of HSBC, Bangladesh. 1.3. Scopes of the Study The scope of this report is to cover the organization, its structure, operational activities in Bangladesh, various products and services offered by the bank, personal financial services and customers’ feedback regarding their service, analysis of survey which are made from questionnaire, SWOT analysis of HSBC. 1.4. Data Collection Methodology Sources of Information Primary data I have collected primary information by interviewing employees, managers by the process assigned by HSBC, observing various organizational procedures, structures, directly communicating with the customers. Primary data were mostly derived from the discussion with the employees & through surveys on customers of the organization. I have also prepared a questionnaire for the customers of HSBC. Secondary data I have elaborated different types of secondary data in my report. Sources of secondary information can be defined as follows: •
Internal Sources •
Group Business Principal manual
•
•
Prior research report
•
Any information regarding the Banking sector
External Sources •
Booklets and brochures published by the Bank.
•
Website
•
Newspapers
1.5. Limitations of the Study •
Time frame for the report was very limited.
•
Limited access to data.
•
All customers are not response positively while collecting information from them.
•
In most cases, adequate, exact and updated facts and figures have not been available due to incorporation of the interviewees.
2.1. The Hongkong and Shanghai Banking Corporation Limited The Hongkong and Shanghai Banking Corporation Limited (HSBC) is one of the largest international banks, which divided its operations into four regions globally. These four regions are as ‘America’, ‘Asia Pacific’, ‘Europe’, and ‘Middle East and Africa’. It has around 10,000 offices in 83 countries across the globe. In each of these regions HSBC is mixing its international culture with the local culture and subcultures very much successfully and becomes an important financial institution of their economic system. ‘The World’s Local Bank’ is the slogan of HSBC; which is supporting their global (Globally Local) policy very much successfully. HSBC plays a vital role in linking the world’s developed economies with the emerging markets like Bangladesh and provides personal banking, corporate banking, treasury, institutional banking, consumer finance and custodial services. The mission of the bank is to provide the most efficient, consistent, and timely services to the customers and to be the bank of choice in its operated regions. HSBC- At a glance Founded Hong Kong (1865) Founder(s) Thomas Sutherland Headquarters 8 Canada Square, London, England, UK Industry Finance and insurance Revenue US$ 142.049 billion (2008) Operating income US$ 5.728 billion (2008) Net income US$ 3.541 billion (2008) In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine. Not known for marked fluctuations in securities exchanges around the world relative to its rivals, HSBC is
a better known in banking circle for its conservative and risk-averse approach in its business operations a company tradition going back to the 19th century.The HSBC Group has a significant presence in each of the world's major financial markets, with the Americas, Asia Pacific and Europe each representing around one third of the business. With 9,500 offices in 86 countries, 210,000 shareholders, 330,000 staff and 128 million customers worldwide, HSBC arguably has the most international presence among the world's multinational banking giants. HSBC is by far the largest bank both in the United Kingdom and in Hong Kong and prints most of Hong Kong's local currency in its own name. Since the end of 2005, HSBC has been rated the largest banking group in the world by Tier 1 capital. 2.2. The Hongkong and Shanghai Banking Corporation Limited: Geographic Areas The Hongkong and Shanghai Banking Corporation is operating in 83 countries to various extents. At this moment, HSBC has around 10,000 offices in those 83 countries. All these countries are grouped into 4 regions based on their location and business core focuses. Some of the core business countries of these four regions are as: 1. America: The principle countries of this region are as: U.S.A., Brazil, Argentina, Mexico, Canada, Paraguay, Colombia, Peru, Bermuda, etc. 2. Europe: The core business countries of this region are as: U.K., France, Italy, Switzerland, Turkey, Germany, Malta, etc. 3. Asia Pacific: The main business countries of this region of HSBC are as: Hong Kong, China, Australia, India, Indonesia, Malaysia, Singapore, Bangladesh, South Korea, Taiwan, Thailand, etc. 4. Middle East and Africa: The major banking business countries of this region are as: Egypt, Saudi Arabia- in this country it is known as ‘The Saudi Arabia British Bank’ (SABB), Qatar, U.A.E., etc. Along with the mentioned names, HSBC is doing its banking business in some other countries of these four regions. 2.3. HSBC Value •
Valuing People
•
Quality First
•
Professionalism
•
Profit Driven
•
Innovative
These values are pursued by-
•
Valuing both staffs and customers to attain organization’s goal.
•
Providing effective and efficient services to customers that would be labeled as ‘value for money’.
•
Making sure that staffs know what are expected from them.
•
Enduring profitability of the Bank.
•
Being flexible enough to change according to demand.
•
Ensuring moral uprightness.
2.4. The Hongkong and Shanghai Banking Corporation Limited, Bangladesh In Bangladesh, The Hongkong and Shanghai Banking Corporation Limited (HSBC) obtained license from the ‘Bangladesh Bank’ on 17 th April 1996 to start their operations in the country. On the 3 rd December of that same year, HSBC has launched their formal banking operations through opening a branch at Dhaka. The HSBC bank represents the HSBC group in Bangladesh, which is known as the ‘HSBC Holdings plc.’ The HSBC bank is one of the newest banks of Bangladesh; in fact, it has been doing business just over 12 years in the country. However, in this short period of time, it has already made a significant impact on the economic, financial, and social system of Bangladesh. Being one of the largest international banks, HSBC link Bangladesh with the developed economies of the world. With its long-term commitment, HSBC finance many large, medium and small companies as well as numerous individuals of our country. HSBC dreams of better Bangladesh; where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives a worth living. To make its dream true, HSBC Sponsored a number of cultural, charitable, and educational projects of Bangladesh. HSBC
HSBC starts its banking business with only Bangladesh one branch in Bangladesh; which is expended to the network of nine branches, including one ‘Offshore’ banking unit, at this moment. These nine branches are located in three big cities namely Dhaka, Chittagong, Sylhet of Bangladesh and each branch has a separate customer services department from where customers get value added services. HSBC also has Major Business Units
Supporting Units
a separate ‘Call Centre’ and ‘Phone Banking’ division to provide the customers efficient and timely services around the clock. Moreover, HSBC has a dedicated sales force, both for personal and corporate banking businesses, to sell different products and services to customers directly. Consumer BankingofDivision 2.5. Divisions HSBC, Bangladesh Personal Financial Services Corporate/ Business Banking Group Treasury Division Clearing and Collection Division Custodial Services
Human Resources IT Department Central Operations Legal and Compliance External Affairs Supporting Staff Division
Figure 1: Divisions of HSBC, Bangladesh
Figure 1: Divisional Structure of HSBC, Motijheel Branch 2.6. Structure of HSBC, Motijheel Branch In Bangladesh, the structures of all the branches of HSBC are similar. Graphically, the structure of HSBC, Motijheel Branch looks as follows: Branch Manager
Customer Services Manager (Front)
Customer Services Officer (Front)
Customer Services Officer (Front)
Customer Services Manager (Cash & NonCash)
Customer Services Officer/ Chief Teller (Cash)
Customer Services Officer (NonCash)
Sales Manager
Sales TeamLeader
Sales TeamLeader
Figure 2: Organizational Structure of HSBC, Motijheel Branch Customer Services Officer (Cash)
Customer Services Officer (Cash)
Sales Officer
Sales Officer
In this organizational chart, we can see that, the total activities of customer services department are divided into two parts. These two parts are customer services department (Front) and customer services department (cash/non-cash). The two separate customer services managers are the head of these two divisions; who are reporting directly to the branch manager. 2.7. Structure of the Customer Services Department of HSBC, Motijheel Branch The Customer Services Department is the face of the bank, because customers are getting all of the banking services through this department. So, this department must be very much efficient and punctual at their works for the overall growth of HSBC. Therefore, considering all these factors, HSBC has designed the hierarchy or structure of this core department very much carefully. Graphically, the structure of the CSD of HSBC, Motijheel Branch looks as follows: Branch Manager
Customer Services Manager of Customer Services Section (Front)
Customer Services Officer for General Customers
Customer Services Manager of Cash and NonCash Section (Back)
Customer Services Officer for Corporate Customers
Relationship Officer for Power Vantage Account Holders
Customer Services Officer for Cash Counters (Chief Teller)
Customer Services Officer for Cash Counters (Teller)
Customer Services Officer for NonCash Counters
Customer Services Officer for Cash Counters (Teller)
Figure 3: The Structure of CSD of HSBC, Motijheel Branch 2.8. Different Business Areas of HSBC, Bangladesh
There are mainly three major business areas where the bank is performing with constant high reputation. These areas are: 1. Personal Banking 2. Corporate/ Business Banking a. Capital Raising b. Cash management Services c. Custodial Services d. Trade Banking 3. Global Treasury 3.1. Personal Banking Products The Personal Banking division of the bank mainly deals with individuals as customers. The major role of this division is to provide need based and planned financial services to the individuals. HSBC, Bangladesh; as well as to different extent through out the world provides the following categories of products: Service Products 1. Cheque Collection 2. Debit Cards (ATM) 3. Foreign Demand Drafts 4. Foreign Telegraphic Transfer 5. Local Cashier Order 6. Local Telegraphic Transfer 7. Telephone Banking 8. Electronic Fund Transfer Deposit Products 1. Savings Accounts 2. Power Vantage Savings Accounts 3. HSBC ‘Select’ Savings Accounts 4. Corporate Salary Accounts 5. Savings Plus 6. Current Accounts 7. Access Accounts 8. Monthly Interest Bearing Time Deposit
Foreign Currency Services 1. Sell and Encashment of ‘AMEX’ Travelers Cheque 2. Foreign Currency Endorsement on Passport 3. Foreign Currency Encashment 4. Foreign Currency Cheque Collection 5. Collection of Inward Remittances 6. US Dollar Bond (USDB) Loan Products 1. Personal Installment Loan 2. Personal Secured Loan 3. Home Loan 4. Home Equity Loan 5. Car Loan 6. Marriage Loan 7. Life Style Loan 3.2. Corporate/ Business Banking In this section, HSBC provides services to many companies of Bangladesh as well as to different extent throughout the world. Under this section HSBC has four areas of activities: 1. Capital Raising 2. Cash Management Services 3. Custodial Services 4. Trade Banking These services are delivered through completely separate sales teams, known as ‘Business Banking Sales Force’; who are specialized in meeting the needs of a wide range of corporate customers from multinational businesses to small national businesses. Most of these companies have employees’ salaries accounts with HSBC; by which they are giving salaries to their employees. These mentioned and along with other value added services, HSBC is servicing its corporate clients very much effectively and efficiently. In the following sections, I am discussing each of the Corporate/ Business Banking services of HSBC in detail: 3.2.1. Capital Rising
The services, provided under this particular segment, are designed to suit the characteristics of the country’s economy. When the purpose is Capital Rising, HSBC offers the following facilities to its clients: a. Loan Syndication b. Limited Resource Financing c. Co-financing schemes from export credit agencies, credit schemes d. Derivative Linked Financing e. Equity Related Fund Raising f.
Secondary Market Equity Placement
g. Raising Development Capital prior to Stock Exchange Listing And, also in case of Corporate Financing, HSBC furnishes: i.
Advisory role for acquisition, disposal and joint venture
ii.
Advisory role for corporate restructuring and recovery
3.2.2. Cash Management Services As the name suggests this type of services deals with day to day cash transactions, salaries etc. of the multinational and small businesses. Under this segment, the following services are provided by HSBC: (1) Payment Services (2) Payment of Salaries (3) Collection Services (4) Account Services (5) Enhance Information Management (6) Liquidity Management 3.2.3. Custodial Services The following services are provided by HSBC to its corporate clients, under this segment: a. Securities Custody & Clearing b. Debt Securities Custody & Clearing c. Securities Lending 3.2.4. Trade Banking In this segment, HSBC serves a comprehensive range of traditional products to its corporate clients; such as: a. Issuance, advise, confirmations and negotiations of ‘Letter of Credits’ b. Purchasing/ discounting of ‘Bill of Exchange’ c. Payment and collection of import and export bills
d. Export and import financing e. Bonds and guarantees 3.3. Global Treasury This is a principle division, put into action, in order to enable HSBC compliant with the open economic movement throughout the world. The treasury division generally provides the following services: a. Foreign Exchange: Setting exchange rate, spot/ forward exchange, foreign exchange options. b. Market Research and Analysis: Treasury economic units, technical analysis. c. Asset and Liability Management: Short term loan/ deposits, interest rate/ liquidity management d. Interest Rate and Trading: Money market securities, Government debt securities and future. 3.4. Different Services Provided by Personal Banking Division The Hongkong and Shanghai Banking Corporation (HSBC) commenced its business in Bangladesh in 1996, opening its first branch in the capital city of Dhaka. The bank increasingly invested in people, technology, and premises as its business grew in relation to the country’s thriving economy. In very short period of time, HSBC has become the second largest foreign commercial bank of Bangladesh by serving customers with its unique global structure. At this moment, the bank has 8 branches throughout the country, 5 of which is in Dhaka and rest other located in Chittagong and Sylhet. The bank has another office in Dhaka, which is known as the ‘Network Support Centre’ or NSC. It is mainly a back office, which is performing the entire back office job; such as processing ATM cards and PINs, preparing other banks Cheque for clearing and collection, making foreign drafts, processing corporate client’s salaries, communicating with the Bangladesh Bank for collecting and sending foreign remittances etc. So, this back office is supporting the total banking network to perform their jobs efficiently and timely manner. HSBC offers premium retail banking service to individual customers with a large variety of deposit and loan products, which I mentioned earlier. Its Personal Banking Division continuously meets the challenges of developing new products and services to match the specific requirements of the customers. In Bangladesh, HSBC offers 24-hour services through its ATM network and Phone Banking. To enhance customers’ convenience HSBC has opened some off site ATM booths in Dhaka and Chittagong. It is also engaged in the process of building network of off-site ATM booths in Bangladesh. Its aim is to offer world-class services on a 24-hour basis. HSBC also inaugurated the concept of ‘Select Banking’, a symbol of exclusive privileges, concept in Bangladesh. Recently, HSBC also launched another segment of priority banking, which is called ‘Power Vantage Account’ with the slogan “Experience the Difference”.
The following Services are available in ‘Personal Banking Division’: 1. Savings A/C Minimum opening balance required in BDT 50,000.00. If quarterly average balance is in between BDT 50,000.00-1,000,000.00, then interest rate will be 3.75%. A 4% interest will be offered if the monthly balance is more than BDT 1,000,000.00. And quarterly balance of less than BDT 50,000.00; a charge of BDT 402.50 will be deducted from the account. 2. Select Account Minimum opening balance required in BDT 4,000,000.00. This is the most posh customer segment of HSBC, Bangladesh. A totally separated ‘Relationship Officer’ (RO) is dedicated at their service. Moreover, they get all the banking services at the priority basis. 3. Power Vantage Account Recently, by redefining the ‘Premier Segment’, HSBC, Bangladesh has introduced a completely new segment; which is called “Power Vantage Account”. Minimum opening balance required in BDT 1,000,000.00. If a customer unable to maintain an average monthly balance of BDT 1,000,000.00; then a charge of BDT 230.00 will be deducted from his or her account. The customer of this segment is getting the following facilities: a. Overdraft facility up to BDT 50,000.00. b. Preferential interest rate and discount for loan products. c. Free personal accident insurance coverage. d. Standing Instruction for auto-sweep of funds between account holder savings and current accounts. 4. Current A/C Minimum opening amount is BDT 1,000,000.00. 5. Non-Resident Foreign Currency Deposit (NFCD) Non-resident Bangladeshi can open this account within one month of their arrival. The minimum balance is USD 1,000.00 or equivalent GBP/ EURO for current account. There is no maximum limit if the account holder can obtain a clearance from the customs to bring in foreign currency if it’s more than USD 5,000.00 or equivalent GBP/ EURO. 6. Resident Foreign Currency Deposit (RFCD) Account Resident in Bangladesh also may open foreign currency account on their entry/ return (within one month) from abroad with unspent foreign currency, which could be in USD or GBP or Euro. 7. Monthly interest bearing time deposit
Minimum deposit balance required in BDT 500,000.00. Better interest rate than normal savings account and monthly interest will be automatically transferred to another nominated account. A free ATM Card will be supplied for that nominated account. 8. 24-hour ATM Access The bank teller in your pocket, as HSBC called its ATM services. It allows 24-hour cash access, 365 days a year through ATMs. With the ATM service of HSBC, one can withdraw money, deposit money and other bank clearing Cheque. The local currency account holders get all of these services at free of cost. 9. Easy Pay Machine It is a special type of machine, in which one can pay monthly utility bills. The local HSBC account holders can send request of their account statement, changing the address maintained with the bank, request of new Cheque book etc. 10. 24-hour Phone Banking Access Bring banking within the dialing distance of customers, providing access to account information and details, 24-hour a day, 7 days a week, 52 weeks a year from the privacy and comfort of their homes, offices and cars. The following services are available through the phone banking service of HSBC: a. Check the available balance of primary and linked accounts. b. Transfer money between ones savings and current accounts. c. Get the details of ones last five transactions. d. Request for account statement and chequebook. e. Lost or stolen report of an ATM Card. f.
Hear the foreign currency exchange rate.
11. International Remittance Solid international network provides an excellent remittance service virtually anywhere in the world. With the help of the SWIFT code one easily send money to his or her relatives in Bangladesh. In fact, it will take only 48 hours to remitted money from London to Bangladesh through the HSBC network. 12. Call Centre
HSBC is one of the early banks of Bangladesh, which introduced call centre services to this financial industry. The account holders can get a very useful range of services from the call centre. 4. Customer Services Department In the service industry, the customer services department is a very important part of any organization. More importantly, in the banking business, this department can create a differential image of the bank. Because, this department not only keep and maintain the current customer base; but also attracting the attention of potential customers by providing value added services. In Bangladesh, The Hongkong and Shanghai Banking Corporation Limited has started their banking business back in 1996 by opening only one branch at Dhaka. With this start, HSBC brought two new things in the banking industry of Bangladesh and these are: •
Customer Services Department
•
Online Banking Services
At present, HSBC is the second largest foreign commercial bank of Bangladesh. Both of these, Customer Services Department and Online Banking Services, are contributing very much significantly to make HSBC the second largest foreign commercial bank of Bangladesh in this very short period of time. Because, prior to that both customer services department and on-line banking services are completely ignored by the banks of Bangladesh. By providing both of these facilities, HSBC has introduced a totally new banking era for the banking industry of Bangladesh. At this moment, HSBC is one of the leading on-line banks of Bangladesh. The Customer Services Department is fully maximizing this on-line facility to provide value added and differential services to their customers. A customer can really banking with HSBC from anywhere and anytime The various customer services activities performed by the Customer Services Department of HSBC is Cash Servicesclassified into two categories. These two categories are Cash and non-cash services and other customer • Deposit Money services. • Withdraw Money • Electronic Fund Transfer
l
Non-Cash ServicesCustomer Service • Receiving other banks A/C Pay Cheque for clearing or collection • Electronic fund transfer between HSBC accounts • Preparing local Cashier Order
•
Sending instruction of Telegraphic Transfer. Cash and Non-Cash Services
local
• • • • • •
Helping Customers to open accounts with HSBC, Bangladesh. Delivery of HSBC ATM Cards and PINs. Delivery of Credit Cards. Processing different Government Securities (Bonds).Services Other Customer Providing Bank Certificate. Solutions to different customer queries.
Figure 4: Categories of Customer Services of HSBC I have prepared a questionnaire from the customers of personal financial services under customer service department. Here are the graphs and analysis which are made from questionnaire. Graphs and analysis from Questionnaire 4.1. Gender Distribution of the HSBC customers who were surveyed
Gender Female Male
53
47
Figure 5: Gender Distribution of the HSBC Customers Who Were Surveyed Valid Frequency
Percent
Percent
Cumulative Percent
Valid
Female Male Total
14 16 30
46.7 53.3 100.0
46.7 53.3 100.0
46.7 100.0
Table 1: Gender Distribution of the HSBC Customers Who Were Surveyed I surveyed 30 customers of which 46.7% were females and 5.3% were males. This can be explained through various spheres. Number one, being that there has been an increasing number of women literacy. More women are now found in the work field with their male co-workers. Hence, they need banking facilities. 4.2. Age distribution of the customers
50 40
t n e30 c re P20 10 0 19-28
29-38
39-48
49-58
>59
Customer's Age Figure 6: Age Distribution of the Customers
Valid
19-28 29-38 39-48 49-58 >59
Frequency 8 13 5 2 2
Percent 26.7 43.3 16.7 6.7 6.7
Valid
Cumulative
Percent 26.7 43.3 16.7 6.7 6.7
Percent 26.7 70.0 86.7 93.3 100.0
Total
30
100.0
100.0
Table 2: Age Distribution of the Customers Majority of the customers I surveyed fell in the age group of 29 to 38 years. Next were from 19 to 28 years old, the rest being insignificant. This can portray many things of which is younger customers tend to bank more than the elder ones. 4.3. Distribution of profession of the customers
70 60 50
t n e 40 c r e 30 P
20 10 0 Businessman Housewife Employee Student
Profession Figure 7: Distribution of Profession of the Customers
Frequency Percent Businessman 6 20.0 Employee 20 66.7 Housewife 2 6.7 Student 2 6.7 Total 30 100.0 Table 3: Distribution of Profession of the Customers Valid
Valid
Cumulative
Percent 20.0 66.7 6.7 6.7 100.0
Percent 20.0 86.7 93.3 100.0
As we can see that majority of the customers fall under the category of employees and businessmen compared to the unemployed category (students and housewives). This makes sense as it is evident that banking is more important for those who are engaged in the daily transactions more. 4.4. Education Level of the Customers
54 52
t n e c r 50 e P 48 46 Postgraduate
Undergraduate
Education Level Figure 8: Education Level of the Customers Valid Valid
Postgraduate Undergraduate Total
Frequency 14 16 30
Percent 46.7 53.3 100.0
Percent 46.7 53.3 100.0
Cumulative Percent 46.7 100.0
Table 4: Education Level of the Customers The difference is not worth while though, but it should be mentioned that in Bangladesh HSBC, the trend is that the customers are seen to have undergraduate degrees compared to postgraduate degrees. This also confirms that none of the customers I surveyed are illiterate or educated of below standards. 4.5. Distribution of Residence of the Customers
Valid
Khilgaon Rampura Kakrail Others Motijheel Total
Frequency 8 4 11 3 4 30
Table 5: Distribution of the Residence of the Customers
Percent 26.7 13.3 36.7 10.0 13.3 100.0
Valid Percent 26.7 13.3 36.7 10.0 13.3 100.0
4.6. Number of years with HSBC
3 <1
10
1-3
13
17
4-6
13
7-9
47
Figure 9: Number of Years with HSBC
Valid
<1 1-3 4-6 7-9 Total
Frequency 4 14 8 4 30
Percent 13.3 46.7 26.7 13.3 100.0
Valid Percent 13.3 46.7 26.7 13.3 100.0
Cumulative Percent 13.3 60.0 86.7 100.0
Table 6: Distribution of the Number of Years the Customers are with HSBC I thought the number of years a customer banks in HSBC might reveal or relate with a lot of the other variables in the questionnaire. It is seen that majority of the customers have been banking with HSBC for 1-3 years and the next in the table is 4 to 6 years. It is same amount of customers less than one year and from 7-9 years. There can be several explanations for this. 4.7. Distribution of the customer if they maintain accounts with other banks
Valid
Yes No Total
Frequency 18 12 30
Percent 60.0 40.0 100.0
Valid
Cumulative
Percent 60.0 40.0 100.0
Percent 60.0 100.0
Table 7: Frequency distribution of the customer if they maintain accounts with other banks
This is another important component for the base of customer knowledge. It can be assumed that if customers have accounts with other banks, they are likely to be well informed about the current services available in the market at their due prices with benefits. 4.8. Customers Maintain Accounts With Which Other Banks
50 40 30 t n c r e P
50.0% 20 10
22.22% 11.11%
0 SCB BRAC DBBLOthers
Figure 10: Customers Maintain Accounts with Which Other Banks Valid
Cumulative
Frequency Percent Percent Percent Valid SCB 9 30.0 50.0 50.0 BRAC 4 13.3 22.2 72.2 DBBL 3 10.0 16.7 88.9 Others 2 6.7 11.1 100.0 Total 18 60.0 100.0 Missing System 12 40.0 Total 30 100.0 Table 8: Customer Maintain Accounts with Which Other Banks Customers who maintain accounts with other banks mostly bank with SCB. The rest insignificant ones bank with BRAC and DBBL. This shows a rising trend of the Bangladeshi investors and borrowers to invest and save in multinational banks. This can result due to the vulnerable political commotion in the country, social prestige, etc. This can also pose a fierce competition amongst the two big giants. 4.9. Employee Accounts amongst the Customers
60 50 40 30
t n rc e P
60.0%
20
40.0%
10 0 Yes
No
The account with HSBC if Emlpoyee Account or not
Figure 11: Percentage of Employee Accounts amongst the Customers
Valid
Yes No Total
Frequency 12 18 30
Percent 40.0 60.0 100.0
Valid
Cumulative
Percent 40.0 60.0 100.0
Percent 40.0 100.0
Table 9: Frequencies of Employee Accounts amongst the Customers Many companies pay their salary through banks. HSBC also has the option and name the accounts as employee accounts. When the employee changes the job, s/he can just change the address and maintain the same account with HSBC. Around 40% of the customers I surveyed were employee accounts 4.10. Customer Ratings on HSBC's Services 4.11. Figure 12: Customer ratings on HSBC
Valid
Excellent Good Neither good nor bad Total
Valid
Cumulative
Frequency 4 19
Percent 13.3 63.3
Percent 13.3 63.3
Percent 13.3 76.7
7
23.3
23.3
100.0
30
100.0
100.0
Table 10: Frequency Distribution of Customer Ratings on HSBC's Services This question directly asks how the customers would rate HSBCâ&#x20AC;&#x2122;s services. Maximum customers agreed that they think the service of HSBC is good. Although there are a significant number of customers saying that they are not sure and think the service is neither good nor bad. 4.11. Type of Accounts Customer Maintains in HSBC
Local Currency Current Account Local Currency Savings Account
17
20 3
Company Account
60
Foreign Currency Current Account
Figure 13: Type of Accounts Customer Maintains in HSBC Cumulative Valid
Local Currency Current Account Local Currency Savings
Frequency
Percent
Valid Percent
Percent
5
16.7
16.7
16.7
60.0
60.0
76.7
3.3
3.3
80.0
20.0
20.0
100.0
100.0
100.0
18 Account Company Account 1 Foreign Currency 6 Current Account Total 30
Table 11: Type of Accounts Customers Maintained in HSBC The type of account most popular in HSBC is Local currency savings account. Next, nearly one third of the Local currency savings account is the current account (both local and foreign currency ones). Company account also accounts in this table but it grabs only a small part of the pie. 4.12. Amount Maintained in the Accounts
30 25 20
t n c r e P
15
30.0%
30.0%
30.0%
500150000
50001200000
>200001
10 5
10.0%
0 10005000
Average amount of BDT maintained in HSBC Figure 14: Amount Maintained in the Accounts
Valid
10005000 500150000 50001200000 >200001 Total
Valid
Cumulative
Frequency
Percent
Percent
Percent
3
10.0
10.0
10.0
9
30.0
30.0
40.0
9
30.0
30.0
70.0
9 30
30.0 100.0
30.0 100.0
100.0
Table 12: Amount Maintained in the Accounts This question is very crucial as well in determining which customers are more satisfied. I kept this question in order to find relation with other variables and draw conclusions. It can been seen that around 90% of the customers surveyed keeps from BDT 5001.00 to over 200,000.00 on an average. Only 10 percent maintains from BDT 1000.00 to 5000.00. 4.13. ATM Card Used by the Customers
Yes No 3
97
Figure 15: ATM Card Used by the Customers Valid
Cumulative
Frequency Percent Percent Valid Yes 29 96.7 96.7 No 1 3.3 3.3 Total 30 100.0 100.0 Table 13: ATM Card Used by the Customers
Percent 96.7 100.0
Almost 97% of the customers maintain ATM Card with HSBC. This can tell a little bit about the recent trend towards Bangladeshi Fast Life. The movement towards modern living leads to use ATM Cards and move away from traditional banking. The faster the country will adopt the fruits of modernization the faster the standard of living will increase leading to a rapid economic growth.
t n c r e P
4.14. How Frequent the Card is used
70 60 50 40 30 20 10 0
66.67%
3.33%
13.33%
Y T Q M W Frequency of ATM Card used
Figure 16: How Frequent the Card is used
Frequency
Percent
Valid
Cumulative
Percent
Percent
Valid Quarterly Twice a year Once a month Every week Total
1 4 1 4 20 30
3.3 13.3 3.3 13.3 66.7 100.0
3.3 13.3 3.3 13.3 66.7 100.0
3.3 16.7 20.0 33.3 100.0
Table 14: How Frequent the Card is used Only querying about the ATM card if used or not really does not give much of a meaning. It is up to the frequency of the card used that will help open the window and give meaning to it. From this question I can be seen that almost all the customers use the card o a weekly basis. This can reflect that a huge portion of the services consumed by the customers fall under ATM. Faults in the machines can be a part of the dissatisfaction amongst the consumers. 4.15. Extent to Which CS Employees performs the Right Service at the First Time 50
40
t n c r e P
30
20
10
0 Strongly Agree
Moderately Agree
Neither agree nor Disagree
Moderately Disagree
Perform the right service at the first time
Figure 17: The Extent to Which CS Employees perform the Right Service at the First Time
Valid
Strongly Agree Moderately Agree Neither agree nor Disagree Moderately Disagree Total
Valid
Cumulative
Frequency 6 13
Percent 20.0 43.3
Percent 20.0 43.3
Percent 20.0 63.3
7
23.3
23.3
86.7
4
13.3
13.3
100.0
30
100.0
100.0
Table 15: The Extent to Which CS Employees perform the Right Service at the First Time In every service it is extremely important to perform the right service at the first time. This can be explained through many dimensions. To begin with, performing the service right the first time eliminates the chance of making errors the first time. Customers are not irritated. Secondly, it is less time consuming. Less time is needed to spend after each customer. 5.1. Performance Evaluation Personal financial service is a very important section of HSBC, Bangladesh. The bank is providing all the services through this department to its customers. Therefore, efficient performance of this department is very important for the bank. And so far, this department is performing quite well and also helping the bank to create differential image in the minds of customers. There are no standard or fixed methods to measure the performance of Personal financial service. Moreover, the performance of this department depends on so many factors; such as back office job processing, supporting staffs’ performance, time etc. Therefore, it is very hard to evaluate the performance of this department. In the following section, I am trying my best to present some important information about the performance of the personal financial service under customer service department of HSBC, Bangladesh. 5.1.1. Percentage of Customers for Different Sections of CSD In an average, everyday almost 700 hundred people (including present customers and potential customers) come to HSBC, Motijheel Branch to get different services from the bank. The ‘Cash Counters’ and ‘Non-Cash Counters’ are servicing most of them; however, all potential customers are referred to the customer services’ front desk to satisfy their initial needs. In the following table, I am presenting the average percentage of customers are being served by the different section of the personal financial service under Customer Services Department. Section Cash Non-Cash Front Desk
Percentage of Customers 55% 15% 30%
Table 16: Percentage of customers served by the each Section of CSD
So, most of the customers are being served by the ‘Cash’ section of the Customer Services Department. About 30% of total daily customers are getting different services from the front desk of CSD. An average of 15% customers comes to non-cash section, but only one CSO is serving the entire group of customers. 5.1.2. Percentage of the Account Holders and Bearers All the customers come to the branch can be categorized into two groups. These are: ‘Account Holders’ and ‘Representative of Account Holders’ or ‘Bearer’. The following figure will show the percentage of ‘Account Holders’ and ‘Bearer’ among the daily visited customers. Account Holder, 40%
Bearer, 60%
Figure 1: Percentage of Account Holders and Bearers of Daily Customers The above figure shows that, only 40% account holders come to the branch to do their banking jobs, whereas 60% of the total daily customers are the representative of the account holders. Most of the bearers are being served by the ‘Cash’ and ‘Non-Cash’ section of the CSD. 5.2. The overall performance of Personal Financial Service, Motijheel Branch Customer Satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a balance scorecard. Customer satisfaction is an ambitious and abstract manifestation of the state of satisfaction will vary from person to person and product and service to product and service. In the following table, I am presenting the percentage of a given day’s satisfactory and unsatisfactory customers. Note that, these data are collected by applying only the observational method from the Motijheel Branch of HSBC, Bangladesh. So, it is not the overall performance of the Personal Financial Service of HSBC, Bangladesh. Section CSD (Front) CSD (Back) Cash Non-Cash
Percentage of Satisfactory Customers 95%
Percentage of unsatisfactory Customers 5%
90% 95%
10% 5%
Table 17: A List of Average Customer Satisfaction level of HSBC, Motijheel Branch We can say that, based on the above discussion and information presented on the table, the overall performance of the Customer Services Department of HSBC, Motijheel Branch, is very much satisfactory. In fact, almost 95% of daily visited customers are happy with the services of this department. 5.3. Unsatisfactory Customer: Reasons Behind it In the ‘Table 5.2’, we can see around 5% customers are not satisfied by the services of the Customer Services Department; mainly because of some miscellaneous factors. Though, these are small problems; but it can create big problems for the bank. With the help of the following figure, I am presenting the name of these problems as well as comparison between those problems. Note that, these data are collected by applying only the observational method from the Motijheel Branch of HSBC, Bangladesh.
35% 30% 25% 20% 15% 10% 5%
Shrotage of Counters Performance of CSR Performance of Support Staff Other Factors
0%
Figure 18: Various unsatisfactory reasons of Customers The above figure shows us that, almost 35% customers are not happy with the performance of the Customer Services Department of HSBC, Motijheel Branch for ‘Other Factors’ category. Some of the major problems of this category are as shortage of sitting arrangements, no wash-room facility, etc. Almost 30% customers are complaining about the shortage of service counters, 20% are not satisfied with performance of the Customer Services Representative, and 15% are unhappy with the performance of the support staff. The Management of HSBC, Bangladesh should take care about these problems to do business more successfully. 5.5. SWOT Analysis of CSD of HSBC, Motijheel Branch As we know, SWOT stands for: S = Strengths
W = Weaknesses O = Opportunities T = Threats This analysis is used by the business executives to dialysis the status of a given brand or company. It enables the executives not only to find out the strength or stronger side of a particular brand but also find out the weaker side. At the same time, it also helps to prepare a plan to maximize the upcoming opportunities as well as warns about the future challenges. Here, I am using this analysis to show the strength, weakness, opportunities, and threats of the PFS of HSBC in comparison with the other leading private commercial, both the foreign and local, banks of our country. Note that, this SWOT analysis is solely based on the personal financial service of HSBC, Motijheel Branch.
Strength A team of dedicated and well trained CSO. Truly on-line facility. Available back-up staff for CSD. Flexible and friendly environment for the customer. Strong internal mailing system. 24X7 Phone Banking facility.
Weakness Limited number of customer services counter. Shortage of sitting arrangement for waiting customers. No ‘Wash-Room’ facility for customers. Only one ATM machine for a branch. Almost no service for foreign HSBC customers.
Opportunities ‘Internet Banking’ for local customers. SMS Banking. Introducing own branded credit cards. Launching a limited number services for foreign HSBC customers. Higher daily withdrawal balance for ATM. Introducing ‘Debit Card’ for POS terminal.
Threats Limited number of branches outside Dhaka. Very few ATM Booths around the country. No international credit card for local customer. Unstable political situation. Poor legal back-up.
Figure 19: SWOT/ SWOC Analysis of CSD of HSBC, Motijheel Branch This SWOT analysis has pointed out some important factors about the PFS of HSBC. As I mentioned earlier, this analysis is totally based on HSBC, Motijheel Branch; however, I think, this is a general SWOT analysis for the Personal Financial Service of HSBC, Bangladesh. 6.1. Recommendations The Hongkong and Shanghai Banking Corporation is doing their business very much successfully in Bangladesh. The bank’s customer base is increasing very quickly day by day. It is evident that that HSBC has many positive features and the customers are mostly satisfied with the service offered .In spite of this fact, however, the management of HSBC, Bangladesh can consider the following suggestions carefully to improve the service quality of the personal financial service and also to occupy better position in this competitive banking business market •
The Management of HSBC should conduct more product and services awareness campaign.
•
HSBC can open more ATM booths in its operated cities of Bangladesh.
•
The bank may open more branches across the country.
•
The bank may increase the daily withdrawal limit from the ATM.
•
HSBC can increase the sitting capacity of the branches.
•
HSBC can available the washroom facility for the general customer.
•
HSBC can introduce a new debit card with the ‘POS’ facility.
•
HSBC can increase the number of customer services counters in each branch.
•
The Bank can use the power of electronic media for its products and services advertisement and promotional purposes.
•
Individual desk essential for the Interns.
I have made these suggestions based on the experience of my working as an ‘Intern’ at the personal financial service under Customer Services Department of HSBC, Motijheel Branch. The bank management can take these recommendations as the guideline to provide better customer services. 6.2. Conclusion
There are a number of nationalized and foreign banks operating their activities in Bangladesh. Among them HSBC Bank Limited is one of the leading commercial bank. HSBC has introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh with in very short period of time. Its profit is gradually increasing. It plays a great role in collecting scattered Deposit, Loan settlement and International Trade etc. The Bank ensures quality services to the customers. For better growth and healthy economic position, it should introduce new and lucrative long-term credit schemes especially for new investors and schemes for poverty alleviation like micro credit. I hope HSBC do more work for socio-economic development besides their banking business to live up to its brand. To keep pace with ever-changing uncertain domestic business environment and face the challenges of revised global economic scenario, the bank should be more pro-active and responsive to introduce new marketing strategy to hold the strong position in Bangladesh. For the future planning and the successful operation in its prime goal in this current competitive environment I hope this report can provide a good guideline. I wish continuous success and healthy business portfolio of HSBC Bank. Bibliography •
Debnath R. M, Business of Banking, Lotus Publishers, 2004
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Macdonald, S. Scott, Bank Management, 4th edition, The Dryden press 2002.
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Wright Don, Bank Marketing, John Wiley Publishers
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Background of Hongkong Shanghai Banking Corporation-Wikipedia,the free encyclopedia
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HSBC Bank Bangladesh -Wikipedia, the free encyclopedia
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The HSBC business profile, Available at www.hsbc.com/businessprofiles
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A brief history, HSBC Group, Available at www.hsbc.com
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http://www.hsbc.com/about hsbc.htm
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Products and services, Available at www.filife.com/companies/hsbc/allproducts
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An-Investigation-Into-Customer-Satisfaction-at-HSBC-Bangladesh www.scribd.com
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SWOT analysis, http://en.wikipedia.org/wiki/SWOT_analysis