HSBC to take on challengers with new digital bank

HSBC plans to launch a new digital bank aimed at SME customers in an attempt to compete with the raft of challenger banks cropping up in the UK.

The bank, which is the largest lender in Europe, has recruited as many as 100 people and set them up in a secret location somewhere in Aldwych, London. The project, dubbed “Iceberg”, was uncovered by The Telegraph, which spoke to a source close the matter.

According to that source, the new bank could launch a beta testing phase in 2018. HSBC already disclosed earlier this year that it planned to spend as much as $17 billion on new technology-based services. The bank is targeting aggressive growth figures, and the domestic business was left with around $52.5 billion in excess capital to play with.

The bank joins a number of other established names trying to contend with the “fintech generation”, which includes the likes of Starling, Monzo, Tandem, Monese and N26. Royal Bank of Scotland is reportedly working on a new banking-as-a-service offering.

HSBC is in the middle of switching seven key offices from London as Brexit begins to bite. HThe Europe-focused offices, which are responsible for the bank’s activities in Italy, Spain, the Netherlands, Belgium, Luxembourg, the Czech Republic and the Republic of Ireland, will be moved to Paris.

Reports suggest that up to 1,000 staff will be affected. HSBC joins an outflow of banks shifting their hubs to the EU to avoid disruption to business in the event of a no-deal Brexit


HSBC Group COO Andy Maguire spoke at Money 20/20 Europe earlier this year, opining that there are loads of companies trying to be “clever and sophisticated” but customers “just want simple things” that work regularly and are compatible across borders.

Proof-of-concept ideas and mobile wallets fell into the HSBC exec’s crosshairs. He stated that he had no time for POCs: “If it’s not going straight into production it’s a waste of time”. Maguire also said that he saw “no problem” which mobile wallets can solve.

If you’re not focused on customer impact, he added, “you’re in all sorts of trouble”. HSBC, he added is “not in the business of inventing technology”.

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