One of the interesting opportunities of FinTech is this idea of
branchless banking
>> Yeah. >> HSBC obviously has many branches and
you're serious as a big bank, a traditional bank
In the UK, there was a study done of virtual banks or branchless banks and
the number one branch bank, in terms of customer satisfaction, was Direct bank
They have no branches
They're simply a virtual bank
HSBC came in number nine on that list
>> Yep
>> Why is that kind of an intriguing or interesting comparison?
And so let me give you a little bit more background about HSBC Direct
I think you'll be to to HSBC Direct
That's the number one
[CROSSTALK] >> Well they just call themselves
Direct Bank
[CROSSTALK] Pointing out it's owned by HSBC
>> It's owned by HSBC
>> [LAUGH] >> It was created by HSBC
>> So it's a virtual bank
>> Created by HSBC
>> Created by HSBC, a huge bank
>> Yes, yes, yeah
>> So it's a FinTech start-up
>> You can say [CROSSTALK] >> It was a FinTech because
when you started >> I think more than 20 years ago and
from banking bank, because at that time you used us for
No branches, absolutely no branches
>> Right. >> And they tested using ATM
>> Right. >> And what I wanted to share with you is
this direct bank, this brand, and HSBC in UK
They use the same technology systems
>> Right
>> They use the same ATM
>> Okay. >> And often, from our customer services
that HSBC is the direct or the direct bank rate number one on customer service
>> Yeah, yeah
>> And then, we are a little bit behind
Let me just [INAUDIBLE]
>> So HSBC branch banking same ATM
Same ATM. >> They don't like your ATM as much
>> Yeah, exactly
Same ATM
>> Same ATM, same system
>> Same system, same way of servicing
No difference
But they found that the ATM of First Direct is much better than ATM of HSBC
>> Why do you think that is
>> So the first thing to clarify is to take those in order, right?
So the way I see it is, if you are a virtual bank
>> Right. >> Or a direct bank
>> Yeah. >> You focus more on customer service
Now- >> Why?
>> I'm not saying
>> Why do you focus more on customer
service? >> I'm not saying that
because fundamentally you do not have branches
>> Okay. >> You do not interact with
the people directly
>> So the only way you ever meet the customer is by phone?
>> Is by phone, right
>> Or by the web, but yeah
>> Or by web, right, but you've got to bring it real well
Now, I'm not saying that HSBC or link the other banks
they do not focus on customers, they do, they focus on customer service
Very much, [CROSSTALK] >> But they may do other things as well
>> Exactly, it's multiple channels, it's multiple areas
So I think the focus is one thing
>> Right. >> The second thing of course is
the management
When we created this bank, we, Explicitly
by design, it's first direct, but it's not just first direct, different branding
>> Mm-hm
>> Okay?
And when we do the commercial, in order, it's a completely different bank, so
people perceive it's a different bank, okay?
>> Right. >> So, that's a how we start to, and
the management will separate it
Okay?
So I think- >> Separate people
[CROSSTALK] HR systems
>> Separate HR systems, and incentives
And separate type of employees because it's a direct bank
So the employee who take customer call
most of them are part time staff
And most of them are housewives
>> So that makes them less profesional
>> No, they got and maybe by the way because of this occasion
we do better training, we do more training
>> Okay
>> To them
>> Okay
>> But most importantly, the public they understand the customer more
Yeah because they are the housewives
>> And it may also be cheaper
>> And most of all I know [INAUDIBLE] that we use, we enumerate it
>> Okay yeah okay but
>> But the management of it
>> But they really understand the customer, they can relate to the customer
>> The focus on the customer the better
So at the end of the day what I was
saying is be customer focused, we need understanding the customer
And the practice of customer focus is not easy
We gotta make sure that we do that
>> But what's interesting, is if you do a great job of customer service and
you keep your products simple, you have a simple product line
>> Simple product line, you mentioned
>> Then the customers like
everything about you >> Yeah
>> So if you like Amazon
you like all things about Amazon >> Yes
>> Even if
something is the same as somebody else you don't like his thing, but
it might be the same technology >> And of course the things that really
reminds me is that when we did the first direct
>> Yeah
>> The best thing they offer
is the customer can contact them 24/7 through phone
>> What you can't do with a normal bank?
>> We do not offer it as a normal bank branches, okay?
>> Right
>> And also, you gotta think about the mind set
>> Yeah. >> The first thing that come to mind is
well I've gotta go to a branch
[INAUDIBLE] Now, banks offer telephone banking and internet bank services
>> Some banks do
>> Yes
Theodore Henry King CLARKAssociate Professor
