Financial Services of HSBC Qatar - Essay Example

Comparing financial services of HSBC Qatar of Executive Summary The financial services offered by HSBC Qatarhave been discussed in this paper. The services offered by the company have been segregated under three categories, which are Banking, Borrowing and Investments. Under the banking category details of savings and current accounts, credit cards, money transfer and Download center has been discussed. Under the Borrowing section, different kinds of loans have been discussed such as over draft, personal loans, asset linked loans and vehicle loans. Finally within the Investment section details of World selection, Mutual funds and Investment Quarterly has been discussed. Each of the section also contains background information of each type of services offered by the bank. Introduction The financial banks offer several services for the customers and each of them has different importance for different types of customers. The introduction of technology and the fast growth of internet usage have allowed the financial companies to add more value to the customers without much effort. The beginning of internet banking has made it easier for the customers to conduct their banking activities at ease and at their convenience. Although the mode of banking has evolvedbut the overall concept of individual activities are still the same. This paper is focused on the services offered by HSBC bank in their website. It will cover three basic services in details, which are Banking, Borrowing and Investing. The Qatar branch of HSBC will also be covered in this paper. Banking Savings Bank Account:The banking segment of HSBC offers two types of services, savings account and current account. An individual can choose anyone or both types of account depending on his requirements. The savings account allows an individual to accumulate funds and gain interest on it. It helps the individual to save money for future use. Current Bank Account: The current bank account is particularly for business purposes and offers services, which are exclusive to financial activities of a business. It allows the customers to deal with liquid funds, such as deposit funds, withdraw funds, write check, etc. Moreover, the customers can make unlimited transactions in a day (Money, 2015). HSBC Qatar offers three different types of accounts based on the requirement of the customers. They are Basic Current Account, Advanced Current Account and Premier Current Account. Money Transfer: The money transfer facility of HSBC Qatar allows the customer to transfer funds to different accounts. The customers can transfer money to pay bills, send money to peers abroad and also for investment purposes. Three types of money transfer services are offered by HSBC Qatar which are Domestic, International, Global view and Global transfer. Download Center:HSBC Qatar makes sure that the customers can have easy access to all the required information regarding their banking needs. In order to make it easy for customers to have information access on tariff rates, interest rates, rules and regulations on all the financial services, the company has developed a micro site which offers all the information under one roof (HSBC, 2015j). Credit Cards The credit cards are plastic cards issued by banks which can be used by customers to purchase goods or services on credit. The credit cards act as an alternative to cash and allow the holder to purchase goods, which costs more than what he has on his fund. The banks charge an interest on the credit value given to the customers (Landers, 2013). The interest rate varies across banks and nations. HSBC Qatar offers four types of credit cards which are Gold credit card, Platinum credit cards, Advance credit cards and Premier credit cards. These credit cards are differentiated by their features and fees (HSBC, 2015c). The Gold credit card is accepted all over the world at over 32 million outlets. The company offers a period of 56 days of interest free credit. This is the basic level of credit card, they offer limited features. An annual fee of QAR 300 is charged for this service. The second type is the Platinum credit card, which bears additional features like credit shielding and offers cash advances of 50% of the available limit as opposed to 40% in case of Gold credit card. The platinum version has an annual fee of QAR 450 (HSBC, 2015c). The third type is the Advance credit card which does not have any annual fee and it also comes with extended warranty and purchase protection. This card also has a cash advance of 50% of the current limit. Finally, the fourth type is the Premier credit card which does not have any annual fee and it also gives the customer an exclusive Lounge Access. Moreover, along with the purchase protection and the extended warranty, it also comes with travel insurance. The card also offers free entertainment vouchers valued QAR 20,000. All the four credit cards come with air miles reward program and the credit interest for all the four cards is 1% (HSBC, 2015c). Borrowing This section describes about different ways in which the customers can borrow money or take loans from the bank. Overdrafts: The overdraft facility allows the customers to make short term borrowing from their HSBC current account, thereby helping them to manage sudden unforeseen expenses. The overdraft option can be availed by writing checks or by using the debit cards. Personal Loans: The personal loan service allows the HSBC customers to make borrowings for personal expenses. The “Personal Loan” section of the HSBC Qatar website allows the customer to calculate their loan and interest amount through a dedicated personal loan calculator. Asset Link: The Asset linked loans are the borrowings, which are secured by assets. It is generally a business loan that can be availed by securing liquefiable assets such as inventories and other balance sheet assets. It is also known as the asset based financing. This type of borrowing allows the business customers to pay various business expenses, thereby keeping the cash flow in a desired state. Vehicle Loans Vehicle loans allow the customers to borrow money from the bank to purchase the vehicle of his choice. The advantage of vehicle loan is that the customer can purchase his favorite in installments, without having to pay the full amount at once. However, the disadvantage of vehicle loan is that the value of the vehicle depreciates over time but the principal amount on which the loan is taken remains fixed. Vehicle loans are offered by banks as well as several non-banking financial organizations. In case of failure to payback, the bank takes the possession of the vehicle (Deaton, 2013). HSBC Qatar offers vehicle loans at an interest of 4.79% per annum. The company allows the customers to avail loan for both used as well as new cars. For the Qatari citizens, the loan amount can go up to QAR 728,000 and for expatriates the maximum loan amount is QAR 350,000. Apart from offering car loans the company also offers car insurances at a rate which is competitive to rival banks. HSBC Qatar has added more value to the customers by making the payment option flexible for them. The customers can defer up to two monthly installments a year (HSBC, 2015f). This is the requirements for this service : REQUIRED DOCUMENTATION Application Loan Application & Agreement Form Primary identification • Qataris: Copy of Valid ID • Expatriates: copy of passport with valid residence permit or work permit (valid for at least one month) Evidence of income • Private companies: salary assignment letter (valid for three months) • Government and/or semi-government: salary certificate (valid for one month) Others • Valid quotation of purchase • Comprehensive car insurance valid for one year Investments Investments on financial products allow the customers to make their money grow at a rate depending on the type of financial product he is investing on. All types of financial products apart from fixed deposits come with certain degree of risks. The higher the level of risk, the higher is the return on investment. The customers may choose a financial product based on his personal risk appetite and expertise on financial market (The Telegraph, 2015). World Selection: The World Selection portfolio allows the customers to invest in five different funds. Each of the funds has different risk levels and offers return depending on the comfort level and risk appetite of the customers. It allows them to invest in a diversified portfolio of international funds. The diverse nature allows the customers to invest depending on their financial goals. Investment Quarterly: The Investment Quarterly is a publication released by HSBC that is based on investments to guide the customers so that they make the right decision. It helps the customers to increase their knowledge base of financial market and the way the investment business works (HSBC, 2015k). Gaining the right information allows the customers to increase their risk appetite and explore more options of investments by making educated judgments. Mutual Funds A Mutual fund gathers investments from several investors and invests the moneyinto a diversified portfolio of investment options like stocks, bonds and other money market instruments that are short term in nature. In contrast to investing directly in stocks, the mutual fund allows the customers to invest into a wide range of instruments thereby reducing the risk of losing money. It also allows the customers to invest in small amounts and still get large exposures. By investing in the mutual fund, the customers hand over the authority to manage the investments over to the fund manager. The fund manager then uses his expertise and analytics team to make the investment in the right instruments. Mutual funds has a low risk of making loss, however the return is also lower as compared to direct investment in to stock market (Vanguard, 2015). HSBC Qatar offers mutual funds that allow the customers to invest into an international portfolio of investments. The company allows the customers to set up their own portfolio from a wide range of investment instruments such as bonds and shares. The customers are also given expertise suggestions on which fund to invest in by carefully judging on the risk appetites and return requirements of the customers. The customers can also modify their investments by changing their fund portfolio free of cost. HSBC Qatar offers the customers to choose from 30 different funds. The customers also have an option of monthly investments which starts from USD 250 (HSBC, 2015i). Analysis and Evaluation The savings and current account are highly essential for the customers to manage their funds. The savings account allows a customer to deposit personal funds securely and gain interest on the principal amount. This is mostly for the personal use of the customers. The current account on the other hand is mostly for the purpose of the business transactions. The major difference between the savings and current account is mostly based on the usage by the customers. The savings and current account is imperative to make any financial operations including borrowing, investments or business transactions. The vehicle loans allow the customers to borrow money from the banks to purchase vehicles. It may not be possible for the customers to pay the entire amount to purchase a vehicle, thus vehicle loan is quite essential for the essential for them to borrow the money from the bank to make the purchase. Therefore, it is a highly valuable financial instrument for the customers who seek to purchase the vehicle of his choice. The vehicle loan also comes with certain degree of risks that is if the customer is not been able to pay the installment amounts then the bank will take possession of the vehicle. The mutual funds are one of the most popular investment products for customers. This is mostly because the mutual fund offers fairly high returns but is not considered as risky as investing in stocks. Investing in mutual funds decreases the probability of making loss. It allows the customers to invest in a wide portfolio of investment options with varying returns and risks. Thus, if the risk appetite of an individual is not so high then investing in Mutual Funds is a fairly safe option to invest in. Recommendation From the above assessment it can be recommended that each financial service is based on individual needs and their utility is dependent of the personal risk appetite. The savings account is recommended for almost every individual for personal use and the current account is recommended for every business individual. The vehicle loan is one of the most important borrowing options for the customers who are seeking forward to buy a new car that he cannot afford in cash payment. The mutual funds allow is recommended for the customers who have a moderate risk appetite. It offers higher returns than fixed deposits but relatively less than the direct equity investments. Thus Mutual fund stands in middle of both extremes and can be considered as a favorable investment option for most of the customers. Conclusion A wide range of financial services are offered by HSBC Qatar. The company has ensured to offer services that offer high value addition for the customers and gain high brand preference. The competitive interest rates and ease of use of several services through net banking has allowed HSBC Qatar to gain high customer preference. The official website of the company is carefully designed to offer all the services under one roof. The banking services offer personal savings and current accounts, credit cards, online money transfer, etc. It also offers comprehensive details on each service which is available for download under the download center. The company also offers loans and borrowings to the customers, both Qatari citizens as well as expatriates. HSBC Qatar has ensured that all the financial services offered can be easily availed through the internet and that the customers have sufficient information regarding all the services. References Deaton, J.P. (2013). How to Finance a Car and Get a Car Loan. Retrieved from http://usnews.rankingsandreviews.com/cars-trucks/How-to-Finance-a-Car/ HSBC. (2015a). Savings Account. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/banking/current-savings-account/savings-account HSBC. (2015b). Current Account. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/banking/current-savings-account/compare-accounts HSBC. (2015c). Credit cards. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/banking/credit-cards/compare-cards HSBC. (2015d). Money Transfer. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/banking/current-savings-account/global-view HSBC. (2015e). Personal Loans. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/borrowing/loans/personal-loans HSBC. (2015f). Vehicle Loans. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/borrowing/loans/vehicle-loan HSBC. (2015g). Asset Link Loans. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/borrowing/loans/asset-link-loan HSBC. (2015h). World Selection Portfolios. Retrieved from http://www.hsbc.com.qa/1/2/qa/personal/investment/wealth-management/world-selection HSBC. (2015i). Mutual Funds. Retrieved fromhttp://www.hsbc.com.qa/1/2/qa/personal/investment/wealth-management/mutual-funds HSBC. (2015j). Download Center. Retrieved from http://www.hsbc.com.qa/1/2/qa/about-hsbc/download-center HSBC. (2015k). Investment Quarterly. Retrieved from http://www.hsbc.com.qa/1/PA_esf-ca-app-content/content/pws/qa/qatar-pws/pdf/en/premier_gip_en.pdf Landers, L. (2013).Credit Card Basics: Everything You Should Know. Retrieved from http://www.forbes.com/sites/moneybuilder/2013/06/11/credit-card-basics-everything-you-should-know/ Money. (2015). Current Accounts vs Savings Accounts. Retrieved from http://www.money.co.uk/article/1007839-current-accounts-vs-savings-accounts.htm Taylor, A.,&Sansone, A. (2006). The Handbook of Loan Syndications and Trading. New York: McGraw-Hill. The Telegraph. (2015). Investing. Retrieved from http://www.telegraph.co.uk/finance/personalfinance/investing/ Vanguard. (2015). Mutual funds can help lower investing risks. Retrieved from https://investor.vanguard.com/mutual-funds/ Wellsfargo. (2015). Types of bank accounts. Retrieved from https://www.wellsfargo.com/financial-education/basic-finances/manage-money/options/bank-account-types/ Read More