Technologies: Hongkong and Shanghai Banking Corporation - Research Paper Example

Executive Summary The advancement in technology has made life simpler for people. Banking is an area which has seen rapid advancement in technology and people are using it at the ease of their house. With people becoming busier in their daily lives the use of technological advancement has come as a help. Today banks enter into inline transaction. Customers can transact using this medium. Still there are banks which confine themselves to ATM and SMS banking to ensure higher customer satisfaction. The paper presents the manner in which online banking has evolved for HSBC bank and the manner it is creating problems for the banks. This paper presents the factors which helps to improve customer satisfaction and helps to develop a long lasting customer relationship. It also provides important inputs on factors which had an effect on the relationship and ways which will help HSBC bank to improve it. Banking institutions need to provide different facilities to their customer to ensure satisfaction. Along with it different type of features should be provided by electronic means but the integrity and safety of the funds of the customers should be looked after. This will be a step in developing relationship and will be helpful in the survival of banks in the competitive environment. Table of Contents Introduction 3 Rationale of the study 3 Objectives 3 About HSBC Bank 4 Literature Review 5 Problems of online banking for HSBC Bank 6 Customer response towards online problems 8 Customer response to solve the problem 9 HSBC response to solve online banking problems 9 Limitations 10 Conclusion 11 References 12 Introduction The growth in technological advancement has made people look towards more advanced ways in the banking system. The banking system as a result has evolved and provides complete internet solutions to the people. The study helps to highlight the manner in which interned banking has evolved for HSBC Bank. Understanding the requirements of the customers and developing services accordingly is the main objectives for the baking system. The study presents the manner in which online banking is creating a problem for HSBC customers and ways that will help to improve online customer banking satisfaction. Rationale of the study The study on the problem due to online banking for HSBC bank is being conducted due to the following reasons Understanding the manner in which online banking has revolutionize the banking system The growing use of online banking despite scams and frauds being a inherent part of it Objectives It is important to identify the objectives of this study so that a clear direction is given to the study and the importance of the study magnifies. The objectives are To find the current situation of online banking in HSBC Bank To identify the problems surrounding online banking in HSBC bank To find out the customer expectations and what does online banking provides in reality To find out ways in which the magnitude of the problem associated with online banking can be reduced About HSBC bank HSBC is one of the largest banks established in London. The bank has around 8000 offices in 87 countries all over the world (HSBC Website, 2011). The bank was started in 1865 and has grown to different countries. The offering by the bank has grown and the use of technological advancement has made it easy for HSBC bank to provide quality service. HSBC bank offers a variety of product and services based on the customer requirements which have helped the banking institution ensure quality in service. HSBC bank has recently faced certain issues due to technological advancement which has created doubts in the mind of people and customer satisfaction has reduced due to it. The above graph shows the manner in which HSBC bank works and the different mechanism it uses to provide customers varied services. The above chart shows that HSBC bank uses online banking as a medium to provide goods and services to the customers which results in additional pressure for HSBC bank due to the technological advancement and problems associated with it. Literature Review The literature review which are past studies conducted in the same direction and highlights the issues and importance being laid on online banking. Some of the notable studies in this direction are as follows A study in this direction says that security is a major issue which surrounds online banking and customers are willing to switch to online ways but security needs to be looked after (Martin, 1998). Along with this banks should ensure that their website is cluttered with advertisement thereby making it difficult for the customer (Hamlet, 2000) to use online services to the fullest. This has been further substantiated by the fact that attitudinal factors has a relevance on people using online services (Tan & Teo, 2000) which gets further influenced by prior experience of using technology (Karjaluoto, 2002). The fear in the mind of customers using online facilities gets magnified due to information sharing and distrust (Rotchanakitumnuai & Speece, 2004) which arises due to the usage of online facilities. The past research highlights mixed response to the use of online banking and brings forward important findings for both the banks and customers. Problems of online banking for HSBC Bank HSBC Bank which is one of the leaders in the banking industry is facing certain problems in relation to online banking. It has been witnessed that HSBC bank has seen a lot of scams and frauds due to usage of technology. HSBC bank customers witnessed people creating scams as hundreds of customer found out that their funds were withdrawn due to technology advancement. This created chaos and the pressure mounted on banks as they were unable to maintain reports thereby making customers look towards other banks and created a tense situation for the bank (Frauds, 2008). The problem faced by HSBC further got mitigated by a finding from Cardiff University which highlighted that apart from hacking or entering the system people can misuse the accounts of other by using a key logger which customers use to enter their accounts. This key logger can be played later which provides people to misuse the accounts and transfer the funds from customer to their accounts or can even get loan thereby mounting pressure on HSBC bank due to the usage of online banking (Cardiff University, 2006). The problem for HSBC banks gets mitigated due to “vishing”. The fraudsters using vishing copy the voices and signs of the logger and use it to create scams. This is an area where HSBC bank is facing some trouble as the use of phone banking through voice modulation provides another opportunity to the fraudsters to create scams (BBC News, 2011). This is an area where HSBC bank needs to devise a mechanism which ensures that the problem associated with the usage of online scams reduces. Another problem encountered by HSBC customers is the technical trouble associated with it. HSBC customers have found it difficult to use the online banking services as the system was down for a long session which prohibited people from using the system. Even HSBC bank wasn’t able to provide reasons for this failure highlights the lack of customer response thereby affecting customer relationship (Fiveash, 2009). This helps to bring the following problems faced by HSBC bank customers High interest rate being charged to user who use online services Increasing technical problems due to changes in technology Limits being put by bank on the amount pf money that can be withdrawn Customer response towards online problems HSBC bank failure to deliver on the standards set by other banks has created a dent on consumer confidence. It has resulted in people loosing faith on the bank and has made people switch to other banks. Some of the responses from customers are as follows According to a customer who is a account holder for HSBC bank says that online banking has been a headache as he hasn’t been able to use his account online. Despite, repeated request and code the customer was unable to log in thereby making the customer loose interest in HSBC bank and look towards some other bank (Gamer, 2007). Another customer who has been associated with HSBC bank for the last 15 years witnessed that the customer account was manipulated and the amount was transferred to some other account. The customer on bringing this problem to the bank was not provided any respite as the bank didn’t take the issue seriously thereby hampering the consumer confidence in the banking system (Alex, 2009). This was a continuous problem witnessed by different customers which made it difficult for HSBC to improve customer relationship. This makes it important that HSBC bank realize the importance of this problem and devise mechanism which will help to reduce the impact of online problems faced by HSBC bank. Customer response to solve the problem Customers based on the problems faced by online banking provides the following mechanism which will help to solve the problem associated with online banking for HSBC bank Customers look towards the management to ensure that the problem associated with online banking gets resolved Banks should give more emphasis on customer satisfaction and look towards way to improve it HSBC bank should look towards reducing the interest rate and provide free usage of online services HSBC bank should look forwards towards solving the technical issues and should also look towards developing a mechanism which reduces frauds and scams. HSBC response to solve online banking problems To ensure that the problem gets solved HSBC bank is working in tandem with Cardiff University to design a mechanism which ensures that illegal access to customers account is restricted. This has helped HSBC bank develop a mechanism which ensures that customer account is not misused by the users thereby helping to ensure that the weakness in the system gets reduced (Cardiff University, 2006). HSBC bank is also looking towards improving the security concerns by ensuring that the users have to change the password regularly and using the incorrect password for a few times ensures that the account gets blocked. This has helped HSBC bank to ensure that the frauds and scams associated by the misuse of accounts get limited to a large extent (Srivastava, 2010). HSBC to improve customer loyalty and satisfaction is looking towards devising a mechanism which ensures that the problems faced by the consumer are addressed quickly which will thereby help the banking system to ensure quicker delivery of services. Also, the overall development and proper management will help HSBC bank to ensure that a change is brought about in the manner the business performs and will help to provide higher customer satisfaction. HSBC bank on this front has taken several steps to ensure that the service quality improves and HSBC bank is able to ensure higher customer satisfaction. Limitations The study carried out on the online problem faced by HSBC banks highlights the following limitations faced of the study Only secondary data is used for the study as no primary data has been gathered which has resulted in the findings being faced on past results. Time constraint is another issue which has limited the work on this study The research work carried out is based on customer preference and it is difficult to identify the customer preference towards a product which might result in incomplete disclosure by the customers. Conclusion The growth in the banking sector over the past 20 years has made it important for the banking system to think about their strategies which help to improve customer online services. Banks are looking towards ways to improve services which has made banks to fight for the same pie. This makes it important for banks to improve their services and ensure that their service quality in relation to online banking improves. Banks need to ensure that steps are taken to reduce the risk associated with online banking. This will thereby put the burden on customers who will have to ensure that steps are taken by them to safeguard the vital information. Along with it customers will have to bear the onus of any frauds so steps need to be taken on both the directions to ensure quality in service. This brings forward the challenge for the banking industry to devise a mechanism which ensures that customer is safeguarded and trust is readily built. This will help to improve customer satisfaction and will help the customers to be loyal. This paper thereby presents the manner in which HSBC bank faces the problem associated with online banking and the customer response towards it. Finally, by arriving at the customer solution towards the same and steps taken by the banking system helps to ensure that the service improves. References Alex, B. Flabbergasted by HSBC Customer Service. 2009. Retrieved on April 24, 2011 from http://www.planetfeedback.com/hsbc+bank+usa/overall+experience/flabbergasted+by+hsbc+customer+service/318032 BBC News. The battle for your online banking account. 2011. Retrieved on April 24, 2011 from http://news.bbc.co.uk/2/hi/business/4778977.stm Cardiff University. Researchers discover online banking security problems. 2006. Retrieved on April 24, 2011 from http://www.physorg.com/news74441914.html Frauds. A wave of online banking frauds soaks HSBC. 2008. Retrieved on April 24, 2011 from http://nymag.com/daily/intel/2008/02/a_wave_of_online_banking_fraud.html Fiveash, K. HSBC online banking hits another wall. 2009. Retrieved on April 24, 2011 from http://www.theregister.co.uk/2009/06/29/hsbc_downtime_update/ Gamer, W. HSBC bank Internet banking problems. 2007. Retrieved on April 24, 2011 from http://www.digitalspy.co.uk/forums/showthread.php?t=681930 Hamlet, P. E-banking management. Southwest Cengage Learning, 2000 HSBC Bank Website. HSBC Bank. 2011. Retrieved on April 24, 2011 from http://www.hsbc.pl/1/2/en/business/electronic-banking-systems/hsbcnet Karjaluoto, P. Business for the 21st Century. 11th edition, Pearson Publication, 2002 Martin, G. Internet Banking presents a new problem for the banking system to confront with. Journal of marketing, Volume 23, Issue2, pp. 134-146. 1998 Rotchanakitumnuai & Speece, Banking Theory & Practice, 19th edition, Vikas Publication House Pvt. Ltd. 2004 Srivastava, S. Online banking Problems. 2010. Retrieved on April 24, 2011 from http://www.buzzle.com/articles/online-banking-problems.html Tan, K. & Teo, P. Electronic Commerce; Usage and development. Journal of Marketing, Volume 7, Issue 4, pp. 56-74, 2000 Read More