HSBC streamlining IT in $3.5b cost saving drive

HSBC has laid out aggressive plans to streamline IT and realign business processes, as part of a bid to save up to $3.5 billion (£2.1 billion) over three years.

Stuart Gulliver, chief executive, said the bank would “implement consistent business models, re-engineer global functions, re-engineer processes and streamline IT”, under a four-pronged strategy for cutting costs.

By making “sustainable” cost savings, he said, the bank would invest in “new products, process and technology”. Cutting complexity was of vital importance, he added, during a presentation at the bank’s investor strategy day.

HSBC will target $175 million dollars in savings in two years, it said as an example, by moving IT development to “lower cost locations”. A spokesman at the bank suggested the plans were in the early stages, and did not disclose how many staff would be affected.

The SAP-based bank said that it plans to “build less [software] in house and selectively buy more externally”.

The bank said its ‘One HSBC’ initiative, dedicated to standardising operations globally, had delivered consolidation of data centres – which it said would provide $100 million in savings by 2013 – as well as a strong global view.

But the plan was “too IT-centric” and not broad enough, according to other presentations by bank executives.

Nevertheless, technology will continue to underpin much of the change. HSBC is standardising on global SAP enterprise resource planning systems, Experian Connect+ data aggregation and Experian Strategy Management software, amongst other technology.