The power that digitalisation has to reshape the financial landscape cannot be underestimated. Banks and institutions, employees and clients are all being impacted by developments in cloud technology, artificial intelligence, blockchain, quantum computing, the metaverse and digital assets, to name just a few examples. “The way these technologies are revolutionising our world is having a significant impact on how clients are interacting with us,” says HSBC Luxembourg CEO Emanuele Vignoli. “They want a different type of client experience. They want easy access, 24/7, and this is opening many new areas for growth. But it is also making the financial system a lot more efficient and transparent.”
Vignoli stresses how critical it is for financial institutions to not only respond to the evolving needs of clients and employees but to also stay at the forefront of the development of new technologies themselves. This, in his opinion, requires banks to be involved in the design, testing and de-risking stages of tech innovation. “Clearly, at the design stage, we need to work with technology companies, innovators and of course clients, to really understand the services clients need and how we can provide the best customer experience, so that we can continuously improve our offer.” Embracing disruptive technologies can also ensure banks are well prepared for the future, meeting the wide range of needs across different generations of clients.
Banks can play a key role in the design, testing and de-risking stages of digital innovation.
However, the opportunities for growth provided by early adoption also involve a certain amount of risk. So, Vignoli says, banks need to work closely with governments, regulators and partners across the industry to ensure there is due consideration given to ethics, as well as a clear understanding of potential risks and how they can be mitigated.
Digitising at scale
Digitising at scale is one of four strategic pillars that HSBC has defined to support its ambitions. That means building innovative digital solutions and deploying them rapidly, to deliver better banking services for its customers. In addition, the bank is delivering digital banking services that are more secure, less carbon intensive, and accessible to all its customers, anywhere, any time. “This allows us to unlock future innovation, while strengthening cybersecurity, moving the bank towards its goal of net zero carbon emissions in its operations by 2030,” Vignoli explains. “We are also embedding digital into our workplace, and we are exploring cutting edge technology. This includes partnering with Fintechs that are involved in ground-breaking innovations including quantum computing and blockchain technology to accelerate the evolution of financial services globally.”
Indeed, HSBC chose Luxembourg, which clearly plays a very important role within the European landscape, as the pilot for its innovative Orion proprietary tokenisation platform. The platform leverages blockchain technology as a “single source of truth”, whereby asset and settlement tokens sit natively and securely on the platform’s ledger. This resulted in the successful launch, earlier this year, of the European Investment Bank’s first digital bond in pound sterling, which is held on the Orion platform.
By combining the scale and stability of HSBC with the mindset of a tech start-up, we can nurture new ideas, drive innovation and transform the future of banking.
“Luxembourg was the perfect place, with a very welcoming, but also very advanced regulatory environment for the digital space, mixed with our strong presence on the ground and the right knowledge,” says Vignoli with some local pride. “A lot of the development work was done at our UK headquarters. But a lot of the work in Luxembourg was around regulations, laws and making sure that we comply with everything within the EU space.”
HSBC is now looking to onboard more financial institutions on the platform and to open it up in other locations. “We believe digital assets and tokenised solutions will continue to gain momentum,” says Vignoli. “This capability complements our existing best-in-class custody and asset services. It’s an extremely exciting time in financial services,” he continues. “By combining the scale and stability of HSBC with the mindset of a tech start-up, we can nurture new ideas, drive innovation and transform the future of banking.”