HSBC sees big savings from global IT as profits climb

HSBC has said that its use use of standardised IT globally is continuing to contribute strongly to group profits, with its Whirl global credit card platform in particular enabling it to cut IT costs.

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HSBC has said that its use use of standardised IT globally is continuing to contribute strongly to group profits, with its Whirl global credit card platform in particular enabling it to cut IT costs.

The bank today reported first-half pre-tax profits of £7bn, up 13% on the same period last year, on operating income 20% higher at £19bn.

Group chief executive Michael Geoghegan said the Whirl platform was now servicing 86 million accounts across 16 countries, which had allowed HSBC to “improve services for our card customers and to cut our IT costs per account by 16%.”

Geoghagan said the bank was also introducing a new personal and business internet platform across the group.

“This has been implemented in 25 countries so far. Internet sales have risen 68% compared to the first half of 2006,” he said.

The bank said the new infrastructure was allowing it to launch new services, including direct banking.

HSBC also said it global IT approach had also enabled the roll-out in May across 35 countries of its Premier account aimed at international mass-affluent customers.

“First indications are encouraging and there is an opportunity to gain significant global market share in this valuable segment,” said Geoghagan. “We believe that, over time, we will add four million new mass-affluent customers.”

At its annual general meeting back in May HSBC revealed growth in its online business of 55% in a year.

Last year HSBC said it had set its global IT function an annual target of cutting 10% from per-transaction operating costs across its global banking operations.

IT at the bank, on which it expects to spend £2.7bn this year, is run as a shared service for all of the group's global businesses. Business units are then charged based on usage, giving smaller operations access to systems that would otherwise be uneconomic.

The bank's IT agenda has seen it develop more than 80 global platforms and systems it can now reuse in local markets, with more in the pipeline.

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