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HSBC: Taking the Low Road on the Banking High Street?

© Carey Goodman

Time for another example of off-shoring at its worst.

Anyone who perceives the issue of off-shoring as an American whine-and-moan election year theme should think again. Off-shoring now has hold of some of Europe's most respectable companies - and they are not just those involved with hands-in-the-plant labor.

In rhetrospect it should be no surprise that most of the details of the Hong Kong Shanghai Banking Corporation's (widely known as HSBC) off-shoring intentions would be provided in a relatively obscure news source such as the local news section of the Bristol Evening Post. Given its possible implications for HSBC customers, the item should have made the front page of the Financial Times business section.

Does HSBC (chartered in 1865 to accomodate trade between Europe and China) simply plan a return to its "roots", or is there more to the bank's revelations than HSBC would like its customers to know?

The saga began last October when HSBC announced it would relocate 4000 jobs from the UK to China, Malaysia, and India. HSBC did not specify which jobs those would be or from which centers they would be drawn. The announcement was part of an HSBC press release to report its strengthened alliance with China's Communications Bank and its plans to secure a substantial 14.7% minority stake in the Indian bank Udi.

HSBC actually began off-shoring in 2001 when it relocated 2000 jobs from the UK to India. What makes this different from other off-shoring experiences, and what happened since October 2003 to rouse the interest and curiosity of the Bristol Evening Post?

In a 29 June 2004 Evening Post article on HSBC's decision to close its Almondsbury customer care center, an HSBC official Ms. Karen Ng revealed the reason the bank would close its largest customer care center in Britain was because of high error rates. Ms. Ng cited an internal report finding the error rate for customer care personnel in India who perform call center tasks, loan processing functions, and other financial transactions duties had an error rate of eight errors per million customers; the UK-based customer care personnel who perform the same functions had an error rate of "fifty to sixty errors per million customers". Therefore HSBC determined the best way to improve its processing accuracy was to close its UK-based centers. While the data's precision may be questioned - an exact error rate of eight per million for India against a vague fifty to sixty per million range for the UK - Ms. Ng says customers will benefit from the relocated centers. She also says the data involving the phase-out of UK sites were made available to the union representing financial services employees (Unifi) in October 2003 to provide Unifi sufficient time to prepare itself and its members for the changes.