The Contemporary Development of HSBC and Products in APAC Research Paper

The company HSBC was founded in 1865 to “finance the growing trade between Europe, India and China” (HSBC n.p.). Since then, the company has developed a variety of products that address the needs of its clients worldwide. At present, HSBC offers numerous financial services to its clients in Asia and China. It is necessary to note that the company’s revenue is especially strong in Asia-Pacific (Schaefer n.p.). APAC remains one of the most profitable and fast-growing markets for the company.

HSBC accepts deposits and offers credits to different clients in the region. Private banking services remain some of the core businesses of HSBC. The company tends to reduce fees to attract new clients as well as gain loyalty of existing ones. Commercial banking is another significant area where the company offers various products (“Connecting Customers to Opportunities” 25). Developing loyalty programs, HSBC remains attractive to lots of companies, enterprises, associations, etc. in the region.

Commercial banking includes a lot of popular products and services which are offered to the company’s clients in APAC. HSBC offers bank accounts that address needs of different businesses. The company provides a variety of programs in the sphere of loans. Thus, HSBC assists businesses in general financing, trade finance, business property financing (HSBC n.p.). Such services as import and export finance consultancy are popular in the region. Liquidity management is also a popular service among the company’s clients.

Notably, the clients of the company include “governments, large and mid-market corporates . high net worth individuals, and mass affluent and retail customers” (“Connecting Customers to Opportunities” 10). Insurance, broking and investment are also core activities of the company in the region.

Thus, HSBC has invested in one of the largest insurers of China, Ping An Insurance (Reuters n.p.). It is important to note that the company invested significantly in the offshore market (Hendel et al. 6). China and India are very favorable markets where the company has been developing throughout decades. This enabled the company to increase its revenue.

The company offers services in the sphere of retail banking and wealth management. HSBC assists its clients to store and invest their money (HSBC n.p.). Thus, the company’s products include personal internet banking, mortgage and home buying, credit cards, retirement planning, personal loans, investment, insurance, savings.

The company also offers services in business banking. These products and services include global trade consultancy (products for exporters, importers as well as warehouse financing), business current accounts, cash management (integrated payment, receivable and bulk disbursement solutions), factoring consultancy, business loans and foreign exchange services (HSBC n.p.). The company offers a variety of solutions to its clients.

However, global financial crisis of 2008 considerably affected the company which is now selling many of its non-core businesses in the region. It is also necessary to note that HSBC was accused of illegal operations and the company will probably have to pay almost 100 million US dollars for “helping clients to illegally bring money linked to drug trafficking activities” (“HSBC Holdings PLC” n.p.).

Admittedly, these two factors negatively affect further development of the company in the region. Nonetheless, due to the core banking and financial services provided, the company remains one of the biggest and most influential corporations in the region.

Compare and Contrast

Globalization made it possible for companies to run their business in different markets quite easily, though it did not wipe the differences between the markets. For instance, HSBC which is operating in largest markets has to take into account peculiarities of each of them. For instance, Europe, APAC and the USA have significant differences which affect the ways the company is choosing.

It is possible to trace the differences when it comes to the governments’ attitude towards offshore marketing. Thus, in APAC offshore is fully accepted whereas in Europe it is “less politically accepted” (Hendel et al. 6). At the same time, offshore is almost completely unaccepted in the USA. This market does not have enough facilities for offshore.

When analyzing the three regions, it is necessary to consider legal systems. APAC can be characterized by scarcity of laws and regulations compared to European and US markets. The difference in regulations led to the situation when the company is accused of running ‘inappropriate’ operations (Pratley n.p.). Thus, the US legal system traced operations which are thought to be connected with illegal operations of terroristic groups.

The three regions also differ in terms of financial climate. Thus, APAC is still regarded as a rapidly growing market. The company has invested a lot into the emerging markets which has proved to be a successful strategy as HSBC is a world leader in this area “with USD145 billion assets under management in this asset class” (“HSBC Global Asset Management” n.p.).

The company is also anticipating significant growth in this region (Fedorova n.p.). At the same time, the US and European markets face various financial problems. The 2008 financial crises had a profound impact on these markets and the company was also affected to a great extent.

The contemporary business world is associated with serious competition which is manifested in every level, in every region and in every sector. Such multinational companies as HSBC lack for flexibility to adjust to the changing environments. It is also necessary to note that one of the major principles of the company is security.

This is very important for a bank, though the company tends to make decisions quite slowly as every decision is weighed thoroughly. This can be regarded as a potential risk as the environments are changing rapidly and it is important to address a variety of issues at quite a high pace, especially in APAC region. As has been mentioned above, the difference in legal systems of the regions has already led to certain problems. Admittedly, this difference can be regarded as certain kind of potential risk.

Thus, the company was accused of “ignoring its own sustainability policies” (“Deforestation in Sarawak” n.p.). The company was accused of cooperation with enterprises involved in the illegal deforestation in Sarawak. However, the laws accepted in the region have hardly been broken. At the same time, in the USA and Europe enterprises involved in such activities would be pursued.

Finally, it is necessary to note that the company can use APAC-based resources in the USA and vice versa. However, due to the “multitude of languages spoken in Europe” the company can hardly use APAC-based resources in this region (Hendel et al. 6). This factor is often underestimated or even ignored. However, it can also influence the development of the company in different regions, so it should be taken into account.

Works Cited

“Connecting Customers to Oportunities”. HSBC. 2012. Web.

“Deforestation in Sarawak.” Economist. 03 Nov. 2012. Web.

Fedorova, Anna. “HSBC’s Germany MD to Head EMEA Sales.” Investment Europe. 07 Aug. 2012. Web.

Hendel, Anja, Wolfgang Messner and Frank Thun. Rightshore: Successfully Industrialize SAP^® Projects Offshore. New York: Springer, 2008. Print.

HSBC. 2012. Web.

“HSBC Global Asset Management Strengthens EMEA Business”. HSBC Global Asset Management. 08 Mar. 2011. Web.

“HSBC Holdings PLC.” New York Times. 09 Nov. 2012. Web.

Pratley, Nils. “HSBC Needs to Tell All on Money Laundering.” Guardian. 05 Nov. 2012. Web.

Reuters. “HSBC in Talks to Sell $9.3Bn China Insurance Stake.” Guardian. 19 Nov. 2012. Web.

Schaefer, Steve. “HSBC Puts Aside $2B for Legal Troubles, Still Faces Libor Risk.” Forbes. 30 Jul. 2012. Web.