Customer Service, HSBC (DU)

The Enrichment of General Banking of HSBC through customer services
Chapter 1: Introduction
1.1 Introduction
BBA program of Dhaka University is organized and tailored to provide the students with the
conceptual, theoretical and practical tools of analyses. Special stresses are given on theory
and practice them under an organization. There fore as an internee I have completed my
practice session and prepared this required Report based on investigations carried out by
myself in Hong Kong Shanghai Banking Corporation . Service industries are quite varied.
The government sector, with its courts, employment, services, hospitals, loan agencies and
schools is in the service business. The private non profit sector with its museums, charities,
colleges, foundations and hospitals, is also in the service business. A good part of the
business sector, with its airlines, banks, computer service bureaus, hotels, insurance
companies, law firms, management consulting firms, medical practices, motion picture
companies, and real estate firms is in the service business. A service is any act or
performances that one party can offer to another that is essentially intangible and does not
result in the ownership of anything. Its production may or may not be tied to a physical
product. This report has been prepared on the service organization. The name of the
organization is HSBC. The bank within a short span of ten years, has successfully built
its' position in the banking arena of the country
1.2 Origin of the Report

The BBA internship program is a compulsory for the students who are graduating from the
School of Business of Dhaka University. It is a 03 credit hour course and Students who have
completed all the required courses (at least 114 credit hours) are eligible for this course. The
organization attachment started on March 01, 2007 and end on May 31, 2007. My
organization supervisor Mr. Safayat Hasan (Customer Services Officer, Motijheel Office,
HSBC Dhaka) assigned me the topic of my report and my institution supervisor at
Department of Finance, University of Dhaka, Prof. M. Nasiruddin duly approved it. The
reason behind choosing this topic is that, recently the CEO of HSBC Bangladesh has given
emphasis on better customer service and more customer satisfaction and thus the Customer
service officer wants to get an idea of the current level of customer satisfaction at HSBC.
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1.3 Objectives of the Report

The basic focus of the study is to identify the main factors that ensure the best service in the financial
sector which will in future enhance the margin of HSBC in the coming year. To ensure the
profitability and to increase the market share some recommendations have been drawn. The factors
are identified from the findings of the questionnaires. However, the specified objectives of the report
are-
General objective
 To gain practical job experiences and view the application of theoretical knowledge in the real
life.
Project objective
 To know customer’s different views on their organization's current level of service quality and
standard.
 To identify the factors those are essential for providing better service.
 To find out organization's short term and strategic plans to ensure quality.
 To suggest ways of improving the present standard that accommodates a rapidly growing
customer volume.
1.4 Scope of the Study

The whole activities of HSBC can be divided into three main divisions. They are corporate
banking, Personal banking and Operations. From investigation, annual report and interview it
has been found that there is a substantial increase in the deposit or liability sector of HSBC.
The same thing was happening in the export and import sector. Less rigidity and flexibility in
the sanctioning process of credit, loans and advances were enhancing the condition to
maintain a good relationship. Moreover, satisfaction of the employee is also responsible for
the same. The report is mainly written based on the personal banking, corporate banking and
part of operations. The comprehensive knowledge on the organization and a thorough
knowledge on the project come under the scope of this program and report. This report is
mainly written based on the perception of the clients of the HSBC. Most of the primary
information has been collected through the investigations and the rest has been from the
questionnaires. The presentation of the organizational structure and policy of HSBC
Bangladesh and investigating the strategies applied by it provide the scope of this report. An
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infrastructure of the organization has been detailed, accompanied by a global perspective and
look into the future. The scope of this report is limited to the overall description of the
company, its services, and its position in the industry and its marketing strategies. The scope
of the study is limited to organizational setup, functions, and performances.
1.5 Methodology
The internship program generally starts with visit and observation. However, in respective areas of the
study different methods can be used where necessary. In preparing this report some methods was
followed as preparing a report about the activities of any financial organization is a difficult and
complicated task and no single methods is appropriate for preparing the report. Effective research
involves six basic steps, shown in the following figure:
Define the Problem Research objective Develop research plan
Data collection Data analysis Findings & Recommendation
Diagram-1: Effective Research
A problem well defined is half solved. The project title is “The Enrichment of General
Banking of HSBC through customer services”. It defines the various aspects of marketing
programs adopted by HSBC. It discloses the factors behind the increase in the profit margin
and provides suggestions to provide more quality services than the present situation, as it is
now one of the big challenges of the organization.
The next step is to set objective behind conduction the research. Every research work must be fruitful
and cost effective. The basic objective is to accomplish and interpret relevant information for decision
making process.
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To make the research fruitful a research plan was developed which involved three steps.
Research Plan
Deciding the type of Developing Research Determining the source
Research Design source of data
Primary source Secondary source
Explanatory Research Conclusive research
Diagram-2: Research Plan
The type of this research is an exploratory research, as it is not only identifying the problems but also
give suggestions.
1.5.1 Selection of sampling
The sample was not selected randomly. Instead of selecting randomly the sample was selected
according to the convenience, as it is not possible to satisfy every respondent to fill the questionnaire.
In this way, each sample was selected for the present study.
1.5.2 Data Collection Method
The sources of data are broadly classified in to two categories. Both the primary and secondary
sources have been used for collecting data for the research.
• Primary source: Primary data are those, which are collected by the researcher for particular
purpose. For this research, primary data has been collected by surveying the corporate clients,
normal consumers or end users and by surveying the employees. For collecting primary data two
methods have been applied:
1) Through questionnaire: Three sets of questionnaires have been prepared for the survey purpose.
One for the corporate clients and one for the end users or the deposit holders and another one is
for the employees. The copies of the questionnaires are enclosed in the appendix of this project
report.
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2) Observation method: Secondly observation method has been followed to collect the necessary
data. While the project work was conducting in the organization the behavior of the clients and
consumers also noted down to understand their needs and want.
• Secondary source: The data about the organization and short term plan was collected from some
secondary sources. They are collected from various printed materials like news paper, journals,
magazines etc. The sources are :
1) Internal Sources:
- Company's annual report
- Bangladesh Bank.
- Information from the employees of the company.
2) External Sources:
- Different books, journals research paper on HSBC.
- Government report.
- Newspapers.
1.5.3 Data Analysis Method
Data Analysis was done mostly through table and statistical data comparison (frequency,
relative frequency). Software like MS- Excel, is used to analyze the data and come up
with good findings.
1.6 Limitations
• Lack of comprehension of the respondents was the major problem that created much
confusion regarding verification of conceptual question.
• Limitation of time was one of the most important factors that languished the present
study. Due to time limitation, many aspects could not be discussed in the present study. Due
to time constraints, the sample size had to be restricted to 100 only.
• Confidentiality of data was another important barrier that was faced during the
conduct of this study. Every organization has their own secrecy that is not revealed to others.
While collecting data on HSBC's strategic plan, the personnel did not disclose enough
information for the sake of confidentiality of the organization.
• Rush hours and business was another reason that acts as an obstacle while gathering
data.
• Most of the employees are not much cooperative as expected
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Chapter 2: Organization Overview
2.1 An Overview of HSBC Group

The HSBC Group is named after its founding member, The Hong Kong and Shanghai
Banking Corporation Limited, which was established in 1865 in Hong Kong and Shanghai to
finance the growing trade between China and Europe. Thomas Sutherland, a Hong Kong
Superintendent of the Peninsular and Oriental Steam Navigation Company helped to establish
this bank in March 1865. He realized that there was considerable demand for local banking
facilities both in Hong Kong and along the China coast. Then, as now, the bank's
headquarters were at 1 Queen's Road Central in Hong Kong and a branch was opened one
month later in Shanghai. Throughout the late nineteenth and the early twentieth centuries, the
bank established a network of agencies and branches based mainly in China and South East
Asia but also with representation in the Indian sub-continent, Japan, Europe and North
America.
The post-war political and economic changes in the world forced the bank to analyze its
strategy for continued growth in the 1950s. The bank diversified both its business and its
geographical spread through acquisitions and alliances.
HSBC Holdings plc, the parent company of the HSBC Group, was established in 1991 with
its shares quoted on both the London and Hong Kong stock exchanges. The HSBC Group
now comprises a unique range of banks and financial service providers around the globe. The
HSBC Group's international network comprises some 7,000 offices in 82 countries and
territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.
HSBC maintains one of the world’s largest private data communication networks and is
reconfiguring its business for the e-age. Its rapidly growing e-commerce capability includes
the use of the internet, PC banking over a private network, interactive TV, and fixed and
mobile, including wireless application protocol or WAP-enabled mobile, telephones.
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Through a global network linked by advanced technology, including a rapidly growing e-

commerce capability, HSBC provides a comprehensive range of financial services: personal,
commercial, corporate, investment and private banking; trade services; cash management;
treasury and capital markets services; insurance; consumer and business finance; pension and
investment fund management; trustee services; and securities and custody services.
2.2 HSBC’s Mission and Objectives
HSBC Mission Statement
“We aim to satisfy our customers with high quality service that reflects our global image as
the premier international bank”
Objectives of HSBC
HSBC’s objectives are to provide innovative products supported by quality delivery of

systems and excellence customer services, to train and motivate staffs and to
exercise social responsibility. By combining regional strengths with group
network HSBC’s aim is to be the one of the leading banks in its principle
markets. HSBC’s goal is to achieve sustained earnings growth and to continue to
enhance shareholders value.
2.3 HSBC’s Business Principles and Values and Strategies
HSBC’s reputation is founded on adherence to these principles and values. All actions taken
by a member of HSBC or staff member on behalf of a Group company should conform to
them.. The HSBC Group is committed to five core Business Principles:
Outstanding customer service

Effective and efficient operations
Strong capital and liquidity
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Conservative lending policy

Strict expense discipline
HSBC Operates According to Certain Key Business Values:
The highest personal standards of integrity at all levels

Commitment to truth and fair dealing
Hands-on management at all levels
Openly esteemed commitment to quality and competence
A minimum of bureaucracy
Fast decisions and implementation
Putting the Group's interests ahead of the individual's
The appropriate delegation of authority with accountability
Fair and objective employer
A merit approach to recruitment/selection/promotion
A commitment to complying with the spirit and letter of all laws and regulations wherever
we conduct our business
The promotion of good environmental practice and sustainable development and
commitment to the welfare and development of each local community
Strategies
HSBC’s broad strategies can be brought into being here below. With product and imaging the
strategies are being categorized.
Brand: make HSBC and its hexagon symbol one of the world’s leading brands for customer
experience and corporate social responsibility;
Personal Financial Services (‘PFS’): drive growth in key markets and through appropriate
channels to make HSBC the strongest global player in PFS;
Consumer Finance: extend HSBC’s new business to existing customers and penetrate new
markets;
Corporate, Investment Banking and Markets: accelerate growth through enhanced capital
markets and advisory capabilities focused on the client;
Commercial Banking: make the most of HSBC’s international customer base through effective
customer relationship management and improved product offering in all the Group’s markets;
Private Banking: serve the Group’s highest value personal clients around the world, utilizing the
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investments already made;

Attract, develop and motivate HSBC’s people, rewarding success and rejecting mediocrity; and
TSR: fulfill HSBC’s TSR target by achieving strong competitive performances in earnings per
share growth and efficiency.
2.4 Banks under the HSBC Group
Many of the members have changed their name into HSBC, The Hongkong and Shanghai
Banking Corporation Limited to introduce the whole group under one brand name
HSBC Holdings acquired Midland Bank one of the principal UK

clearing banks in 1992. Headquartered in London, the bank has a
personal customer base of five and a half million, business
Midland
customers of over half a million, and a network of almost 1,700
Bank
branches in the United Kingdom. Midland has offices in 28
countries and territories, principally in continental Europe, with a
number of offices in Latin America.
Hang Seng Bank, in which Hongkong Bank has a 62.1% equity

interest, maintains a network of 146 branches in the Hong Kong
Hang Seng
SAR, where it is the second largest locally incorporated bank after
Bank
Hongkong Bank. Hang Seng Bank also has a branch in Singapore
and two branches and two representative offices in China.
Marine Midland Bank headquartered in Buffalo, New York, has

Marine 380 banking locations statewide. The bank serves over two million
Midland personal customers and 120,000 commercial and institutional
Bank customers in New York State and, in selected businesses,
throughout the United States.
Hongkong Bank of Canada is the largest foreign-owned bank in

Hongkong
Canada and the country’s seventh-largest bank. With headquarters
Bank of
in Vancouver, it has 116 branches across Canada and two branches
Canada
in the western United States.
Banco HSBC Banco HSBC Bamerindus was established in Brazil in 1997. The
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bank has network of some 1,900 branches and sub-branches, the

Bamerindus
second largest in Brazil.
Hongkong Hongkong Bank Malaysia is the largest foreign-owned bank in
Bank Malaysia and the country’s fifth-largest bank, with 36 branches.
Malaysia
The British Bank of the Middle East (British Bank) is the
largest and most widely represented international bank in the
The British
Middle East, with 31 branches throughout the United Arab
Bank of the
Emirates, Oman, Bahrain, Qatar, Jordan, Lebanon and the
Middle East
Palestinian Autonomous Area, including an offshore banking unit
(British
in Bahrain. The bank also has branches in Mumbai and
Bank)
Trivandrum, India, and Baku, Azerbaijan, as well as private
banking operations in London and Geneva.
HSBC Banco Roberts was acquired in 1997. Based in Buenos

HSBC Banco
Aires, it is one of Argentina’s largest privately owned banks, with
Roberts
60 branches throughout the country.
Hongkong Bank of Australia has 16 branches across Australia. It

Hongkong
is the flagship of the HSBC Group’s businesses there, operating
Bank of
under the name HSBC Australia, and providing a complete range
Australia
of financial services.
The Saudi British Bank, a 40%-owned member of the HSBC

The Saudi
Group, has 63 branches throughout Saudi Arabia and a branch in
British Bank
London.
2.5 HSBC International Network

The HSBC Group's international network comprises of some 10,500 offices in 82 countries.
The major entities are as follows:
Europe
Armenia 2 Greece 70 Netherlands 1
Azerbaijan 1 Hungary 3 Poland 5
Belgium 6 Ireland 14 Russia 3
Channel Islands 34 Isle of Man 6 Spain 4
Cyprus 144 Italy 5 Sweden 3
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Czech Republic 4 Luxembourg 8 Switzerland 15

France 836 Malta 64 Turkey 160
Germany 11 Monaco 2 United Kingdom 1908
Asia-Pacific
Australia 39 Indonesia 13 New Zealand 9
Bangladesh 8 Japan 6 Pakistan 4
Brunei
13 Kazakhstan 1 Philippines 24
Darussalam
China 30 Korea Republic 12 Singapore 26
Macau Special
Cook Islands 1 5 Sri Lanka 10
Admin. Region
Hong Kong 381 Malaysia 42 Taiwan 19
India 41 Maldives 1 Thailand 2
Vietnam 2
Americas
United States of
Argentina 196 Canada 282 3566
America
Bahamas 5 Cayman Islands 6 Uruguay 6
Bermuda 9 Chile 2 Venezuela 1
Brazil 1470 Mexico 1387 British Virgin Islands 3
Panama 16
Middle East
& Africa
Palestinian Autonomous
Algeria 1 Israel 4 1
Area
Angola 1 Jordan 2 Qatar 4
Bahrain 8 Lebanon 6 Saudi Arabia 75
Cote d Ivoire 1 Libya 1 South Africa 10
Egypt 16 Mauritius 14 Uganda 1
Ghana 1 Morocco 1 United Arab Emirates 16
Iran 1 Oman 5
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Country Classifications
To ensure that key resources (management time, capital, Human resources and information
technology) are correctly allocated and that the exchange of best practice is accelerated
between entities, the group has classified the countries where it operates into 3 categories: the
large, the major and the international.
These classifications are a function of sustainable, attributable earnings, the number of retail
clients, balance sheet and size of operation. A brief presentation of this classification is
shown below:
International Brand
A key part of the Group’s business strategy, announced in 1998, is the creation of a global
brand featuring the HSBC name and hexagon symbol. The symbol is now a familiar sight
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around the world. The Group has embarked on the next phase — making the HSBC brand
universally synonymous with its core values of integrity, trust and excellent customer service.
HSBC brand & corporate identity represents what HSBC wants its brand to mean to its
customer. It is derived from the group:
Corporate Character
HSBC is a prudent, cost conscious, ethically grounded, conservative, trustworthy

international builder of long-term customer relationships.
Basic Drives
HSBC’s basic drives are Higher Productivity, Team Orientation, and Creative Organization,
& Customer Orientation.
The essence of HSBC brand is integrity, trust, and excellent customer service. It gives
confidence to customers, value to investors, & comfort to colleagues.
2.6 Overview of HSBC Bangladesh
2.6.1 Brief History

The HSBC Asia Pacific group represents HSBC in Bangladesh. HSBC opened it’s first
branch in Dhaka in 17th December, 1996 to provide personal banking services, trade and
corporate services, and custody services. The Bank was awarded ISO9002 accreditation for
its personal and business banking services, which cover trade services, securities and safe
custody, corporate banking, Hexagon and all personal banking. This ISO9002 designation is
the first of its kind for a bank in Bangladesh.
The Hongkong and Shanghai Banking Corporation Bangladesh Ltd. primarily limited its
operations to help garments industry and to commercial banking. Latter, it is extended to
pharmaceuticals, jute and consumer products. Other services include cash management,
treasury, securities, and custodial service. Realizing the huge potential and growth in personal
banking industry in Bangladesh, HSBC extended it’s operation to the personal banking sector
in Bangladesh and within a very short span of time it was able to build up a huge client base.
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Currently HSBC Bangladesh is providing a wide range of services to both individual

and corporate level customers. HSBC in Bangladesh also specializes in self-service banking
through providing 24-hour ATM services. Currently HSBC Bangladesh is offering five off-
site ATM booths and five Branches, along with ATM booths, for better satisfying those
geographic segments, located at various geographical areas of Dhaka & Chittagong. Another
two branches will be opened at Uttara and Sylhet within June 2006.
2.6.2 HSBC Bangladesh Overview
Name of the The Hong Kong Shanghai Banking Corporation

Organization Bangladesh LTD
Year of Establishment 1996
Anchor Tower, 1/1-B Sonargaon Road Dhaka 1205,

Head Office
Bangladesh
Nature of the Multinational company with subsidiary group in

organization Bangladesh
Shareholders HSBC group shareholders

Savings & deposit services
Loan products
Corporate and Institutional services
Trade services & Hexagon
Products Payments and Cash Management Products
Trade services
Hexagon
Day & Night Banking
Amanah (Islamic Banking)
8 (Dhaka, Motijheel, Gulshan, Dhanmondi, Uttara &
Number of Offices
Chittagong(2), Sylhet)
Number of ATM’s 12
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Number of employees 635+
Offers full online banking from branch to branch and

Technology
from Dhaka to Chittagong.
Service Coverage & Serves individual and corporate customers within

Customers Dhaka & Chittagong.
Position of HSBC Bangladesh

Among Foreign Banks, Standard Chartered Bank is enjoying the name of the largest
multinational bank operating in Bangladesh. According to the recent Schedule Bank
Statistics, SCB shares 32% of the market share of FCB’s (Foreign commercial bank) in terms
of deposit. SCB holds the largest market share in terms of advance also among all the foreign
banks.
Market share of major Multinational Banks

SCB
22%
HSBC
11%
SCGB
43%
AMEX
10%
Others CAI CITIBANK
3% 4% 7%
Source: Schedule Bank Statistics
In comparison, HSBC Bangladesh shares only 11% of the market share of FCB’s in
terms of deposit.
2.6.3 Branches & Booths
 Dhaka Main Office (Full service branch with one ATM’s)
Anchor Tower, Sonargaon Road - Dhaka
 Gulshan Office (Personal Banking Booth with one ATM)
House # SWG -2, Gulshan Avenue, Dhaka
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 Motijheel Office (Personal Banking & Remittance office with one ATM)
1/C, Rajuk Avenue, Motijheel- Dhaka
 Chittagong office (Full service branch with one ATM)
Osman Court, 70, Agrabad – Chittagong
 Dhanmondi Office (Full service branch with one ATM)
House # 352 (old), Road # 27, Dhanmondi, Dhaka
 Amanah Finance (Full service Islamic Banking with an Amanah ATM )
House # SWG -2, Gulshan Avenue, Dhaka
Offsite ATMs
 Uttara Model Town, Uttara - Dhaka
 Mumtaz Plaza, Dhanmondi - Dhaha
 Kemal Ataturk Avenue, Banani - Dhaka
 Concord Twin Towers, Shantinagar – Dhaka
 Nasirabad – Chittagong
2.6.4 Management of HSBC Bangladesh
In Bangladesh HSBC follows a 4-layer management philosophy. These are Managers,

Executives, officers & Assistant officers. The top most authority of all the levels is the CEO.
All Managers are the departmental heads who are responsible for the activities of their
departments. They are the heads of their respective department and formulate strategies for
that department. The Executives have the authority next to managers. They are ultimately
responsible for certain activities & organizational functions. Officers are the next persons to
stand in the hierarchy list. These officers are responsible for managing the operational
activities and operating level employees. Assistant Officer (AO’s) fill the last layer of this
hierarchy; this is the entry-level position in HSBC Bangladesh. They perform day-to-day
operational activities and maintain close relationship with the end customers of HSBC.
An organizational hierarchy chart is shown below:
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Managers
Executives
Officers
Assistant Officers
Figure 4: Organizational Hierarchy
Chief Executive Committee
Figure 5: Chief Executive Committee
The organizational structure of HSBC Bangladesh is designed according to the various

service and functional departments. The Chief Executive Officer (CEO) heads the chief
executive committee, which decides on all the strategic aspect of HSBC. The CEO is the
person who supervises the heads of all the departments and also is the ultimate authority of
HSBC Bangladesh. He is responsible for all the activities of HSBC Bangladesh and all its
consequences. He administers all the functional departments and communicates with the
department heads for smooth functioning of the organization. The HSBC Chief Executive
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Committee is formed with the heads of all departments along with the CEO. Besides the CEO
the CEC is staffed with 6 more managers: Manager of Human Resources, Manager of
Services, and Manager of Financial Control Department, Chief of Personal Banking, Chief of
Corporate Banking, and Manager of Marketing.
2.7 Progress of HSBC
Deposit position
HSBC has achieved notable growth in deposits. Deposits of the Bank reached at Tk.5723
million in 2005. In 2004 deposit of bank was 4766 million. Average increase in deposit is
20%. The following table shows the deposits position of HSBC relative to other banks.
Relative Size in Relative Size in Rank in the Rank in

Year Deposit
the Industry the Group Industry the Group
2000 3,234 0.40% 9.03% 30 5
2001 3,556 0.45% 11.03% 32 5
2002 3,985 0.51% 15.01% 29 4
2003 4,365 0.57% 19.34% 29 4
2004 4,766 0.61% 22.02% 29 4
2005 5,723 0.63% 22.08 29 4
(In million)
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Deposit Growth of HSBC
6,000
5,000
4,000
Deposit
3,000
2,000
1,000
0
2000 2001 2002 2003 2004 2005
Year
Loan and Advances
Relative Size in Relative Size in Rank in the Rank in the

Year Advances
the Industry the Group Industry Group
2000 2,055 0.32% 9.00% 30 4
2001 2,456 0.36% 10.08% 28 4
2002 2,755 0.39% 10.65% 28 4
2003 3,325 0.43% 11.03% 28 4
2004 3,749 0.47% 11.59% 28 4
2005 4258 0.48% 11.78% 28 4
Progress of Loan and Advances
5,000
4,000
Advances
3,000
2,000
1,000
0
2000 2001 2002 2003 2004 2005
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Year
Foreign Trade
Foreign Relative Size in Relative Size in Rank in the Rank in the

Year
Trade the Industry the Group Industry Group
2000 28,114 2.78% 15.30% 13 5
2001 32,355 3.55% 17.06% 12 5
2002 38,000 4.62% 19.22% 11 4
2003 41,278 5.12% 21.37% 11 4
2004 45,162 5.96% 23.64% 11 4
2005 47,512 6.03% 24.48 11 5
(In million)
Progress of Foreign Trade

50,000
40,000
30,000
20,000
10,000
0
2000 2001 2002 2003 2004 2005
Year 20
2.8 Organization Structure
2.8.1. Board of Directors

Headed by the Chairman and Deputy Chairman, the HSBC Holdings Plc has 20 (twenty)
members in its board of directors position with one Advisor to the Board and one Group
Company Secretary. Their names are given in “Table 1: Names and Positions of the Members of
Board of Directors of the HSBC” (Appendix 1: Tables):
Table 1: Please See Appendix 1
The group structure chart of HSBC is given in (Figure 1: The Group Structure of HSBC)
the Appended Part (Appendix 2: Charts & Figures).
Figure 1: Please See Appendix 2
2.8.2. Foreign Correspondence

HSBC has got number of foreign correspondents to meet their daily business operations
efficiently. The foreign correspondents can be accessed through their outstanding online banking
solution software Hexagon. Hexagon can bring all the statements of transactions with foreign
correspondents within seconds. The most important foreign correspondents are, Group’s Bank in
different countries, Marine Midland Bank, HSBC itself. List of foreign Correspondence are given
in Appended Part (Appendix 1: Tables) with the ‘Table 2: List of Foreign Correspondences”
Table 2: Please See Appendix 1
2.8.3 HSBC Branches

HSBC has got eight branches in total in Bangladesh to offer its services to the customers. Of them
five are situated in Dhaka city, two in Chittagong and one in Shylet. Beside full functioning
branches HSBC has a Call Center for information about personal financial services for seven days
a week. HSBC also has seven Customer Service Centers in different locations in Dhaka and
Chittagong.
a. Functional Difference(s)
Except one branch (Amanah) there is no functional difference between branches of HSBC in
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Bangladesh. HSBC Amanah is the global Islamic financial services division of the HSBC
Group, responsible for the development of Islamic financial products for distribution to
customers of the HSBC Group. It was established in 1998 and is now based in Dubai, UAE
with regional offices in the UK, the US, Saudi Arabia, Malaysia, Indonesia, Bangladesh,
Singapore and Brunei. HSBC Bangladesh currently offers Amanah Current Account and
Amanah Import finance. The Gulshan branch of HSBC Bangladesh is the Amanah branch.
2.9 Automation/IT Systems

HSBC is a major user of advanced information technology. The Group’s IT systems are rapidly
growing their e-business channels, including use of the internet, PC banking, interactive TV, and
telephone banking via both fixed and mobile phones. HSBC maintains its own private
telecommunications network – one of the world’s largest – to deliver IT services to customers and to
staff around the world. HSBC web sites attracted 388 million visits in the first six months of 2004.
HSBC is an example of fully automated banking services. One of its exceptional automated services
is ‘Phone banking’, which is a 24 hour automated telephone banking service. ‘Phone banking’ allows
the HSBC customers can have exclusive banking services like checking balances, transferring money
between accounts, details of last five transactions, statement and cheque book ordering, paying bills,
inquiring interest rates (deposits), opening or renewing time deposit, reporting about ATM card,
enquiring foreign exchange rates, etc. HSBC offers fully functional online banking to its customers
through its five branches and ATM network. It also offers an attractive service like Easy Pay through
which any body can pay their utility bills. The PCs in HSBC office is linked with highly sophisticated
network and the IT department is in charge of continuous monitoring of the network performance and
upgrading. Through ‘Hexagon’ HSBC Bangladesh offers an elegant worldwide banking service to its
customers. Beside its automation includes electronic DC advising. By its website (www.hsbc.com.bd)
HSBC always provide all the up to date information to the people.
2.10 Major Functions, Description of Business and Details of Various Functional

Departments
2.10.1 HSBC Major Functions
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HSBC Bangladesh is now offering some attractive banking services for its customers. Key/major
areas of HSBC Bangladesh business are:
Personal Financial Services

Commercial banking
Corporate and Institutional banking
2.10.2. HSBC Business Descriptions

In this section readers will get some basic descriptions of HSBC’s business in Bangladesh.
◊ Prsonal Banking: With five branches, HSBC offers a full range of personal banking and
related financial services including current and savings accounts, personal loans, time deposits,
traveler’s cheques and inward and outward remittances.
◊ Commercial Banking: Commercial banking is a traditional strength of the HSBC Group. In

Bangladesh, HSBC is a popular choice for customers because of the Group’s international reach
and a wide range of financial services and products. HSBC has an offshore banking unit (OBU)
license and can therefore also provide foreign currency financing to qualifying customers.
◊ Corporate and Institutional Banking: Corporate and institutional banking provides dedicated
relationship management services to HSBC’s clients in major corporate and financial institutions.
The Bank’s focus is on fostering long-term relationship based on its international connections and
extensive of Asia and Asian business.
◊ Hexagon: Hexagon, a proprietary computer-based software package, provides customer with

an instant link into the HSBC Group’s international computer networks, allowing them to perform
transactions and obtain a diverse range of up-to-date information 24 hours a day, 365 days a year.
◊ Trade Services: Trade finance and related services are a long-standing core business of HSBC
based on the depth and spread of its corporate customer base, highly automated trade processing
systems and extensive geographic reach.
◊ Payments and Cash Management: HSBC is one of the leading providers of payments and
related services to financial institutions, corporate and personal customers in Bangladesh.
Underpinned by the Group’s extensive network of offices and capabilities, payments and cash
management assist companies in efficient cash management through the provision of payments,
collections, liquidity and account services.
◊ Custody and Clearing: HSBC is a leader in custody and clearing in the Asia Pacific region and
23
the Middle East. The network uses advanced securities clearing system, which was developed in-
house and provides round-the-clock online real-time access to clients’ securities portfolios.
◊ Investment banking and markets: This division together the advisory, financing, asset
management, equity securities, private banking, trustee, private equity, and treasury and capital
market activities of the HSBC Groups.
◊ Treasury and Capital Markets: HSBC’s treasury and capital markets business ranks among
the largest in the world and serves the requirements of supranational, central banks, international
and local corporations, institutional investors, and financial institutions as well as other market
participants.
◊ Amanah: HSBC Amanah is the global Islamic financial services division of the HSBC Group,
responsible for the development of Islamic financial products for distribution to customers of the
HSBC Group. It was established in 1998 and is now based in Dubai, UAE with regional offices in
UK, the US, Saudi Arabia, Malaysia, Indonesia, Bangladesh, Singapore and Brunei. HSBC
Bangladesh currently offers Amanah Current Account and Amanah Import Finance.
2.10.3. HSBC Functional Departments

The HSBC Bangladesh has the following departments, which controls the whole operations here.
The departments are listed below with their basic functions in the following table. The
departments are divided into two main groups. A. Corporate and B. Personal Financial Services
(PFS).
Table 3: Department in HSBC Bangladesh
Major Sections Department Name
PCM (Payment & Cash Management)
HTV (Trade Service)
IB (Institutional Banking)
Corporate
FIG
CNC (Custody & Clearing)
Global Market (Treasury)
PFS Credit
PFS MIS
Personal Financial Service (PFS) BI (Bangladesh International)
Front Office
MSO (Mobile Sales Office)
Other Operational Departments HR (Human Resource)
FCD (Financial Control Department)
HUB (HSBC Universal Banking)
IT (Information Technology)
NSC (Network Service Center)
Administration
CRM (Credit Risk Management)
MIC (Management Internal Control)
24
Major Sections Department Name

GPA (Group Public Affairs) Marketing
Source: Primary Data
2.10.4. The Financial Control Department

The COO (Chief Operating Officer) of HSBC directly controls the FCD (Financial Control
Department). COO also supervises other departments of the bank like HSBC Universal Banking
(HUB), Network Support Center (NSC), Administration, Information Technology (IT), and
Management Internal Control (MIC). The FCD is under taut security in the bank and it deals with
all the sophisticated information (i.e. financial planning, payments, etc.) of the bank. The primary
purpose of FCD is to maintain a rigorous financial control environment
to ensure the maintenance of proper accounting records and the preparation of appropriate
financial reports for GHQ, regulators and management
to ensure compliance with tax and company law and regulations and
to contribute to to the effective planning and control of profitability and risk through the
Asset and Liability Management Committee (ALCO) process.
FCD has got some important responsibilities. These are:
Financial accounting and reporting to the appropriate Head Office in accordance with
prescribed reporting procedure
Financial reporting as required by local regulations and law
Asset and liability performance analysis
Management accounting
Use of management information system
Co-ordination of planning
Financial planning, including capital budgeting
Cost control
Setting tax, investment and administration policy
Monitoring exchange rate and interest rate exposures and
Tax compliance and planning
FCD is especially controlled by dividing it into five sub departments within. The five sub departments
are shown in the following organogram:
25
Figure 2: Partial Organogram of HSBC Depicting FCD
COO
NSC HUB IT MIC FCD

Manager Manager Manager Manager Manager
Asset &
Treasury Back Return Payments Reconciliation Liability
Office Committee
Source: Primary Data
Brief descriptions of the above FCD sub departments have been endowed here:
Treasury Back Office

The treasury department of FCD is the treasury back office. It acts as a support function of
treasury front office that is the Capital market dealing room. The treasury back office calculates
the (CRR) Cash reserve Ratio and (SLR) Statutory Liquidity ratio and that is analyzed by the
front office and treasury deals are done. The cash reserve ratio is in BDT amount. The bank has to
maintain a minimum amount of 4% of demand and time liability. The customer deposits and
demand liabilities are taken into account for calculation. Statutory Liquidity ratio is set as 16% as
minimum to be maintained. The back office of FCD processes both the local currency and the
foreign currency deals made by front office. The treasury back office of FCD also checks the
deals and authenticates the dealing. Then the information is inputted in the HSBC Universal
Banking (HUB). The treasury back office also makes conformations with local counterparts and
sends swift messages to foreign counterparts for deals made by the front office.
Return
The Return section acts as an important support function of financial control department. The
26
department works to maintain proper Bangladesh Bank Regulatory policy. The department
maintains proper financial reports and also looks after the bank compliance with tax and company
laws. By this way the return section overviews the different sections of FCD which as a result
give optimum level of performance.
Payments
The payments section of Financial Control Department looks after the cost of operation aspects
HSBC Bangladesh. The payments department deals with appropriate bills under their proper
payments. The department allocates proper bills under the proper cost centers of the bank. The
payment section also verifies the authenticity of the bill as per bank’s policy.
Reconciliation
The Reconciliation section of FCD deals with the Nostro and Vostro balances with other banks
and entities. The section deals with HSBC’s accounts in other banks (Nostro) and other banks
account in HSBC (Vostro). The section checks the transfer of fund with different accounts. This
department settles payable and receivable balances in different accounts and informs treasury
about different account positions.
Asset & Liability Committee (ALCO)

The word ALCO stands for Asset and Liability Committee. This section of Financial Control
Department acts as a Management Information System of the bank. The department cosines all
the data in a manageable form for the authority to look into. These data helps to make managerial
decision for the top level of the bank. The asset and Liability management section segregates all
the business lines of the bank. This helps the top level to understand the different business lines
performance in specific terms. The ALCO also sets the targets to be met to the departments as per
the Group Head office and Intermediate Head office. The department reports various information
to group Head Office situated in England and Intermediate Head Office in Hongkong as per bank
policy. The department also calculates various ratios related to bank’s performance. That is why
the section maintains a high degree of secrecy, so that there is zero level of information drainage
out side the section. The section uses software like HMI, Sarasen etc. for performing their job.
27
Chapter 3: Products and Services
3.1 Products and Services at HSBC

Personal Loan
Home Loan
Car Loan
HSBC is always working with product developments.
Tax Loan Products and services from HSBC are briefly
Education Loan
shown below: Personal
Secured Loan &
Credit
28
Under Personal Financial Services

◊ ATM Service ◊ Hexagon
◊ Savings Account ◊ Phonebanking
◊ Current Account ◊ Time Deposit
◊ Car Loan ◊ Home Loan
◊ Credit Card ◊ Call Centre
◊ Personal Secured Credit ◊ Personal Secured Loan
◊ Personal Installment Loan ◊ Bangladesh International
◊ Day & Night Banking ◊ Power Vantage
◊ Traveler’s Cheques ◊ Investment Watch
◊ Corporate Employee Privilege Scheme (CEPS)
◊ Monthly Interest Bearing Time Deposit
29
Under the name My Loan HSBC offers:

◊ Professional Loan, Lifestyle Loan, Furniture Loan, Wedding Loan
◊ Student Loan ◊ Travel Loan ◊ Motorbike Loan
◊ Car Loan ◊ Home Loan
Corporate banking
◊ Corporate Credit: Overdraft, Import and Export Finance, Documents Against
Acceptance (DA)/ Documents Against Payments (DP) purchase, Long-term Loans,
Guarantees and Bonds, etc.
◊ Payments and Cash Management: Account Management Services, Countrywide
Payments/Countrywide Collections, etc.
◊ Electronic Banking: Cash Management Services, Trade Services, Salary Payments,
Information Services, Hexagon Report Writer, Offline Hexagon operationos, Hexagon
Cheque Writer, etc.
◊ Trade Services include Export Services, Import Services, Trade Express, Document
Tracker, Electronic DC Advising, etc.
Treasury Service
◊ Spot Foreign Exchange
◊ Forward Foreign Exchange
◊ Competitive Forex Rates for Remittances, Export and Import
◊ Weekly Currency Newsletter
◊ Market Outlook from our Global Desks
Amanah – Shariah Compliant Solutions

◊ Amanah Current Account
◊ Amanah Import Finance
◊ Amanah Day & Night Banking
30
Chapter 4: Industry Analysis
4.1 Industry Analysis

Industry analysis builds on customer & competitor analyses to make more strategic judgment
about a market & its dynamics. One primary objective of industry analysis is to determine the
attractiveness of a market to current & potential participants. A second objective of a market
analysis is to understand the dynamics of the market.
The need is to identify the key emerging factors, trends & threats, opportunities & strategic
uncertainties that can guide information gathering & analysis.
31
Porter’s approach can be applied to an industry, but it can also be applied to a market or sub-
market within the industry. A complete understanding of the competitive area helps to guide
strategy design & implementation.
4.2 Micro Environment of HSBC

Driving
Forces from
the
External
Environmen
t
Anticipated
HSBC’s
Moves from CCCC
Key
Competitors
HSBC
CCC
Competitors
’ Moves
Industry
Attractiveness
ess
4.3 Porter’s Five Forces at HSBC
1. Rivalry among existing competitors:

The rivalry among the competitors and the growth in the industry depends upon the intensity
of competition. A high amount of competition is observed in the banking sector of
Bangladesh. There are more than 50 commercial banks in Bangladesh that fight for there own
share of the market. The national banks have the highest banking network in Bangladesh.
They compete against the banks with their low cost of operation and government support.
32
Again, Standard Chartered bank is the largest multinational banking network in Bangladesh
that has its network in many metropolitans of Bangladesh. There are other international banks
who also take part in the competition and are aggressive in nature. This high intensity of
competition makes companies difficult to sustain in the long run
2. Threat of new entrants:
The next force highlights the possibility of new competitors entering the market. Existing
firms may try to discourage new competition by aggressive expansion & other types of entry
barriers. The banking sector of Bangladesh seriously faces the threat of new entrants.
However the threat comes from two direction. The first threat comes with the arrival of the
multinational banks and her branch expansion particularly due to the booming energy sector.
Secondly, the continuous entry of local banks with lower cost structure also pose a severe
threat to this industry.
In the context of HSBC the various new & upcoming Banks pose a significant threat, being
new entrants in the banking sector of Bangladesh. But HSBC is aware of these potential
competitors and is trying to expand countrywide to make the sector unattractive & to create
entry barrier.
3. Threat of substitute products:

This force considers the potential impact of substitutes. New products that satisfy the same
customer needs are important sources of competition including alternative products in the
definition of product market structure identify substitute forms of competition.
HSBC continuously faces the threat of various substitute products launched by its strong
competitors in the market place. For example, the launch of premiere banking by SCB poses
a strong threat on HSBC’s premium customer group and HSBC is at a condition where it
should launch an even better product. More over the various consumer credit schemes offered
by various local banks with lower interest rates and cost also pose a strong threat on the
HSBC personal banking products. Again the lower service charge at national banks also
discourages a wide group of customers to hold account in HSBC. These are some of the
threats posed by substitute products in the market place.
33
4 Bargaining power of suppliers:

The fourth force is the power of suppliers that may have impact on the producers in an
industry. Companies may pursue vertical integration strategies to reduce the bargaining
power of suppliers.
In the context of HSBC, suppliers are those customers and organizations that provide
financing to the firm via depository schemes. If the cost of financing rises, then HSBC will
have to increase the interest rate that it charges to its customer in order to remain in the
business. This may result in severe customer dissatisfaction & as a result poor profitability.
HSBC is aware of this devastating situation.
5 Bargaining power of buyers:

Finally, buyers may use their purchasing power to influence the producers or service
providers. Understanding which organizations have power & influence in the distribution
channel provides important insight into the structure of competition.
In the banking sector of Bangladesh, customers have a strong bargaining power since there a
large number of commercial banks providing similar services. Customers have a wide range
of options in deciding where to bank. They can either go for the Multinationals or turn to new
local banks for getting quality service. Others may also consider the national banks for large
credit facilities. Therefore banks have to pursue the customers with attractive interest rates
and provide them with tailor made customized services in order to attract the customer or
hunt depositors.
In the context of HSBC, the firm is more or less free from the cope of the bargaining power
of the buyers. HSBC has its own policies to carry out its operations & employees follow
those rules to deal with the customers. But too much rigidity of the prevailing policies when
to deal with the clients may under cut its client base as well as profitability. To overcome this
worst scenario – a positive & personalized approach to the needs of customer - has become
HSBC’S motto.
34
4.3 SWOT ANALYSIS
STRENGHTS:
HSBC is the leading provider of financial services

Strong corporate worldwide. With its strong corporate image and
Identity identity it can better position in the minds of customers.
This image has helped HSBC grab the personal
banking sector of Bangladesh very rapidly.
HSBC in known worldwide for its distinct operating
Distinct operating procedure. The company’s Managing for Value
procedures strategy better satisfy customers needs and also keeps
35
the firm profitable.

Everyone in HSBC from the appraiser to the top
management has to work to the same schedule toward a
Distinct schedule different aspect of the same goal, interfacing
simultaneously at all level over quite a long period of
time.
HSBC employees are one of the major assets of the
Strong employee company. The employees of HSBC have a strong sense
bonding and of commitment towards organization and also feel
belongingness proud and a sense of belonging towards HSBC. the
strong culture of HSBC is the main reason behind this
strength.
HSBC provides hassle free customer service to its client
Efficient Performance base comparing to the other financial institutions of
Bangladesh. Personalized approach to the needs of
customers is its motto.
The selection & recruitment of HSBC emphasizes on
having the skilled graduates & postgraduates who have
Young Enthusiastic little or no previous work experience. The logic behind
workforce is that HSBC wants to avoid the problem of ‘garbage in
& garbage out’. & This type young & fresh workforce
stimulates the whole working environment of HSBC.
The human resource of HSBC is extremely well thought
& perfectly managed. As from the very first, the top
management believed in empowered employees, where
Empowered Work force they refused to put their finger in every part of the pie.
This empowered environment makes HSBC a better
place for the employees. The employees are not
suffocated with authority but are able to grow as the
organization matures.
All office walls in HSBC are only shoulder high
partitions & there is no executive dining room. Any of
Companionable the executives is likely to plop down at a table in its
Environment cafeteria & join in a lunch chat with whoever is there.
One of the employees has said, “Its exciting to know
36
you may see & talk to the top management at any time.
You feel a part of things”.
DBD has tried hard to avoid communication barriers &
No communication structural bureaucracies. The little existence of
barriers authoritative barriers among the different level of
management stimulates a feeling of importance as their
work get priority over the position.
At HSBC workshops are conducted periodically. On the
Equalization workshops, all people participate as equals, with new
members free to openly challenge top managers.
At HSBC the main objective is to setting up workshops
are to remove authority from an artificial spot at the
top, & place it where the most knowledgeable people
Free exchange of are, the people closest to the operations. The free
communication exchange of ideas is reinforced by a policy of
“constructive confrontation”. Each employee is
expected to challenge ideas openly & aggressively, but
never attack an individual’s motives for presenting an
idea.
HSBC also has Management by Objectives (MBO)
everywhere. Each person has multiple objectives. All
MBO the employees must have to get the approval of their
bosses on what they are going to do. Later they review
as how well they have performed their job with their
management as well as the peer group.
The MBO makes the review a communication device

among various groups. The key to the system is a “one-
“One-to-one” meeting to-one” meeting between a supervisor & a subordinate.
In the meeting, the problems in dealing with customers
are put forward first & every one dug it to solve them.
HSBC owns the best banking and information
technology equipments in Bangladesh. It ultra modern
Modern Equipment & banking systems starting from terminal pc’s to HUB’s
technology are based on the international HSBC group standards
37
and are the latest. The Hexagon product is one of the

best examples in this context.
Visually Appealing HSBC has some of the best visually appealing branches
Facilities and office premises in Dhaka & Chittagong that highly
attracts customers attentions and customers also feel
the international environment while banking with
HSBC.
38
WEAKNESSES:
HSBC has a very narrow operating span in Bangladesh.
It has only 2 full service branches in Bangladesh situated
Narrow operating span only at Dhaka and Chittagong. Various geographic
segments are currently not availing the services of HSBC
due to inconvenient branch location or absence of
neighborhood branches.
Currently the personal banking divisions of HSBC do
No investment products not have investment products for its customers. The
banning of investment loan by central bank posses a
strong pressure to design new products.
AS HSBC is fairly new to the banking industry of
Lack of customer Bangladesh average customers lack the confidence in
confidence HSBC and judge the bank as an average new bank.
HSBC has contract workers who lack the commitment
Too many contract with superior quality service and also are pretty
workers dissatisfied as being a contract worker. This hampers
the bank’s service quality as a whole.
The remuneration packages for the entry level officers
are considerable low. Since other foreign and local
Low remuneration banks offer a more lucrative salary package, it will be
Package difficult for HSBC to attract MBA’s in future with its
current salary package.
HSBC can peruse a diversification strategy in expanding
its current line of business. The management can
consider options of starting merchant banking or
diversify in to leasing and insurance. As HSBC is one of
Diversification the leading provider of all financial services, in
Bangladesh it can also offer these services.
This is one of the most popular and emerging product in
Bangladesh which offers customers total financial
mobility. Various other banks and institutions are
currently offering this product. HSBC can also take
Credit Cards advantage of this product and grab the market share.
39
HSBC is one of the experts in acquiring various firms

Acquisition
and organizations. In Bangladesh it can also
diversify quickly by acquiring various local
established banks and increase it’s total
operation within Bangladesh rapidly.
40
OPPORTUNITIES:
HSBC is noted for its distinct operating procedures.

Repayment capacity as assessed by HSBC of individual
Distinct operating client helps to decide how much one can borrow. As the
procedures whole lending process is based on a client’s repayment
capacity, the recovery rate of HSBC is close to 100%.
This provides HSBC financial stability & gears up
HSBC to be remain in the business for the long run.
The ultimate goal of HSBC is to expand its operations to
whole Bangladesh. Nurturing this type of vision &
Countrywide network mission & to act as required, will not only increase
HSBC’s profitability but also will secure its existence in
the log run.
The top management team of HSBC is expert in banking
activities. The operating policies established by them are
More experienced & unique & unified. All the members of the team carry out
managerial know-how their management roles exhaustively. They equally
contributed to HSBC’s superior leadership, by carrying
out their unique roles. They worked well together,
respecting each other’s abilities, & arguing openly &
without any rancor when they disagree.
THREATS:
The upcoming private local & multinational banks
41
posses a serious threat to the existing

banking network of HSBC. it is expected
Upcoming Banks
that in the next few years more commercial
banks will emerge. If that happens the
intensity of competition will rise further and
banks will have to develop strategies to
compete against and win the battle of banks.
Absences of various products such as credit card,
International debit card are causing various customers
Lose of Customers to detract from HSBC. This is a serious threat for

HSBC Bangladesh.
HSBC should continuously improve its customer

service strategies and the overall service
Moderate levels of
quality needs to win the customer
Customer
satisfaction undoubtedly.
Satisfaction
This is a major problem in Bangladesh. As HSBC is a

very new organization the problem of non-
performing loans or default loans is very
minimum or insignificant. However, as the
bank becomes older this problem will arise
Default Culture enormously and the bank may find itself in a
more threatening environment. Thus HSBC
has to remain vigilant about this problem so
that proactive strategies are taken to
minimize this problem.
42
Chapter 5: General Banking under PFS

and Consumer Satisfaction
5.0 Personal Financial Services (PFS)

PFS is the most flourishing department of HSBC Bangladesh. This department basically
deals with the management of products and services offered to the individual consumers.
Within a span of only ten year HSBC PFS has grown tremendously and is still growing with
its innovative products and service offerings. The 8 branches of HSBC basically deal with the
personal banking activities and provide various accounts services to individual customers. It
basically deals with the personal banking activities and provides various accounts services to
the customers. Some of the other operations include:-
• Manages daily operation

• Plans and directs sales and marketing
• Plans for service development
• Top-level authority for customers’ dealings and transaction
• Provides required service to the customers directly
• Maintains documentation and report flow vary rapidly
• Helps in planning at field level
• Assists PFS Head in decision-making process and researches
• Assists PFS Head day-to-day work
• Keeps track and inform PFS Head in present condition of the competition in the
market
43
The departments under PFS are shown in the following diagram:
PFS
Head
Manager
Manager Manager Manager Manager Manager
Bond &
CCR Product Branches Sales ATB
ATM
Executive Executive Executive Executive

Bond & ATM Approval & Product ATB
Operations
Officer Officer Officer

Bond ATM ATB
Officer Officer Officer Mobile Sales

Operations Collection MIS Officers
CSM CSM CSM CSM CSM

DAK Branch Chittagong Dhanmondi Motijheel Gulshan
Branch Branch Booth Booth
Branch Staff Branch Staff Branch Staff Branch Staff Branch Staff
Team Team Team Team Team
Figure: Structure of Personal Financial Services Department
44
5.1 Consumer Confidence in Bank’s Strategy

Perhaps, one of the most important factors that keep a business running is the confidence of
customers towards that business. Once the customer confidence is built, the business is likely
to grow in size and profits. Therefore, customer confidence related to the expectation
fulfillment is an extremely important and critical issue facing business in the competitive
business environment of today. The same can be said for the banking industry. With the
increase in the number of banks in Dhaka alone, it can be said that banks like HSBC, have
started to focus more on the customer service and satisfaction. Based on what customers
have indicated in various banking situations, personalized and quality customer service will
provide banks with the ability to be more competitive than their counterparts. Therefore, it is
important to obtain customer input as to the services and products they desire to avoid
situations where the institution fails to live up to customer expectations due to failed
communications.
5.2 Review of Literature
5.2.1 Definition, Significance and Risks of Consumer Confidence

Consumer confidence may be defined as the consumer’s appraisal of the current economic
conditions and his expectations of future economic conditions. George Katona, the developer
of the confidence theory, suggests that two broad factors influence consumer decision to buy:
the ‘ability to buy’ and the ‘willingness to buy’. The second factor is mainly related to the
consumer confidence and relates to the consumer’s perception and assessment of the level
playing field and efficiency currently being maintained in the present and future market.
(Chowdhury and Azad)
Traditional economic factors point out that consumer spending influence the strength of the
overall economy. Therefore, consumer confidence is of utmost importance in the financial
market where consumers consists of depositors, lenders, investors, borrowers and others who
purchase financial services. However, the level of consumer confidence of financial market is
quite low in Bangladesh and most other developing countries which is why the economy of
these countries is affected as a whole. In such a case, any sudden fall in the consumer
confidence level will lead to panics and crisis that will spread in the economy like wild fire
45
and cause considerable amount of damage. Therefore, it is vital that the government along
with the Bangladesh Bank and other financial authority keep a strong watch over the
confidence level.
Consumer Confidence increases when the customers have a positive perception towards the
particular product or service. A satisfied consumer will always come back wanting more and
choosing the product or service over its competitors. However, apart from the quality of the
service in the financial industry, there are other factors that affect the level of confidence.
Below is a list of typical risks that a consumer can face in the financial service area.
( Chowdhury and Azad 2006)
a) Prudential Risks: in which a financial entity collapses and consumers lose their
deposits. Although rare in Bangladesh, two banks, the Bank of Credit and Commerce
International (BCCI) and Bangladesh Commerce and Investment (BCI) collapsed as
the central bank (Bangladesh Bank) have collapsed.
b) Misconduct Risks: which arise from fraud, deliberate mis-selling or failure to

disclose relevant information, which may be broadly termed as moral hazard and
asymmetric information problem. This is a common problem in Bangladesh where
corruptions at the high levels are eminent. Misconduct risks include:
Counterfeiting of Currency Notes:
One of the biggest problems is the rise of counterfeiting money which like a computer
virus damages the monetary system from within. There has been a drastic increase in
counterfeit currency which rose from BDT 1.4 million in 2004 to Taka 3.8 Million in
2005.
Loan Default:
The most important indicator used to identify problems with safety and soundness of
financial sector in Bangladesh is the percentage of non-performing loans (NPLs) to
total loans of banks. Even though there have been improvements in the ratio of Gross
NPL to the total loans, the Nationalized Commercial Banks (NCB) and the
Development Institutions (DFI) still manages high percentage of loan default. This is
mainly because of the fact that they maintain loan with poor appraisal, inadequate
follow-up and supervision and poor quality of collaterals. This makes the loans more
46
of a burden on the institutions’ portfolio where bad loans are hard to write off due to
loopholes in legal complications or bad collaterals.
Moreover, the loan default is a serious injustice to the banking system since borrowers
who are consistent and timely in their loan payments face a higher implicit rate of
interest on their loan than those who default. This is because the defaulters enjoy the
debt rescheduling and interest remission that in the long run lowers the cost of capital.
Capital Shortfall:
Capital adequacy is intended to protect the depositors from the potential shocks of
losses that a bank might incur. It helps absorbing major financial risks like credit risk,
foreign exchange risk, interest rate risk and risk involved in off-balance sheet
operations. Banks in Bangladesh are to maintain a minimum Capital Adequacy Ratio
(CAR) of not less than 9.0 percent of their risk-weighted assets (RWA) with at least
4.5 percent in core capital or Taka 1.0 billion, whichever is higher.
Unfortunately, the CAR of NCB and DFI continue to remain below the require
standard while the Private Commercial Banks (PCBs) and the Foreign Commercial
Banks (FCBs) maintained CAR of 9.5 and 24.6 percent respectively.
Capital Flight:
Capital flight is a situation where capital seeks investment outside the home country.
Since capital is being illegally transferred abroad, it is normally interpreted to reflect a
low level of investors’ confidence in the domestic economy. In the case of
Bangladesh it is also underpinned by the existence of a hidden economy. According to
researchers it has been found that on average, around $176 million/year fled
Bangladesh according to the method of World Bank and Erbe, $77 million/year by
Cline’s method, and Cuddington’s method gives an amount of around $14 million a
year. There can be many means of capital flight which includes: 1) carrying foreign
exchange out of the country in a suitcase, (2) investing proceeds from smuggling
directly abroad (3) over-invoicing of imports and under-invoicing of exports (4)
understating indenting commission and holding the same outside the country (5)
corruption by government officials and politicians.
47
c) Complexity Risk: financial products and services are gradually becoming complex
and there is real risk that consumer fails to understand a product or assess its
suitability.
d) Performance Risk: investment may not deliver the expected return to the investor
depending on market environment or the particular product.
e) Access to restore: without appropriate and affordable options of redress, when the
market fails for whatever reason, consumer may lose their investment without hope
for return. For instance, investors losing money on account of 1996 share market
scam could find little or no restore for their suffering.
5.2.2 Taking measures for improving consumer confidence in the financial sector
In order to improve the consumer confidence in Bangladesh, the government and BB took
certain measures, both legislative and regulatory, which aimed not only to safeguard
consumers, but to also enhance the efficiency and soundness of the financial sector and to
develop the missing markets and institutions that were required to cater customer needs.
Below are a list of such important measures introduced by the Bangladesh Bank and the
Securities and Exchange Commission.
a) Prevention of counterfeiting of notes: The main factor of decreasing the incline
of counterfeit notes is to take the action at the ground level. The shopkeepers should
play their part to keep a careful eye for such notes and incase of any information
should report to the banks. Moreover, with a view to curbing the incidence of
counterfeiting and assessing measures against spread of forged currency notes, the
Department of Currency Management and Payment Systems of the Bangladesh Bank
holds regular meetings with the representative of concerned ministries and agencies.
b) Prevention of money laundering: Under the Money Laundering Prevention Act
initiated in Bangladesh in April 2002, illegal acquisition of assets and the acts of
transfer, transformation and concealment of such assets are identified as money
laundering offences punishable with prison sentences from six months to seven years,
along with fines up to twice the amount involved in money laundering. The Act
entrusts the responsibility of its implementation and enforcement with the Bangladesh
Bank, and makes it mandatory for banks, financial institutions and other entities
engaged in financial intermediation to maintain customer identification and
48
transaction records, and to furnish to the Bangladesh Bank such information as it may
prescribe for identification, investigation and prosecution of money laundering
offences. The Bangladesh Bank has issued guidelines to banks and financial
institutions for identifying and reporting unusual/suspicious transactions to the Money
Laundering Prevention Department in the Bank. Suspicious transactions with prima
facie evidence of money laundering offences are referred to the Anti-Corruption
Commission or the Police authorities for formal investigation and eventual
prosecution under the new law, where necessary with court orders for freezing or
seizure of the assets involved.
c) Free floating of Taka: There has been a incline in growth of inward remittances
and checking capital outflow due to the introduction of free floating exchange rate
regime for Taka in May 2003. This has helped to maintain an exchange rate of taka
that is consistent with the country’s economic progress.
d) Electronic Securities: One step to reduce the investor’s risk associated with paper
certificates was to introduce in January 2004 the script-less electronic securities
transaction through Central Depository Bangladesh Limited (CDBL).
e) Facilitating investor’s diversification: In order to assist investors’
diversification, 5-year and 10-year Bangladesh Government Treasury Bond has been
enlisted for secondary trading in Dhaka Stock Exchange from January 1, 2005, which
are known as extra coupon bonds and initially issued through open market operations
(auctions) conducted by the Bangladesh bank.
f) Statutory liquidity requirements: Statutory liquidity requirement (SLR)
imposed by the Bangladesh Bank serves simultaneously as a monetary policy tool and
as a safeguard against possible failure of banks to cash disbursements on demand by
the depositors. At present SLR is set at 18% of demand and time liabilities for
scheduled banks and 10% for Islamic Shariar Banking.
g) Deposit insurance: A depositor of a scheduled bank in Bangladesh is insured up
to a loss of Taka 0.1 million under Bank Deposit Insurance Act 2000, to be paid to
them within ninety days following liquidation of a bank.
h) Checking misappropriation of deposits: Periodically, Bangladesh Bank alerts
the banks through circulars, to take preventive measures to check any
misappropriation of depositor funds by bank officials or by others by performing
rigorous internal control system check. If any offenders are caught, the right
disciplinary measures must be taken.
49
i) Customer Complaint Cell: All the banks in Bangladesh have been advised to
open a Complaint Cell which allows them to know first hand whether the customer
has any problems or not. This allows them to fid out if the customers are satisfied
with their services. A complaint page on the BB website has been started too.
j) Representation in board: The Bank Company (Amendment) Act 2003 provides
for two independent directors representing the depositors’ interest among the
maximum of 13 directors in a bank board.
k) Capital adequacy requirement: Capital Adequacy seemed to be a great problem
in NCBs and DFIs whose CAR were well below the required amount of Taka 1
billion or equivalent to 9% of risk weighted assets, whichever is higher. TAs
mentioned earlier all scheduled banks in Bangladesh are required to maintain capital
amounting Taka 1.00 billion or equivalent to 9.0 percent of risk-weighted assets,
whichever is higher. The PCBs and FCBs, on the other hand were well above the
requirement.
l) Loan classification and provisioning: Bangladesh Bank has prescribed loan
classification and provisioning criteria for banks and non-bank financial institutions in
line with international standards.
m) Exposure limits: In order to prevent concentration of bank loans among limited
number of borrowers, single borrower exposure limit has been prescribed by the
Bangladesh Bank, including funded and non-funded facilities, which is now set at 35
percent of the capital of a lending bank. Funded facility is however restricted to 15
percent of a bank’s capital.
n) Risk management: Internationally there are five core risks areas recognized in
the banking which are credit risks, asset and liability risks, foreign exchange risks,
internal control and compliance risks and money laundering risk. Some of these risks
have been discussed in the previous section. Recently, due to deregulation and
globalization of banking business, banks are now exposed to diversified and complex
nature of risks. Therefore, to maintain a competitive and efficient risk management
system, the Bangladesh Bank has issued guidelines for banks to follow to manage
these risks.
o) IT security: In order to ensure security in IT setup as well as in IT operation and
to protect the interest of the clients, Bangladesh Bank has issued guidelines on
information and communication technology for banks and financial institutions. These
50
guidelines are intended to provide a base to develop banks’ and financial institutions’
own IT policy and security standards.
p) Criteria for appointment of chief executive and board members: To be
efficient, banks must have a strong internal structure that is lead by responsible, well
qualified and efficient chief executive and board members. Therefore, ‘Fit-and-
proper’ test criteria have been introduced by the Bangladesh Bank for approving
appointments of directors, chief executives and advisers of private banks.
q) Information disclosure: One of the major factors that led to the downfall of
consumer confidence in Bangladesh was due to the fact that information was not
presented in a timely, transparent and symmetrical manner. In order to improve the
quality of information, the following steps have been taken by the authorities.
• Disclosure requirements of financial information for banks have been
substantially enhanced by the Bangladesh Bank prescribing revised forms and
guidelines for preparation of financial statements as per the International
Accounting Standards (IAS) with effect from end December 2003.
• The Securities and Exchange Commission made the preparation and presentation
of financial statements as per IAS and statutory audit as per International
Standards of Auditing (ISA) mandatory for the listed companies still earlier from
the year 2000.
• To ensure compliance with international accounting and auditing standards and
reflection of the correct state of affairs of the company, rules have also been
framed requiring the financial statements of the listed companies to be audited by
partnership audit firms of at least two partners each having not less than seven
years experience.
• The Commission is also empowered to direct the company, whose financial
statements do not reflect the correct state of affairs, to get the financial statements
audited by a Commission-appointed auditor at company’s costs.
r) Inspection and surveillance: Bangladesh Bank conducts two types of inspections

of banks:
• Comprehensive inspection which aims at evaluating the performance / conditions
of banks including their compliance of rules and regulations under the annual
inspection program prepared well ahead of each calendar year.
51
• Special inspections which are conducted on banks on specific / particular issue(s)

as well as to investigate complaints received from the depositors, general public or
institutions. The special inspections thus provide a mechanism to restore
consumer problem in the banking sector.
s) Credit rating for raising capital: In order to bring transparency in investment in
the banking sector and safeguard the interest of concerned investors, Bangladesh
Bank made it mandatory to include credit rating report for banking companies floating
shares through IPO at par like shares issue able at premium or right share There are
two credit rating firms now in operation in Bangladesh.
• Credit Rating Information and Services Ltd.(CRISL)
• Credit Rating Agency of Bangladesh (CRAB).
Chapter 6: Findings & Recommendations
6.1 Findings
While preparing the report we were done a questionnaire survey. Thirteen questions were
asked to the PFS’s (Personal Financial Services) clients. Due to limitation, only 25 clients
52
were asked and they were chosen randomly. The collected opinions and analysis were as
follows:
1. Why are you maintaining account with HSBC?

Frequenc 12
Percent
y
9
To get better services 10 40
Frequency
Good trust ship than other banks 8 32 6
HSBC always maintained

3
5 20
good liquidity
2 8 0
None of these
Total 25 100
Figure: Reason for maintaining account
When the clients were asked why they prefer HSBC to maintain their accounts than other
banks, 40% told that they are looking for better services, 32% customers’ supports for
good trust ship of HSBC than other banks. A little bit 20% voted for the good liquidity
maintain by the bank while only 8 % showed some other reasons.
2. Which services are you getting from HSBC’s PFS?
Frequenc Perce
y nt
Maintaining deposit account 4 16
Country wide collection 6 24
Payments 8 32
Hexagon 4 16
Salary processing 3 12 Deposit account collection
Total 25 100 Payments Hexagon
Salary processing
Figure: Preferable service of PFS
When the respondents were asked that which services they were enjoying from HSBC’s
PFS, 16% respondents support for maintaining deposit account. A high percentage (32%)
voted for the payments and (24%) voted for the countrywide collection. Hexagon (16%)
service was not so poor. This service was satisfied to the users.
3. Is PFS Operation always fulfilling your Expectations?
53
12
Frequency Percent
Yes 12 48 10
Not always 5 20
8
Frequency
Very often 7 28
6
No 1 4
Total 25 100 4
0
Yes Not Very often No
alw ays
Figure: Customer expectation about PFS
In the above table, a high percentage (48%) customers voted that PFS’s operation always
fulfill their expectations. An average percentage (28%) voted that PFS’s operations very
often fulfill their expectations. 20% said that PFS’s operations not always fulfill their
expectations and very poor percentage (4%) voted that the PFS’s operations no fulfill
their expectations.
4. Rate about the service quality that you are getting services from HSBC’s PFS?
10
Frequency Percent 8
Frequency
Excellent 9 36 6
4
Good 7 28 2
Average 7 28 0
Excellent
Average
Good
satisfactory
Not satisfactory 2 8
Not
Total 25 100
Figure: Rating of PFS services
54
The table shows the rate from the customers for the services of HSBC’s Personal
Financial Services. Among the respondent about 64% rated the service quality of HSBC’s
Financial Services as excellent and as good. A few percentages (28%) of customer told
that the service quality was average. Only (8%) voted for not satisfactory because they
were not getting good services & good relationship with this bank. A few of respondents
told that they were always getting delay collection & delay payment salary from the bank.
5. How quickly PFS staff response to solve your problems?
Frequenc 10
Percent
y 8
Very quickly 6 24
Frequency
6
Within one week 4 16
4
Within two week 10 40
2
More than two week 5 20
0
Total 25 100 Very Within Within More
Figure: Problems solved by PFS quickly one tw o than tw o
w eek w eek w eek
According to survey, 40% of
customers give their opinion that within two weeks Personal Financial department solved
their problems. Only 16% told that their problems were solved within one week by PFS.
Few customers voted for very quickly and more than two weeks.
6. What types of benefits do you receive from CWC (Country Wide Collection)?
Frequenc Perce 10
y nt 8
Cheque honors within
Frequency
6
very short period of time 3 12
4
Receive better information 6 24
2
Improve Cash flow 7 28
0
No benefit 9 36
Total 25 100
Figure: Benefits from Country Wide
Collection
55
According to survey, 36% customers said that no benefit received from this service and
28% percentage customers give their opinion that PFS operation improves cash flow. A low
percentage (24%) voted for receive better information and very poor percentage of (12%)
voted for the cheque honors within very short period of time.
7. Why have you Chosen HSBC’s Electronic Banking (Hexagon)?
Frequenc Perce
16
y nt 14
To get account information 4 16 12
Frequency
10
To get fund transfer facility 1 4 8
6
To get Trade Service 4
2
facility 4 16 0
All of these 16 64
Total 25 100
Figure: Reason for choosing Hexagon
When the clients were asked that why they were chosen HSBC’s electronic banking
(Hexagon), a high percentage (64%) voted for all of these reasons, only (16%) voted for to
get trade service facility at HSBC. A few people (16%) said to get account information and
only 4% to get fund transfer facility.
8. Are you getting better benefits from “Hexagon” product?
Frequency Percent 10
Yes 9 36 8
Frequency
Not always 10 40 6
Very Often 4 16 4
No 2 8 2
Total 25 100
0
Figure: Benefits from Hexagon Yes Not Very Often No
always
products
56
When the respondents were asked were they getting better benefits from “Hexagon”
product, 40% of customers give their opinion that they were not always getting better
benefits from “Hexagon” product. On the other hand, 36% voted for the better benefits
from “Hexagon” product. An average percentage (16%) voted that they were very often
getting better benefits from “Hexagon” product. A little bit (8%) respondents supported
for “not get better benefits” from Hexagon product.
9. Are you satisfied with the services of Hexagon CheqWriter?
Excellent service 5 20
15
Frequency
Good service
2 8
10
Average service
1 4 5
Not satisfied
17 68 0
Excellent Good Average Not
Total 25 10 satisfied
0 Figure: Customer Satisfaction about CheqWriter
When the customers were asked were they satisfied with the services of Cheqwriter, very
few customers (28%) rated the service of Cheqwriter as excellent or good. 4% voted for
average while a high percentage (68%) of respondent remarks that they were not satisfied
with the service of Cheqwriter.
10. If you are not fully satisfied, why?
Frequenc Percen
12 y t
Not secured 10 5 20
Need more knowledge
8
Frequency
7 28
Both are the reason
6
11 44
None of all 4
2 2 8
0
Total 25 10
Need more
secured
Both a
knowledge
None
Not
57
Figure: Reasons for not satisfied of CheqWriter

Among the respondent who were not satisfied with the service of Cheqwriter, 44% of
them think that the Cheqwriter was not so secured and they need more knowledge about
it. 20% of customers rated the service as not so secured and 28% said that they need more
knowledge.
11. Is it possible by “Hexagon” to provide you better services than normal banking activities
in case of salary transfer?
15 Frequency Percent
Figure:
Yes 12 5 20
Not always Hexagon service
14 56
frequency
9
Very often in case of salary
6 4 16
No transfer
3 2 8
Total0 25 100
Yes Not alw ays Very often No In the above table, we find that a
high percentage (56%) voted that
“Hexagon” not always provide better services in salary transfer. A moderate percentage
(20%) voted for the “Hexagon” to provide their better services in salary transfer. A little
bit (16%) percentage voted for the “Hexagon” to provide very often services in case of
salary transfer and only (8%) voted for the negative opinion.
58
12. Do you get extra ordinary facilities from Cash Management’s Cash Pick-up & Delivery
Services?
Yes 3 12 10
8
Frequency
Not always
6 24 6
Very often
4
12 48
No 2
4 16 0
Yes Not Very often No
Total 25 100 alw ays
Figure: Facilities from Cash Pick-up & Delivery service

When the respondents were asked did they get extra ordinary facilities from Cash
Management’s cash pick-up and delivery services, a high percentage (48%) voted for
“very often”, very few (12%) told that they get this kind of facility and a few (16%) told
that they do not get this kind of facility.
13. How would you rate Cash Management service to you?
Frequency Percent
10
Excellent 3 12
8
Good
8 32
Frequency
6
Average
9 36 4
Poor
5 20 2
Total 25 100 0
Excellent Good Average
Figure: Service quality of PCM according to
the customer
In response of the question, 12% customers told that the service was excellent; a high
percentage (68%) customer voted that the service was good and average standard.
However, 20% of them told that the service quality is poor.
59
6.2 Cross Tabulation

We have some interrelated questions. Therefore, we developed cross tabulation for some
interrelated questions.
How would you rate Cash Management service? Vs. Which services are
you getting from HSBC’s PFS?
How would you rate Personal Financial

service? Total
Excellent Good Average Poor
Maintaining 1 3 4
- -
deposit account 25% 75% 100%
Which Country wide 1 1 4 6
-
services are collection 16.67% 16.67% 66.67% 100%
you getting 3 2 3 8
Payments -
37.5% 25% 37.5% 100%
from HSBC’s 2 2
Hexagon _ 4
PFS? 50% 50%
2 1 3
Salary processing - -
66.67% 33.33% 100%
3 8 9 5 25
Total
12% 32% 36% 20% 100%
60
Question 2 Vs. Question 13: The above table is a cross tabulation between
different types of services the respondents are enjoying and the rating they gave to cash
management service. Clearly, there was a difference in the level of satisfaction to various
services provided by HSBC. The table reveals that one fourth of customers who were
maintaining deposit account in the bank rated the performance of cash management service
as good and three fourth as average. But no one was to found to call the service as excellent
or poor.
Among the respondents who are enjoying country wide collection three fourth (67%)
rated Personal Financial service as average, while equal number (16.67%) said it was
excellent and good and no one said that it was poor. Similarly equal number (37.5%) of the
respondents who maintaining payments with HSBC’s PFS called the service as good and
poor. Only 25% said that it is average and no one rated it as excellent. Equal number of
customer said that “Hexagon” is good and poor and no one rated it excellent.
Overall, most of the respondents (68%) rated the PFS service as good or average,
while reasonably by few (32 %) rated it as excellent and poor.
Why are you maintaining accounts with HSBC? Vs. Is PFS Operation
always fulfilling your Expectations?
Is PFS Operation always fulfilling your

Expectations
Total
Not Very
Yes No
always often
Why are 3 3 4 10
To get better services -
30% 30% 40% 100%
you
Good trust ship than other 5 2 1 8
-
maintaining banks 62.5% 25% 12.5% 100%
HSBC always maintained 2 3 5
accounts -
good liquidity 40% 60% 100%
with
HSBC? 2 2
None of these - - -
100% 100%
61
25
12 5 7 1
Total 100%
48% 20% 28% 4%
Question 1 Vs Question 3: In the above table, we find that 30% of the

respondents who choose to keep their accounts with HSBC in order to get better services
were fully satisfied with the bank’s performance, while around 40% were satisfied very often,
and no were found to be unsatisfied.
Again among customers who preferred HSBC for good trust ship than other banks,
most (about 62.5%) of them said that their expectations were always fulfilled by PFS’s
operation, while 25% remarked that they found their expectations fulfilled not always. Only
12.5% found to be unsatisfied.
Among the people who were found to report that HSBC always maintained good
liquidity, 40% percentage were always satisfied and 60% were very often satisfied. No one
was found to be unsatisfied.
Overall most of (48%) of the respondents think that HSBC’s PFS operations had
fulfilled their expectations, 20% find their expectations fulfilled very often, while only a little
(only 4%) are not satisfied at all.
Why have you Chosen HSBC’s Electronic Banking (Hexagon)? Vs. Are you getting better
benefits from “Hexagon” product?
Are you getting better benefits from

“Hexagon” product?
Total
Not Very
Yes No
always often
Why have you To get account 2 1 1 4
Chosen HSBC’s information 50% 25% 25% 100%
To get fund transfer 1 1
Electronic - - -
facility 100% 100%
Banking
To get Trade Service 1 - 3 4
(Hexagon)?
facility 25% 75% 100%
62
5 9 1 1 16
All of these
31.25% 56.25% 6.25% 6.25% 100%
9 10 4 2 25
Total
36% 40% 16% 8% 100%
Question 7 Vs Question 8: The table shows that half (50%) percentage of customers
who are choosing Hexagon to get account information remarks that they were always getting
better benefits from Hexagon. 25% respondents said that they were not always get benefit
from Hexagon product while another 25% told that they are not getting any benefit from
Hexagon.
Among the respondent who are choosing Hexagon to get fund transfer facility, 100%
of customers respectably said that they are satisfied Again among the customers who choose
Hexagon to get trade service facility, a high percentage (75%) said that they were very often
getting better benefits from Hexagon. A few percentages (25%) were get better benefit.
Among the respondents who were choosing Hexagon for all of the above reasons
almost 56% said that they were very often getting better benefits from Hexagon. 31%
customer remarks that they were get better benefits from Hexagon while only 6.25%
respondent said that they were not getting better benefits from Hexagon products.
Overall 36% of the respondents’ said that they were getting benefits from
Hexagon while only a few (8%) said that they were not getting any benefits from Hexagon
products.
63
6.3 Implications
It is found from the analysis that about 32% customers were very satisfied with the
services of Cash Management of HSBC because it provides quicker service than any other
local commercial banks. Only 11% customers were not satisfied. They said that the service
charge is too high than other banks. 32% of customers are chosen payment services among
the products of Cash Management to transfer fund in remote area, while 24% chosen
countrywide collection. & about 16% voted for HSBC were electronic banking Hexagon. So
we can say that the service quality of PCM department was very good. 36% respondents said
that they were always getting better benefits from Hexagon products while only 8% told that
they were not getting any benefits from Hexagon products. 68% customers were not satisfied
with the services of CheqWriter. Only 20% were satisfied. So they had to improve a lot in
this service. 40% customers told that PCM department solved their various problems within
two weeks, 16% told that within one week their problems were solved while 20% said that
their problems were solved by more than two weeks. To get customer satisfaction, PCM
department had to be quick to solved customer problems. Then they will get more customers.
64
Chapter 6: Conclusion
6.1 Recommendations for HSBC to enrich general banking through

improving their customer service
HSBC is one of the most flourishing Banks of Bangladesh with wide growth opportunities in
the industry. The key to success for HSBC is to maintain a steady growth in its customer base
which can be achieved only by improving consumer confidence. In the previous section,
measures for improving the financial sector as a whole have been discussed. In this section, a
list of recommendation is presented based on the findings of the survey conducted on HSBC
customers:
a) Improving their services: As an intern for the Personal Finance Department, I

have noticed four main areas where HSBC can improve their services.
• Delivery of ATM cards: Currently, it takes more than two weeks for a new
customer to acquire his ATM card while the other competing banks produce their
ATM cards within 2 days. HSBC needs to stop issuing their card from Hong Kong
and instead should try to make arrangements to produce new cards locally. As an
intern for the ATM department, I have seen first hand that the customers faced a
lot of difficulties in the absence of the ATM card. HSBC needs to undertake better
steps to prevent this kind of dissatisfaction.
• Launch of Credit Cards: Currently, HSBC do not provide any credit card facilities
in Bangladesh. One of the major reasons is due to the cost of operation it would
take to run the credit card department. They have a joint venture with Prime Bank
to produce credit cards which is still quite inefficient when compared to the other
credit cards offered through competing banks. Many local and foreign banks are
currently providing these services and are satisfying customer needs more widely.
According to my experience at HSBC, out of 20 calls received a day, at least 5
65
customers enquire about credit card. HSBC need to step up their services and take
advantage of a potential market.
• Locker Services: Another thing that I have noticed while working as an intern,
was that a huge amount of customers demanded locker services which was yet not
available in HSBC. This is another potential target market that HSBC should take
advantage of. People are aware of HSBC’s corporate image which is why they
will feel more secure for storing their treasured belongings with them.
• Inefficient Mailing Network: One of the most common complaints that I have
faced was that many customers don’t receive their financial mails in time. This
includes the ATM cards, credit cards, statements, check books, etc. Therefore,
HSBC should strictly monitor the courier services that are engaged in delivering
mails and documents to ensure proper delivery of mails and documents.
b) Improving Market Research: The management of HSBC should regularly

administer marketing research activities in order to keep a regular track of satisfaction
levels. Regular research should also be conducted to find out customer expectations
about various service aspects. As customer expectations and satisfaction are not static
figures, regular research at sufficient intervals should be conducted.
c) Managing the Complaints: As mentioned earlier, the BB has made it mandatory

to have a complaint box so that the banks know where they stand. HSBC should
actively manage the complaints of various customers and encourage customers to give
feedback about the services. The management should collect, document complaints,
use that information to identify dissatisfied customers, correct individual problems
where possible and identify common service failure points.
d) Focusing on existing relationships: The bank should focus more on existing

customers in order to build strong and loyal relationship with them as most satisfied
customers recommends the bank to friends and relatives. Thus the power of
relationship will foster positive Word of Mouth Communication and will attract new
customers at a lower cost.
66
e) Employee Trainings: Employee trainings and workshops should be administered

in order to give them knowledge and professionalism in customer interactions. With a
more professional base, employees can better satisfy the customers.
f) Individual Attention & Care: Individual attention should be given to customers

in order to better understand their needs and better satisfy them. The HSBC Premier
services focuses on individual care and offers the best service for their specialized
customers.
g) Deploying new Branches and ATM Hubs: New branches should be constructed
in Dhaka city satisfying more geographic segments especially towards Mirpur area,
since customers from that area has to come all the way to Gulshan for their financial
needs. Likewise, more ATM machines should be positioned tactically around the city
and country. This has two benefits since the convenience raises the satisfaction of the
customers and secondly it acts as an advertisement board where customers can gain
access to information. .
h) Reconsider interest rates on Savings: Majority of the customers suggested that

the savings rates should be redesign as most of the customers were currently
dissatisfied with the savings rates. HSBC should restructure the interest schemes of its
savings product to attract more valuable customers.
i) Process Management: The actual procedures, mechanisms and flow of activities

at customer service should be well-managed and structured in order to form a good
experience of the service in the minds of customers. As the services of the Bank are
complex in nature, the employees should provide adequate guidance to customers in
order to avoid service failures. Thus the whole process should follow a broad service
philosophy, which is tailored to customer needs.
6.2 Conclusions
HSBC is a global banking and financial services organization headquartered in London. The
group’s international network comprises more than 10000 offices in 82 countries and
67
territories, operating the Asia Pacific region, Europe, USA, and Middle East & Africa. HSBC
Group is represented in Bangladesh by its subsidiary bank HSBC, Bangladesh. I had the
opportunity to work for this banking giant during my internship program. I was placed at the
customer service department of HSBC Main Office, Anchor Tower. During this time I got an
opportunity to observe the overall service process of HSBC personal banking division. I also
got the scope to interact with customers and reveal their expectations and perceptions about
the bank’s services. During my interaction with customers I felt that somewhere there are
gaps between customer expectations and banks services and since the CEO of HSBC
Bangladesh has given emphasis on better customer service and more customer satisfaction,
thus the Customer service officer asked me to work on this topic.
This research has provided some interesting insight into what kind of service the
customers give importance to and what quality service they get from HSBC. It is quite
obvious from the research that the customer requirements are not fully met and they are
very dissatisfied with some of the aspects of the bank (location, saving rates, credit
services, investment services, etc.). Again the research revealed that only one third of
customers were more of less satisfied with the services of the bank and more than half
of the respondents were on the neutral side of satisfaction line. HSBC should attract this
half and bring them to the positive side of the road so that strong relationship with the
customers can be maintained.
Finally, I would say that this internship at HSBC has increased my practical
knowledge of Business Administration and made my BBA education more complete and
applied. In this report I got the opportunity to apply various tools and concepts I learned in
my BBA courses. Some such courses were Strategic Marketing, Strategic Management,
Services marketing, Consumer behavior, etc. I look forward to work as a permanent
employee of this world-class banking giant.
68

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The Enrichment of General Banking of HSBC through customer services

1.2 Origin of the Report

1.3 Objectives of the Report

1.4 Scope of the Study

Define the Problem Research objective Develop research plan

Data collection Data analysis Findings & Recommendation

Diagram-1: Effective Research

Deciding the type of Developing Research Determining the source

Research Design source of data

Primary source Secondary source

Explanatory Research Conclusive research

Diagram-2: Research Plan

1.5.1 Selection of sampling

1.5.2 Data Collection Method

- Different books, journals research paper on HSBC.

Chapter 2: Organization Overview

2.1 An Overview of HSBC Group

Through a global network linked by advanced technology, including a rapidly growing e-

2.2 HSBC’s Mission and Objectives

HSBC Mission Statement

HSBC’s objectives are to provide innovative products supported by quality delivery of

2.3 HSBC’s Business Principles and Values and Strategies

Outstanding customer service

Conservative lending policy

HSBC Operates According to Certain Key Business Values:

The highest personal standards of integrity at all levels

investments already made;

2.4 Banks under the HSBC Group

HSBC Holdings acquired Midland Bank one of the principal UK

Hang Seng Bank, in which Hongkong Bank has a 62.1% equity

Marine Midland Bank headquartered in Buffalo, New York, has

Hongkong Bank of Canada is the largest foreign-owned bank in

bank has network of some 1,900 branches and sub-branches, the

HSBC Banco Roberts was acquired in 1997. Based in Buenos

Hongkong Bank of Australia has 16 branches across Australia. It

The Saudi British Bank, a 40%-owned member of the HSBC

2.5 HSBC International Network

Czech Republic 4 Luxembourg 8 Switzerland 15

HSBC is a prudent, cost conscious, ethically grounded, conservative, trustworthy

2.6 Overview of HSBC Bangladesh

2.6.1 Brief History

Currently HSBC Bangladesh is providing a wide range of services to both individual

2.6.2 HSBC Bangladesh Overview

Name of the The Hong Kong Shanghai Banking Corporation

Year of Establishment 1996

Anchor Tower, 1/1-B Sonargaon Road Dhaka 1205,

Nature of the Multinational company with subsidiary group in

Shareholders HSBC group shareholders

Number of employees 635+

Offers full online banking from branch to branch and

Service Coverage & Serves individual and corporate customers within

Position of HSBC Bangladesh

Market share of major Multinational Banks

Source: Schedule Bank Statistics

2.6.4 Management of HSBC Bangladesh

In Bangladesh HSBC follows a 4-layer management philosophy. These are Managers,

An organizational hierarchy chart is shown below:

Figure 4: Organizational Hierarchy

Chief Executive Committee

Figure 5: Chief Executive Committee

The organizational structure of HSBC Bangladesh is designed according to the various

2.7 Progress of HSBC

Relative Size in Relative Size in Rank in the Rank in

Deposit Growth of HSBC