HSBC: Data and the role of people in delivering change

Paul Lickman works in the central data function at HSBC and his main responsibility is standards and governance.

During his session at Big Data London, he took the audience on a journey back to 1941, to share a remarkable story that outlines how customer data and trust have been essential to the 180-year-old bank’s survival.

Sir Vandeleur Grayburn was the chief manager of HSBC bank in Hong Kong and when the invading Japanese forces overthrew the bank, he instructed his staff to go down to the vaults.

And down there they went – not to protect the cash or gold but the records and the ledgers which contained the details of the bank’s customers, their accounts, and the daily transactions – all of which underpinned HSBC’s operations.

“Grayburn recognised that customer data was precious. His insight was that cash and gold were fungible, in time it could be replaced, but customer data couldn’t be,” said Lickman.

“It was thanks to Grayburn’s insight and bravery that HSBC survived the war and was able to rebuild with those customer relationships. Eight decades later we’re still going strong,” he added.

According to Lickman, the challenge the bank faces now is how to embed data in its DNA like brands such as Google, Apple and Visa have. The bank operates in over 80 countries and has a huge insight into its customers and its customers’ customers.

“We get to see where companies earn their money, spend it, and invest it. We see who they hire and how much they pay. We also see what those employees spend their money on,” said Lickman.

“Google and Amazon are leaders in the personal data revolution, but we’re well placed in terms of the corporate data to leverage that information,” he added.

However, getting to that point, he admitted, was more of a challenge for a 180-year-old institution.

“We’re on a journey – we’re using data but perhaps not to its full potential,” he said, adding that the bank’s analysis indicated that it could double its market cap by embedding data better.

“So, there’s a huge opportunity there for our shareholders, customers, employers. How do we do that? Through data transformation. We want to turbocharge data implementation.”

Management buy in

He credits his boss, chief data and analytics officer Kate Platonova with putting the bank on that journey, revisiting Grayburn’s legacy by focusing on the role of people and culture to deliver change.

Platonova’s instinct, he revealed, was to start at the top and get the buy in of the board of directors and sell them her vision for data.

“They were surprised because normally it’s the directors that bring vision to the company – not the other way round. But she took the time to speak to board members individually and gain their buy in.”

Lickman added that Platonova was also successful because she didn’t go straight in and ask for money, she came with a vision of what data done right could look like. Gradually, once the vision was bought into, she asked for cash.

Platonova also realized that HSBC’s most senior personnel also needed training to work with data to make data-led decisions.

“So, we wrote a training course just for the 15 board members of HSBC,” recalls Lickman who added that this was then followed that up with data literacy training for 40,000 colleagues to improve their knowledge on data.

The data architect also engaged an external course to train an additional 1500 architects. He says that every six months staff surveys constantly reveal data analytics was the number one skill that employees want to learn more about.

Protect, connect, unlock

To drive change throughout the organisation Lickman said that the bank was implementing a strategy that comes down to three pillars: protect, connect and unlock.

Protecting data, he explained, was about looking after customer data the trust that Grayburn deployed with HSBC’s customers 80 years ago. Except now it has the advantage of AI to help it along the way. According to Lickman, on a recent inventory there were over 1,000 instances of AI being used across the bank.

“Deployment across the two biggest areas is cyber – we get 100 of billions of network events across the network. Some are nefarious and AI deals with these huge data sets.

“The other area is around anti money laundering – there are a huge number of payments – probably about 100 million payments a day we deal with – we need to mine that information to see where criminal activity is taking place,” he added.

‘Connecting’ said Lickman, was about data literacy and empowering the workforce to access data, analyse data, create things with data and make data-led decisions.

But it was unlocking the value of data, he emphasised, that will really drive the business forward and he gives an example of using AI to streamline releases in its software production.

“Each day we release about 10,000 updates in our software systems – which is essential to deliver the business and new functionality for customers and to meet regulatory demand. But it can sometimes lead to instability in the system which can lead to resiliency issues.

“We deployed AI to look at our planning changes and to risk assess changes and this has been a revelation: 95% of the changes have been identified as low risk that we know we can fast track quickly – allowing us to focus on the remaining 5% with more scrutiny.”

He adds that business value add also comes from supply chain data, estimating that HSBC is involved in 75% of all East to West transactions in some form. “As a result of that we have insight into our customers as to what is happening: What they spend money on, whether there are any delays in shipping costs. Lots of insights into the supply chain or delays in the supply chain that we can provide.”

Lickman said that the bank was also committed to becoming carbon neutral in its supply chain (Scope 3 emissions) by 2030, and that smart use of data was a critical part this strategy.

“There’s a huge amount of data there – to show what our carbon footprint is but also for our customers – we know their activities so our insight can help customers as well. Data is crucial for our business, but also crucial for saving the planet.”