HSBC To Shut Branches Amid Growing Need For Digitalization

HSBC Bank USA, the Virginia-based subsidiary of HSBC Holdings (LON:HSBA) plc (NYSE:HSBC) , is planning to shut down eight branches in South Florida. The move comes as the bank wants to consolidate its local footprint amid shifting customer preferences toward online or digital banking.

Recently, HSBC Bank USA, with $4.1 billion in local deposits, filed notices with the Office of the Comptroller of Currency (“OCC”) stating that it will close several branches in the tri-county area.

The head of communications for HSBC Bank USA, Matt Klein, said that wherever customer “preferences and behaviors have changed”, the bank is reducing its presence.

He added, “We will continue to invest in new technology to deliver a better customer experience, and launch new products and services for our globally mobile clients so they can bank when, where and how they want.”

In order to meet rapidly increasing customer demand for digitalization, HSBC said in November 2019 that it was progressing toward the launch of its digital banking platform. Its digital banking platform, HSBC Kinetic, has been developed for small businesses. It is expected to be launched in the first half of 2020.

Like HSBC, nearly all banks, big or small, including Bank of America (NYSE:BAC) , JPMorgan (NYSE:JPM) and Huntington Bancshares (NASDAQ:HBAN) , are investing heavily in technology upgrades to enhance digital experience for customers.

Notably, HSBC has remained focused on profitable markets and on enhancing operating efficiency by divesting non-core businesses. While the efforts helped in lowering expenses in 2017 and 2018, total costs increased in 2019. As the company intends to strengthen its digital capabilities globally, operating expenses are likely to remain elevated in the near term.

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