HSBC’s Strategic Shift

Written by Eashan Trehan

London based banking heavyweight HSBC has recently announced a new plan to revamp its revenue model, moving towards non-interest income fee generation.

The Covid-19 pandemic has pushed central banks across the world to cut interest rates, thereby hurting banks’ ability to derive interest income. As part of its new plan, HSBC will look to charge greater fees from customers and corporate clients alike, for the various services it provides. This could likely include attaching fees to services that until now were available for free, therefore potentially driving a wedge between the bank and its existing customers who could be miffed and turn elsewhere.

Apart from its new revenue model, HSBC is continuing its restructuring efforts, sharply downsizing its headcount and aggressively cutting costs. All eyes are now on the bank’s 2020 full-year results discussion to take place in February 2021.

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HSBC to revamp business model, flip income source: report