HSBC 2008 Annual Report Download - page 22

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
KPIs / Reconciliation of reported and underlying profit before tax
20
Brand perception
In order to manage the HSBC brand most
effectively, the Group tracks brand health amongst
Personal Financial Services and Commercial
Banking customers in each of HSBC’s major
markets. The survey is conducted on a consistent
basis by accredited, independent, third-party
organisations. A weighted scorecard of brand
measures produces an overall score for each market
on a 100-point scale, which is then benchmarked
against HSBC’s main competitors. The scores from
each market are then weighted according to the risk-
adjusted revenues in that market to obtain the overall
Group score.
In 2008, Personal Financial Services customers
judged HSBC’s brand to be 9 points stronger than its
competitors (+9), up from 6 points in 2007 and
above the 8 point target. Commercial Banking
customers judged the brand to be 6 points higher
than HSBC’s competitors (+6), the same as in 2007.
For 2009, HSBC will track brand health in more
countries. During 2008, competitors were acquired
or withdrew from certain markets, so HSBC re-
benchmarked its 2008 performance in respect of
both brand and customer satisfaction for Personal
Financial Services and Commercial Banking. For
2009, the benchmark is +4 with a target of +5 for
the former and, for the latter, the equivalent numbers
are +6 and +7, respectively.
Customer satisfaction
Customer recommendation is an important driver of
business growth for HSBC. HSBC uses a consistent
measure of customer recommendation around the
world to continue to improve the services provided
by the Group to customers of Personal Financial
Services and Commercial Banking. This
measurement is carried out by accredited,
independent, third-party organisations and the
resulting recommendation scores are benchmarked
against competitors.
The 2008 customer recommendation target for
Personal Financial Services increased from +1 to +2,
failing to meet the target of +3 by a small margin.
Commercial Banking met the target of +7 over
competitors, up from +6 in 2007.
In 2009, HSBC has adopted a new benchmark
of +1 and a 2009 target of +3 for Personal Financial
Services and a benchmark of +4 and a target of +4
for Commercial Banking.
IT performance and systems reliability
HSBC tracks two key measures as indicators of IT
performance; namely, the number of customer
transactions processed and the reliability and
resilience of systems measured in terms of service
availability targets.
Number of customer transactions processed
The number of customer transactions processed
reflects the dependency on IT in the delivery
channels that customers use to interact with HSBC.
Monitoring the volumes by channel enables the
Group to allocate resources appropriately. Overall,
the results show the desired decrease in staff-assisted
transactions. Self-service transactions increased as a
result of the redesign of the Group’s distribution
network and the continuing rollout of One HSBC
Technologies, HSBC’s project to standardise its
primary systems, products and processes. Internet
transactions unexpectedly decreased as a direct result
of lower online trading volumes in retail securities in
2008. To improve efficiency HSBC aims to manage
the rate of increase in IT transaction processing costs
to below the volume increase. The following chart
shows the 2005 to 2008 volumes per delivery
channel:
Number of customer transactions (millions)
0
500
1,000
1,500
2,000
2,500
Branch/Call
Centre-Agent
Credit
card
Internet Self-Service
Terminal
Other
e-Channels
Others
(payment,
clearing, etc)
0
500
1,000
1,500
2,000
2,500
Branch/Call
Centre-Agent
Credit
card
Internet Self-Service
Terminal
Other
e-Channels
Others
(payment,
clearing, etc)
2005 2006 2007 2008
Percentage of IT services meeting or exceeding
targets
HSBC’s IT function establishes with its end-users
service levels for systems performance, such as
systems running 99.9 per cent of the time or credit
card authorisations within two seconds, and monitors
the achievement of each of these commitments. The
following chart shows the percentage of IT services
meeting or exceeding the agreed service targets by
region. Overall, the results show a trend of
improving service performance.