HSBC Bank logo is seen in this illustration taken March 12, 2023. [Photo/Agencies]
Europe's largest bank's decision to close its international payments app could result in the loss of around 400 jobs, according to a source close to the situation.
The unnamed source told the Reuters news agency HSBC's cost-cutting decision to terminate its Zing app would likely mean layoffs at both the bank itself and at external customer support centers that employ non-HSBC workers.
London-headquartered HSBC, which is Europe's largest bank by total assets, launched Zing last January, to facilitate mobile cross-border payments. The app was aimed at winning back United Kingdom-based customers who had been using rival fintech platforms, such as the money transfer giant Wise, which HSBC saw as nimble entities that were able to undercut its transaction fees.
But the unnamed source told Reuters HSBC seemed to lose interest in its new app after Georges Elhedery took over as CEO of HSBC in September.
Elhedery, who was previously HSBC's chief financial officer, has unveiled an overhaul of the universal bank and financial services group aimed at streamlining its costs and tightening its focus, in order to make the group as a whole simpler and more dynamic.
Zing, which was set up by James Allan, HSBC's head of foreign exchange and international payments, had an accompanying debit card that ensured users could hold funds in more than 10 currencies. Customers were also able to use the app to send money in more than 30 currencies, and carry out transactions in at least 200 countries and territories.
An HSBC spokesman told Reuters: "Following a strategic review of Zing within the HSBC Group and after careful consideration, we have made the decision to close Zing and integrate its underlying technology platform into HSBC."
The spokesman said HSBC plans to focus on "increasing leadership and market share" in the areas of its business "where it has a clear competitive advantage, and where it has the greatest opportunities to grow and support our clients".
Ritesh Jain, a former chief operating officer at HSBC, wrote on a blog post on Finextra, an independent newswire and information source aimed at the financial technology community, that Zing essentially failed to perform as hoped against rival fintech platforms.
"Zing's attempt to compete directly with Wise and Revolut was essentially a 'me-too' product, struggling to carve out a unique value proposition," he wrote. "In a market where consumers expect speed, transparency, and low-cost services, merely replicating existing offerings rarely works. Zing lacked a clear, innovative edge, and without that, no amount of marketing or expansion plans could help it succeed. Banks need to understand that in fintech, it's not enough to compete in the present — you need to anticipate where the market is headed."
