Bank of China and HSBC comparative analysis Essay

From the experiences of customers with internet banking, it would be evident that the internet services of HSBC have been well established and have also been accepted as customer friendly, timely and efficient. An overwhelming three fourths customers have accepted that the security of the internet is greater than physical banking which indicates a high level of its effectiveness. It is also evident that those customers who have got accustomed to the use of the internet for banking are likely to continue with this experience. Thus where Bank of China had quite low scores for customer friendliness and efficiency at 32 and 41 % respectively, an overwhelming 81 % of the populace still wanted to continue with internet banking. The overall banking experience has been positive for 54 % of the customers of Bank of China and 67 % of the HSBC. Thus there is adequate scope for improving its services for the customer to provide them an excellent banking experience. Since banking is a personalized event, it is of essence that the customer is provided a special touch be it the individual or the corporate. Failure to do the same will lead to loss of a client which is not good for any business. As the competition in the Chinese banking space grows, it would be important to enhance the satisfaction level to the customer. The Bank of China is a well established banking financial institution, which has a tradition of almost a century of banking, It has been able to adapt to the changing environment very rapidly over the years which is evident from a past turbulent history. Despite nationalization of the banking services in China in 1949 and subsequent liberalization in the 1990’s the Bank has demonstrated admirable resilience in adapting to the changing norms and focusing on the development of services appropriate to the needs of the time. After the Chinese economy has opened, the bank has been particularly benefited as it has been able to exploit its strength of global business by integrating Chinese business needs with the global requirements. The Bank of China was the first Chinese bank to list in domestic as well as the international stock exchanges during the year 2006. (Interim Report, 2006). This will subject it to greater accountability and the management will have to conform to international standards of accounting systems with greater verification by share holder bodies. (Interim Report, 2006). The bank recorded very impressive results for the first half of 2006 with profits of RMB34,338 million and RMB19,477million, operating and net respectively. This was an increase over last year of 19. 72% and 28. 30% respectively. It is however seen that impairment losses are quite high at RMB5. 479 billion, which demonstrates increase of RMB513 million over the same period last year. (Interim Report, 2006). This is the area of concern as controlled by the state, there is a possibility of increase in this facet which will be a set back to the growth and credibility of the Bank. Internationalization is the focus of the Bank of China and it has adapted maximum international banking practices in China. The Bank is always looking for opportunities to enhance its corporate as well as financial image and in pursuance of which it has become the sole banking partner of the 2008 Olympic Games in Beijing. This to some extent will contribute to its brand image and also indicate its role towards fulfilling corporate social responsibility. (About Bank of China,. 2006). In China, the Bank has a very high reputation, being recognized internationally as the Best Bank as well as the Best Domestic Bank in China by Euromoney for a record eight times. (About Bank of China,. 2006). Apart from these many other awards are accredited to the Bank. Bank of China has a wide range of products and services for the corporate as well as the personal consumer which compare quite reasonably with that provided by HSBC. It has considerable advantage in offering foreign exchange services since it has been nominated as the lead branch and hence it obtains considerable benefits from the same. The ability of the bank to exploit its advantage is evident with its spot transaction policy to be settled on the second working day of conclusion of the foreign exchange transaction. It has various types of foreign exchange dealings, conducted by individuals the counter personnel or through the internet. (Forex, 2006). That the Bank is enhancing the efficiency and effectiveness of its services is evident from the credit card programme. BOC provides a credit card which is valid nationally as well as internationally. There is a 50 day interest free repayment period and all payments up to the provided line of credit are provided conveniently. (Card, 2006). The card can also be used for drawing cash, there is a no risk report after loss which can be given on telephone. The BOC is increasingly attempting to popularize this concept and has also tied up with various discounted retailers to provide benefit and enhance card usage. A recent introduction is a reward for increased usage of the card.(Card, 2006) Thus by spending 1 RMB, a customer gets the benefit of 1 point and for spending 1 US dollar, benefit of 8 points are given. These points can then be exchanged for various gifts including travel tickets, phone recharging and ordinary purchases based on various schemes prevalent. (Card, 2006). The application procedure has been simplified and there is a double currency facility for consumption as well as for withdrawal of cash based on the credit card. The services available through the bank being world wide, it proves of great benefit to Chinese individuals as well as business persons to hold these cards. (Card, 2006).