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Is it just me or is HSBC (LSE:HSBA) more adept at shooting itself in the foot than most other banks? Or have they simply understood something that the rest of us have only guessed at? That “little people” are irrelevant.
In a span of less than 24 hours, the bank has announced 3,166 workers, i.e., “little people,” will be affected in a new round of cuts. To be completely accurate, the bank has explained that only 1,149 “little people” will actually lose their jobs. The remaining 2,017 will be offered new positions with the bank. Now hold that thought for a moment.
Yesterday, 22 April, HSBC Chairman Douglas Flint suggested that “less well-off customers could lose basic financial services.” For those who missed it, I offer my executive translation services. “Less well-off customers” translates to “little people.”
Lest I come across as overly-critical, I am not saying that HSBC is out to get the “little people.” I am, however, saying that there is an elite culture in the banking system, particularly evident at HSBC, to whom the “little people” are irrelevant. Let me illustrate. In his book, Crazy Bosses (HarperBusiness, May 8, 2007), Stanley Bing said something like this: “The issue is not how little your boss thinks about you. This issue is that he doesn’t think about you at all.” That’s exactly what I see at HSBC with respect to both employees and customers. Add that to HSBC’s spectacularly inept public relations sense and it’s enough to make UTM Bank (Under The Mattress) seem like the best banking alternative for all the “little people” in the UK.
This is where I make apologies to Doug Flint because he made his remarks that “We are beginning to see the industry move towards serving higher net worth individuals and moving away from the bottom of society, (my emphasis)” to try to make his point – valid or not – that increasing regulations would force the banks into such a position. Regardless, his remarks were ill-advised at best, especially in light of the soon-to-follow announcement of the disposition of the HSBC workforce this morning.
If you are still wondering how these two issues are connected, consider how the bank’s announcement about the job cuts comes across to the “little people.” The bank used the potential reallocation of 2,017 “little people” to make the loss of 1,149 “little people” seem more palatable. I’m willing to bet that I can find 1,149 people who will not find the news at all palatable. And that’s not even counting those number among the 2,017 who will be offered jobs that they may not be able to accept due to cuts in pay or relocation.
The problem was compounded when this morning’s announcement indicated that the “major revamp” is intended to allow the bank to concentrate on advice “offered to ‘Premier’ customers.” The reason for the elimination of some jobs, clearly cited in the report, is that there are “relationship managers in the retail bank who aren’t qualified to give advice . . . [to] those with at least £50 thousand in savings and investments.”
I find it incredible that a bank would make such a statement. Though HSBC would certainly argue the point, the “little people” – and the public at large – should be hearing them say that “HSBC has over 1,100 people who are not competent.” The public at large should hear the reverberation of Doug Flint’s speech in this morning’s announcement as the bank begins to shift its focus away from “little people” customers.
Flint’s comments yesterday were a foreshadowing of HSBC’s announcement this morning. He knew what the bank was about to do, but he tried to shift the blame onto the Bank of England and the FCA. I’m not saying that it’s wrong for the bank, as a business, to focus on making money for the stakeholders and investors. But I am saying that neither HSBC nor any other bank has an elitist right to rub the “little people’s” noses in it. Even worse, is the impression the bank has left with “little people” employees and “little people” customers that “It’s not about how little we think about you. It’s that we aren’t thinking about you at all.”
