HSBC’s COO Brings The Magic Of Silicon Valley To The 156 Year Old Bank

May 18, 2021
BY Peter High Founder and President of Metis Strategy
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John Hinshaw has held executive positions in technology and operations at a diverse array of companies, from HPE to Boeing to Verizon Wireless. Thus, he has been at high level positions in business-to-consumer, business-to-business and business-to-government companies. He has worked in New Jersey, Chicago, and most recently in Silicon Valley. It was Hinshaw’s last stop at HP, then HPE after the split of the founding company of Silicon Valley, that broadened Hinshaw’s technology ecosystem most dramatically.

In late 2019, Hinshaw added another industry to his resume, as he took on the role of Group Chief Operating Officer and Group Managing Director of HSBC, a global bank with operations in roughly 65 countries and over $500 trillion in payments processed in 2020. Hinshaw had experience in financial services by virtue of his more than five years on the board of BNY Mellon, but he had never been an operator at a bank before. The bank viewed his outsider status as a tremendous asset and Hinshaw notes that collaborating with seasoned colleagues while bringing his own fresh perspective has been a recipe for innovation.

“You certainly need great leaders in key roles who have [deep] financial services experience,” noted Hinshaw. “One of the things I have enjoyed doing is [building bridges with] folks who have 25, 30 years of experience with fresh eyes to look at some of the challenges [the bank faces].” He notes that many of the fintech companies that have emerged as new leaders elsewhere in the financial services industry often are founded by outsiders.

Like those fintech entrepreneurs, Hinshaw is passionate about technology and the ability to enhance customers’ and employees’ experiences digitally with HSBC. In fact, he was convinced to take the role when Mark Tucker and Noel Quinn, HSBC’s Chairman and CEO, respectively, indicated that his mandate was to drive true digital transformation across the company.  That means “transforming the bank from where we are today to a digitized bank that is easy to do business with for customers and that our colleagues can have a better experience with,” said Hinshaw. “That would leapfrog a lot of our traditional competition in banking, but [HSBC would] also be able to fend off some of the fintechs that are getting into banking.”

Hinshaw oversees 50,000 technologists and has a budget of over $6 billion. But he has also developed partnerships with fintechs and other startups around the world, which can provide HSBC with new technologies while gaining access to the bank’s platforms, customers, and history “A lot of the new innovative technology is cloud-based, it comes out of Silicon Valley, it comes out of the fintech community,” Hinshaw said. “Bridging those two worlds is really, really important. That is one of the strengths I bring to HSBC, having lived and breathed Silicon Valley for a decade.”

In recent months, Hinshaw helped broker a partnership between HSBC and Google to help detect and prevent money laundering and financial crime using better analytics. “We process trillions of financial transactions per day and figure out which of those might be criminal or fraudulent in nature,” Hinshaw said. “That takes a lot of computing horsepower, it takes a lot of data and analytics.” By partnering with Google Cloud, the company can remove many of the false positives that naturally occur when analyzing trillions of transactions. “We are doing something that no other bank has ever done in looking at that financial crime challenge, and only really Silicon Valley and the way they think, the way Google thinks and technologists think, can help us bridge that gap,” noted Hinshaw.

Hinshaw has pushed the bank to invest in startups as early as in the angel and series A rounds of investment. That way HSBC can influence the evolution of products to a greater extent, which forms a virtuous cycle of sorts. “If we like a technology, we trial it,” he said. “It works well for us, we make an investment so [the startup] can expand.” HSBC can then test the startup’s technology at scale and help it grow, and usually takes on a board or advisory role to do so. “It just builds on itself. They get the advantage of a working product in one of the biggest banks in the world; we get the advantage of helping to guide and direct their capability, and if we make money on the investment, all the better. We will reinvest it in another opportunity.”

Like others, Hinshaw sees the pandemic and quarantine as an extraordinary accelerator to digital transformation. With customers not having a choice but to operate digitally, it led to massive adoption of the company’s digital capabilities. “It really did change the way we look at the digital adoption curve,” he said. “I think we probably leapfrogged three to five years in the digital curve, and it is not going back. Nobody wants to use paper.” 

Another learning for Hinshaw is the effectiveness of virtual work. At a time when financial services companies on the whole have been more conservative in their approach to hybrid work in the future, he sees things differently. He noted that the pandemic proved that people could be much more effective and efficient at times working from home. Time in the office, he believes, needs to be purposeful.

“The only reason to come into a headquarters office should be for collaboration, innovation, co-development with your colleagues, socialization with your colleagues, to get to know them because we have not spent time with them. Connecting with customers, connecting live with suppliers [should also be done in person].”

Hinshaw notes that this has been the most interesting among the many executive posts he has held, as it draws upon all of his past experiences in profound ways.

Peter High is President of  Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, was recently released. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.

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