Dive Brief:

• HSBC Holdings chose Amazon Web Services a long-term cloud provider, in a push toward personalized banking and to deliver companywide digital transformation, AWS announced Wednesday. The company follows a multicloud strategy, using Google Cloud and Microsoft Azure alongside AWS, a company spokesperson told CIO Dive.

• As part of a multiyear agreement for modernization across lines of business, HSBC will focus early transformation on customer-facing applications, using AWS infrastructure to run and scale services. It is also prioritizing app modernization in its Global Wealth and Personal Banking business. 

• HSBC plans to use the full stack of AWS services, including serverless and analytics functions to boost personalization. 

Dive Insight:

HSBC, with more than 40 million customers worldwide and operations in 64 countries with 235,000 employees, is overhauling its business with mass cost-cuts along the way. 

In February, HSBC announced plans to cut 35,000 jobs, about 15% of its workforce, and eliminate $100 billion in assets in the next three years, reports CIO Dive sister publication Banking Dive. 

Though the plan was paused following the onset of the coronavirus pandemic, HSBC resumed its cost-cutting efforts in June. The financial services company also plans to scale back operations in the U.S. and Europe, investing more in Asia and its Middle East operations. 

As part of its remodeling plan, HSBC wants to re-engineer processes by investing in technology to improve the customer experience and reduce costs, HSBC said in its 2019 strategic report. 

In 2019, the company planned to invest between $15 billion and $17 billion in technology investments over a five-year period, according to an American Banker podcast episode, which interviewed Jeremy Balkin, head of Innovation at HSBC Bank USA. Its major technology investments include a $2 billion global retail transformation. 

Cloud paves way for efficiency, as organizations transform underlying technology and weave in analytics to provide data visibility. Though it requires initial investments, long-term it can save money, particularly when it comes to portfolio rationalization.

Customer-facing modernization efforts offer quick wins and give back to the company's bottom line. It's a level of short-term visibility that can serve as proof points for larger-scale transformation. 

As part of a multicloud strategy, the financial services company has a partnership with Google Cloud Platform on analytics and data visibility.

Though AWS has other big name cloud customers in the financial services industry, including Liberty Mutual and Capital One, competition remains. Last week, Deutsche Bank and Google announced a strategic cloud partnership, signing a letter of intent ahead of a multiyear contract. The deal's purpose is to transform Deutsche Bank's IT architecture and includes a co-innovation push to develop financial products.