March 10, 2012
How has the company chosen to improve its knowledge of customers and therefore its decision making? Analyze the management, organization, and technology dimensions of the solution. HSBC, as with other banks, took advantage of many poor consumers looking to own their own home. These consumers had low credit scores, are in default or have low income, which means there was a higher probability of them not paying back the loan. These banks took advantage by not explaining the entire process of how the amount will double and the interest rate will become adjustable after a couple years. This led to many subprime mortgage loan holders to not meet payments and eventually lose their home. Because of this HSBC was one of the first banks “announce a billion dollar write-off linked to its exposure to subprime mortgages.” (Modell) HSBC improved one way by advancing their technology. Data is collected and sent to one team of specialized individuals who make sure that all is correct for approval. HSBC also implemented a new process using Experian-Scorex decision support software. This new software will help HSBC with their decision making process. It “allows HSBC to identify the value of each customer and create tailored product packages.” (Finextra) George Lennox, a senior manager at HSBC, stated “Strategy Management will undoubtedly become an integral part of our business and we expect that it will make more than 50 billion customer decisions annually for us as we roll it out across our global business." (Finextra) They have also decided that customer satisfaction and building trust is more important than profit. Did HSBC choose the best solution? Explain your answer.
HSBC chose a great solution. They allowed almost anyone to obtain a loan as long as they met some requirements. By using the new strategy management software they implemented, they will be able to make sure that each...