HSBC is the latest big bank to formalise flexible working, with a plan for a huge reduction in the amount of office space it uses globally.
The bank said it is reducing its office space by 40% and moving to a hybrid-working model that enables staff to work from home as well as in offices.
The move is a cost-cutting measure following a fall in profits to £6.3bn in its latest financial year from £9.4bn in the previous 12-month period. But the decision also follows a trend that has seen the success of remote working during the pandemic make businesses, including banks, think again about their operations.
HSBC CEO Noel Quinn said offices with support functions and head office activities are being targeted for space reduction. “We believe we will achieve it via a very different style of working post-Covid with a more hybrid model,” he said.
The bank said it will retain its Canary Wharf office and bring staff back when appropriate.
The pandemic has forced businesses to enable staff to work from home as limitations on people’s movements are in place to reduce the spread of the virus. The latest technologies, including video conferencing, have made the transition from the office to the home a great success. Bank after bank has announced plans to formalise work-from-home policies.
Most recently, French multinational bank Société Générale said it is allowing its staff in France to work remotely two days a week, and last December, Dutch bank ABN Amro said it was selling its head office and redesigning another facility to facilitate increased home working.
And it’s not just the big banks that are acting. Challenger financial services firm Revolut said it is converting office space into areas for staff collaboration while making flexible working permanent for most of them.
This followed a survey of Revolut staff that revealed an appetite for remote working. Some 86% of its employees said they enjoyed not having to commute, and 60% said they now had a better work/life balance. Also, 92% of staff said their productivity had not changed or, if it had, it had increased.
Another survey by KPMG and the Financial Services Skills Commission revealed in October that half of UK workers in the sector wanted to continue to be able to work from home for at least part of the week when the pandemic passes. It also found that 26% of staff want to work from home permanently, and 13% want to relocate.
Office space is not the only real estate being reduced by banks. As well as generating a proof of concept that staff can work as effectively remotely as in the office, the pandemic and the restrictions on movement it has brought have accelerated adoption of digital banking, in turn accelerating the closure of bank branches.
The latest HSBC announcement does not include bank branches, but last month it announced that it was closing 82 more branches as the pandemic reinforced its strategy to move customers to digital channels.
HSBC is not alone, with hundreds, probably thousands, of bank branches earmarked for closure in recent months.
TSB recently announced that it will close more than 150 branches this year, with almost 1,000 jobs to go. It said a shift to online banking had been accelerated by the pandemic.
Meanwhile, Allied Irish Bank announced plans to cut its workforce by 1,500, merge branches and vacate premises as it attempts to cut costs following a review influenced by the acceleration of digital banking and home working during the pandemic.
Also, Germany’s second-biggest bank, Commerzebank, is closing more than 340 branches and slashing one-third of its staff – about 10,000 – to cut costs. It also said it planned to invest heavily in IT as part of its digital transformation.