It is time for our large institutions to act more human — and particularly HSBC…

I have been having trouble recently with a large bank, the UK’s largest in fact, HSBC. I am a customer but they hardly treat me like one. I am sharing the story partly because I thought it might encourage the bank to get its act together but (since I think that is a forlorn hope) mainly because I think there are some valuable lessons in how they have behaved for those involved in designing human systems.

The background is that HSBC is one of the banks tainted by money-laundering scandals in recent years, and has paid over a billion pounds in fines for its lapses. This must have been embarrassing for the senior executives who are supposed to be in charge of the bank. I say “supposed to be” — anyone who has worked for a large institution will know that no-one is really in charge. Goodness knows, it is hard enough to be in charge of one person, (say, my 11 year old son) never mind a mass of tens of thousands of people. Still, some of those at the top manage to convince others, and sometimes even themselves, that they are in charge.

I am guessing that it was one of these senior people who conceived of HSBC’s “Safeguarding” programme (which may end up being a business school case study of how not to run a compliance programme). The intention was no doubt to clean up HSBC’s act, and to weed out the odd rogue customer. As a customer, however, I experienced it as a sort of inquisition, and an altogether frustrating experience.

I got involved because one of the hats I wear is a director of Edgeryders, an ambitious social enterprise that aims to use the power of networks to address large scale social challenges (migration, youth unemployment and so on). Its most recent project is opencare, which identifies, supports and connects community-based projects in the realm of health and social care. The European Union awarded the project a grant under its Horizon 2020 research and innovation programme.

Edgeryders operates across the EU and chose the UK to base its legal entity and bank account. The UK used to be a benign place to base such a company, but this has changed in recent years.

The current drama started in late March when I received a letter requiring me to arrange a call with HSBC to answer some questions about Edgeryders’ business. It took a while to arrange this (I spent a fair amount of time on the phone listening to banal music) — eventually the interview was held in early June. For 45 minutes, I was asked a series of pre-set questions by someone who showed no sign of knowing anything about our company. The output was then passed on to an internal team to review.

I received a follow-up call a week later, with a couple of clarification questions. I was then told: “If you don’t hear any more from us, assume everything is OK.” I felt some relief at this — it is never comfortable undergoing an inquisition, even if your conscience is clear. However, my relief was premature.

The next I heard was three weeks later, when I received a letter from Richard Bearman, UK Director, Small Businesses. It stated that the bank would cease providing foreign exchange and other services to us from 11th August. Since almost all our transactions are foreign exchange transactions, this would effectively freeze our bank account.

I wrote back, copying the HSBC customer care team, asking for clarification and help. However, other than a bland assurance from the customer care team, I received no response. In the meantime I called the bank and was told I needed to have another interview.

I won’t bore you with the details of what followed — suffice to say, despite my best efforts and a series of frustrating calls with HSBC staff, our services were terminated on 11 August. Having anticipated that this might happen, in early August we had removed some money from our account so we could keep paying our suppliers. This was only a temporary measure — we need a long term solution. The main problem is that a large sum (over Euro 100,000) of EU money is locked up in our bank account.

On my return from holiday in early September I picked up the trail. My colleagues and I were starting to think that our only option was to close our account. Before taking this step, I sent another letter to HSBC, but didn’t get any response. I also phoned the bank and spoke to an HSBC employee. He listened with real empathy to my plight but then admitted that there was little he could do except pass my messages on to the internal team responsible — he clearly had his own frustrations with the system.

At this point my colleagues noticed that there were other businesses in the same situation. In fact, HSBC’s Safeguarding programme was starting to gain notoriety. One man had written a blog post about his experience that had been widely circulated on the internet, with the result that HSBC were shamed into re-opening his account. Perhaps we should try the same.

I thought this a good idea. In a spirit of fairness, I wrote to HSBC one last time, informing them of my intention to go public. I copied Richard Bearman. To my surprise, within a few hours he called me, only the second time in this whole sorry saga that anyone from HSBC had bothered to do so. He told me that he had received my email, that he had been away and that he was now “on the case”, although he couldn’t make any promises.

I found it decent of him to make the call — a very human gesture. He could easily have found himself on the end of a rant from an angry customer. But I returned decency with decency and restricted myself to emphasizing my frustration and the urgency of the situation.

The call took place last Friday and I have heard nothing since. Our account remains closed. Clearly there are some complexities to the HSBC system that even a senior executive has to struggle with.

What strikes me about all this is the contrast between the behaviour of the individuals I have encountered (who were unfailingly courteous, even when dealing with my evident frustration) and the behaviour of the bank as a whole which has displayed nothing but disregard for me as a human being and a customer.

It is a phenomenon I have noticed throughout my working life — when humans get together in a group, they display what can be called “emergent properties”, properties that cannot be attributed to any one individual, but that emerge from the combination of them all. The whole becomes greater (or sometimes, lesser) than the sum of the parts. In the same way that a human being, say a Patrick or a Richard, is made up a set of organs, skin, bones, blood etc., an organisation like HSBC is comprised of individual humans. But you cannot understand the whole by examining the parts — it has properties that emerge from the combination.

Thus Richard Bearman can show up as a human, with human qualities, while the bank he works for remains a faceless monster. And no matter what I think of him and his colleagues, I feel a sense of alienation from HSBC. So it seems do many others, and HSBC’s reputation is damaged as a consequence.

The way HSBC has treated us and other customers is scandalous. But perhaps the biggest scandal is the way it has treated its staff. The people I spoke to were, in general, dis-empowered — they may have wanted to help but were unable to do anything beyond the limited range of actions allowed by the rules. The system was in control, not the people. How must that make them feel?

I suppose I am particularly sensitive to this because my work is all about creating organisations that bring out the best qualities of human beings. My starting point is that people can usually be trusted, provided they have a supportive environment. By contrast HSBC’s programme seems to have started from the position that its customers could not be trusted (after all, we have effectively been treated as guilty until proven innocent), and neither could its people.

Thus its front-line staff were only trusted to gather data, in a rather machine-like way. Meanwhile, behind the scenes, untainted by contact with actual customers, a hidden team of decision-makers makes the decisions — and makes them very slowly.

Descartes would love it. In the 21st Century, HSBC are still placing their faith in the “rational man”. They haven’t cottoned on to a basic truth, which is that humans are irrational and, guess what, it is a strength. Among other things, humans have intuition and empathy. Using such qualities, and with the right support, any reasonably trained HSBC employee could, in a 15 minute phone call with me, have figured out that we were a low risk — after all, our activities are very transparent, being all over the internet. But the bank preferred to rely on its systems rather than its people, and has ended up wasting a lot of time and damaging its hard-won reputation.

In a subsequent post I will reflect on what other companies are doing to avoid gross errors like the one that HSBC have made. In the meantime I sit and wait. Maybe HSBC’s UK Director of Small Business will have more luck than me in working out how to save us from the system. Who will win — the people or the system? Who would you bet on?

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