Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
HSBC’s failed mobile app Zing had fewer than 9,000 active customers in the month before its closure was announced, falling short of the lender’s own targets and underlining how big banks have struggled to create successful fintech offerings.
HSBC launched foreign exchange service Zing in January last year to compete with fast-growing digital rivals such as Revolut and Wise, but said this month that it was closing the app, marking the latest failed digital venture by a traditional bank.
By mid-December Zing had attracted nearly 131,000 customers, according to an internal presentation seen by the Financial Times. But on a monthly basis, the cross-border payment app had just 8,736 active users, far below its target of 12,000, the presentation showed.
The lacklustre growth highlights the difficulty traditional banks have faced in building their own digital solutions to compete with fast-growing start-ups.
Other large banks have also shuttered new fintech offshoots in recent years. NatWest said in 2020 that it would close its digital bank Bó just six months after its launch while Barclays closed its mobile payments service Pingit the following year.
“It can be hard for big banks to develop these standalone brands which may compete with their existing business lines,” said Gary Greenwood, an analyst at Shore Capital.
“If all you do is copy Wise . . . and [you] get no revenue, no differentiation, five years later, it’s not going to win,” said fintech analyst Simon Taylor, who co-founded consultancy 11:FS.
Zing, which targeted young international customers, had planned to open on two continents by the end of 2024, but ultimately never expanded outside the UK. The bank said in an email to employees seen by the FT that it would complete the app’s closure in May.
Analysts had raised doubts about Zing’s value proposition before its announced closure, and said that HSBC had failed to properly differentiate the app from its existing cross-border payment solution, Global Money.
“What I didn’t get was the value proposition because HSBC has a solution that probably is one of the best in the markets today,” said Pierre Legrand, managing director at consultancy Alvarez & Marsal
HSBC declined to comment. The London-based bank said last month that its decision to close Zing was part of its “simplification” strategy announced in October last year.
Fintechs and neobanks have grown rapidly in part due to the speed with which they open new accounts for customers. In contrast, large legacy banks tend to have a slow moving culture and formal approval processes that can prevent them from developing new products as quickly as digital rivals.
Taylor said HSBC was unable to match the speed with which fintechs signed up new users, adding it was “the worst of the UK banks by a country mile when it comes to their onboarding process”. He said HSBC was “famous for how bad they are at this”.
But some fintechs’ risk controls have attracted regulatory scrutiny, and replicating their speedy customer onboarding systems does not always fall within larger banks’ risk appetite.
Legrand welcomed the speed at which HSBC deployed and subsequently shut the app, saying: “It’s a big global bank that tried to put out a product rapidly. They tried, it didn’t work. Great, take that same spirit and energy and go after the next thing.”
