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Documente Profesional
Documente Cultură
There has been a revolution in the communication media in Bangladesh through the introduction
of Internet and other forms of secure dial up media. This has an enormous impact on the
banking sectors of the country. Now due to electronic Banking except for cash customers are no
longer require coming at the bank. It has not only benefited the customers but the bank as well.
From the Banks point of view this has helped prevent customers queuing up at the bank counters
thus helping to minimizing the cost as well as the workload for the employees. HSBC has been
one of the pioneers in Electronic banking in Bangladesh. HSBC has been a pioneer in Electronic
banking in Bangladesh. At HSBC electronic banking comes in two modes Hexagon and
HSBCnet. Both of them are developed by HSBC. Hexagon is access through a dial-up mode by
the customers. HSBCnet on the other hand is Internet based. At the moment HSBC has more
than hundred corporate customers using the electronic banking facility. HSBC maintains one of
the worlds largest private data communications networks and one of our most successful
customer service driven technological innovations is Hexagon. Hexagon provides corporate and
institutional customers with PC access to cash management services, trade services, securities
services and other information through a single-platform using a fully integrated proprietary
system. There are about 60,000 Hexagon users worldwide, with more than 130 corporate users
in Bangladesh. Hexagon is able to offer a wade range of solution such as Account information,
Payments & transfer, Pay order & Demand draft issuing, Telegraphic transfer, LC application
opening and amendment, Trade enquiry, Market information, Offline services, Integration with
Excel, Salary Payments, Cheque writer to its clients.
HSBCnet is and Internet platform that provides a single point of entry to the online solutions
offered by our Corporate, Investment Banking and Markets business. These solutions include
HSBC's award-winning research, plus a range of cash management and treasury and capital
markets products and services, presented in a format that can be personalized to meet the
individual needs of our customers. The core benefits to be offered to HSBC clients, via HSBCnet
are Access The Customers account from ANYWHERE with Internet PC, improved security and
audit controls, multiple user access levels for different functions (balance inquiry, payment
preparation, payment authorization etc.) and SmartCards and SmartCard readers for extra
security for payment authorizers. The Core HSBCnet Features are balance and transactions
reporting, account Statements viewing, in REAL TIME!, account and transaction inquiries by
date, amount, and other criteria, daily statement download and printing capability for long term
record/reconciliation, variety of reports in a wide variety of formats in ONE platform, for every
banking service we provide (collections and payments of all types) and upcountry collections
and payments reports.
The future of Internet banking is enormous. Now banks are not just thinking it as a product but
as a delivery channel as well. This is not exception for HSBC.
HSBC is provides the best-of-breed integrated cash management solutions to The customer
consisting of Integrated Receivables Solutions (IRS), Integrated Payments Solutions (IPS),
Liquidity Management Solutions (LMS) delivered through our Integrated Delivery Channels
(IDC), also known as HSBCnet.
In Bangladesh HSBC can focus on their strengths to materialize the opportunities hidden for
them in the banking industry and also they can work on their weaknesses to develop the product
effectively and grab more opportunity hidden in the banking industry. With their strengths HSBC
can also reduce the threats existing in the market. They have global strength with their solid
brand image and experience and skills as well, with which they are being able to satisfy the
customers with their wide range of products and services. Bangladesh is growing market where
new businesses are coming up and in this emerging market and HSBC can introduce its products
and services effectively to the upcoming corporate. Moreover, it is an emerging market, various
multinationals operating in the country will expand and new multinationals will come. These
multinationals have huge need of electronic banking products for Payment, Collection and
Delivery need to manage their expanding business. They also need liquidity management for
proper funding and by focusing on these opportunities; HSBC can create an effective corporate
portfolio in the country.
PART-1
1. Introduction
1.3 Purpose:
For this term project, my objective is to know in depth about the electronic banking specially of
HSBC. The purpose of doing this report is to know about how the theory that we have learned in
our course works in the real world.
This report will help us to know about:
Electronic Banking
1.4 Methodology:
This report is designed as an exploratory case study and is totally dependent on the published
secondary data.
Primary data;
Secondary data.
Primary Data:
It is often known as the survey data, but in case this study I had to interview different personals
holding responsible post in HSBC and SCB.
Secondary Data:
Secondary Data were collected in the following ways:
Internet sources.
4
Data gathered within the organization (HSBC) itself. Basically some reports are used
as the source of the internal secondary data.
PART-2
2.1 Banking Sector Performance of Bangladesh
The banking sector in Bangladesh comprises of four types of scheduled banks, namely,
nationalized
commercial
banks
(NCBs),
government
owned
development
finance
institutions(DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs). At
presentthere are 49 banks with 6253 branches in operation in the banking sector of Bangladesh.
In 2003 market share of the NCB's on the asset side declined substantially while that of PCB's
increased markedly. More specifically, NCBs share declined to 41.7 percent of the total assets as
against 45.6 percent in 2002 while PCBs share rose to 40.8 percent in 2003 as against 36.2
percent in 2002 . The foreign commercial banks held 7.3 percent of the industry assets in 2003,
showing a slight increase by 0.5 percentage point over the previous year.
NCB's dominance on the deposit side also declined in 2003. Total deposits of the banks in 2003
rose to Taka 1140.3 billion from Taka 1023.5 billion in 2002 showing an overall increase by 11.4
percent. However, the NCBs share in total deposits decreased from 50.3 percent in 2002 to 46.0
percent in 2003. On the other hand, PCBs' deposits in 2003 rose to Taka 468.2 billion or 41.1
percent of the total industry deposit as against Taka 377.0 billion or 36.8 percent in 2002. FCBs'
deposits in 2003 increased to Taka 84.5 billion or 7.4 percent of total deposits as against Taka
71.9 billion or 7.0 percent in the previous year. The DFIs' deposits in 2003 were Taka 62.6 billion
as against Taka 59.5 billion in 2002 showing an increase of 5.2 percent over the year.
Through an international network linked by advanced technology, including a rapidly growing ecommerce capability, HSBC provides a comprehensive range of financial services: personal
financial services; commercial banking; corporate, investment banking
and markets; private banking; trade services; cash management; insurance; consumer and
business finance; pension and investment fund management; trustee services; and securities and
custody services.
A minimum of bureaucracy
A commitment to complying with the spirit and letter of all laws and regulations
The promotion of good environment to the welfare and development of each local
community.
Date
2000)
origin
of Date
entry
1865
Bank
Middle
East London
1889
1959
1965
Seng
Bank
Bank
USA Buffalo
1850
1980
Canada Vancouver
1981
1981
Limited Sydney
1986
1986
1992
Bank
Bank
Australia
Bank
Trinkaus
&
Burkhardt
KGaA Dsseldorf
1785
1992
of
HSBC
Guyerzeller
Bank
AG Zurich
1894
1992
Berhad Kuala
1994
1994
Mltiplo Curitiba
1952
1997
S.A. Buenos
1903
1997
1966
1999
SA Geneva
1988
1999
Bank Guyerzeller AG
HSBC
Bank
Malaysia
Bank
Brasil
Lumpur
S.A.-
Banco
Bank
Argentina
Aires
Bank
Republic
Bank
(Suisse)
Chinese intermediaries in charge of local staff and business dealings in the Chinese community.
The new bank's commitment to local ownership and management required a special arrangement
for incorporation. Rather than operate under existing British or colonial regulations - which
would have required a London head office - the bank's directors persuaded the Treasury in
London to accept incorporation under a special Hong Kong ordinance. This allowed the bank to
maintain a head office in Hong Kong without losing the privilege of issuing banknotes and
holding government funds. In this way, the bank (which had started life under a local Companies
Ordinance as the Hongkong and Shanghai Banking Company Limited) assumed the name The
Hongkong and Shanghai Banking Corporation in December 1866. Thereafter, the bank's
statutory framework remained basically unchanged until 1989, when registration under the Hong
Kong Companies Ordinance was completed.
achieving this reputation, Jackson and his successors were supported by a distinctive cadre of
managers and staff. These officers, many of whom had begun their careers with English or
Scottish joint-stock banks, were trained in London before taking up appointments in Asia.
became unconditional in July, lifting the Group's total assets from 86 billion in 1991 to over
170 billion in 1992. The Group's acquisition of Midland created one of the largest financial
organizations of its kind in the world. Attention immediately turned to integrating and
consolidating the business of the enlarged Group. The Group was especially keen to see a
synergy of the interests of the major subsidiary companies. The early results of this strategy
included the integration of treasury operations in London, New York and Tokyo, and the
introduction of common standards in technology. In 1992, the Group's new dealing room at
Thames Exchange, London, became the largest treasury trading operation in Europe. In the same
year, HSBC Investment Banking was formed to co-ordinate the merchant banking, securities and
asset management (through HSBC Asset Management) activities of the entire Group. In 1993
and 1994, the Group enhanced its special strengths in private banking and securities strengths in
private banking and securities business, the enlarged Group benefited from a greater level of coordination and a commitment to effective technology and training. The results of these efforts
were reflected in the Group's performance, with profits attributable to shareholders increasing
from 586 million in 1991 to more than 2,000 million in 1994 and US$5,408 million (3,342
million, HK$61,932 million) in 1999.
An important result of the acquisition of Midland was the transfer in January 1993 of the Group's
head office - but not that of The Hongkong and Shanghai Banking Corporation - from Hong
Kong to London to meet the requirements of the UK regulatory authorities. Although the Bank of
England now became the lead regulator for HSBC Holdings, the banking subsidiaries continued
to be regulated locally in their country of operation. The Group's traditional concern for rapid
Group's traditional concern for rapid meant that the new Group Head Office in London provided
only the essential central functions, such as strategic planning, human resource management,
legal and company secretarial, and financial planning and control. In 1998, HSBC announced
that these head office functions, together with most of the Group's London-based businesses and
operations, would be relocated to a new headquarters building in London's Docklands district.
The 44-floor tower, designed for HSBC by Foster and Partners, will be ready for occupation in
2002.
In the late 1990s, HSBC vigorously developed its role as one of the leading banking and
financial services organizations in the world. Its strategy of 'managing for value' emphasizes the
Group's unique balance of business and earnings between the older, mature economies and
faster-growing emerging markets. The commitment to major new subsidiaries in South America
14
in 1997, for example, extended the Group's reach in emerging markets. In contrast, the
acquisition in 1999 of Republic New York Corporation and Safra Republic Holdings S.A. for
US$9.85 billion reinforced HSBC's presence in highly developed markets - the United States,
Switzerland and Luxembourg. Republic, the third-largest deposit-taking bank in the New York
metropolitan area and a leading name in private banking, matched the Group's aim of delivering
wealth management in key financial centres around the world.
As part of the strategy, and also to strengthen its presence in the euro zone, HSBC announced in
April 2000 a US$11 billion recommended offer for Crdit Commercial de France. Established in
1894, CCF has 650 branches in France and 1894, CCF has 650 branches in France and
investment and private banking. Later in the same month, HSBC announced a world first in
financial services: it has joined forces with Merrill Lynch in a 50:50 partnership to create the first
global online banking and wealth management company. HSBC is also seeking wider access and
recognition in international markets. In November 1998, it announced the adoption of a unified
brand, using HSBC and the hexagon symbol everywhere it operates, with the aim of enhancing
recognition of the Group and its values by customers, shareholders and staff throughout the
world. In 1999, shares in HSBC Holdings plc were listed on the New York Stock Exchange,
adding to its listings on the London and Hong Kong stock exchanges. In parallel, HSBC's share
structure was simplified by introducing a single class of ordinary shares denominated in US
dollars.
Today, the HSBC Group occupies a leading position in the world of banking and finance. Its
international network now spans six continents. The Group is international in scope, reflecting
the long and colorful history of its member companies in different markets around the world.
This distinctive history and to grow further in the rapidly changing banking and finance
environment of today and tomorrow.
15
The HSBC brand was adopted by its Mexican subsidiary, G F Bital, early in the year and in
September the majority of the banks North American businesses, including Household
International, were united under the name HSBC North America.
HSBC continued its long-standing commitment to the environment, becoming a founder member
of the Climate Group in April and announcing its intention in December to become the first
major bank to go carbon neutral.
HSBC in 2003:
In April, the new Group head office in Canary Wharf in London officially opened to house some
8000 staff. HSBC's purchase of Household International Inc. added substantially to the Group's
business and profile in the United States; Households network of over 1300 branches in 45
states provided consumer finance to 53 million customers. In France CCF agreed to increase its
stake in French private bank Banque Eurofin S.A. to 83.95 per cent and to acquire two further
branches of Banque Worms. HSBC also acquired Keppel Insurance Pte Ltd, a provider of life
insurance and Islamic insurance in Singapore; and took full ownership of Equator Holdings Ltd.
HSBC in 2002:
From 2002, the HSBC identity carried the strap line of 'The world's local bank', emphasising the
Group's experience and understanding of a great variety of markets and cultures. The Group also
began its five-year 'Investing in Nature' programme, a partnership in environmental projects with
Earth watch, WWF and Botanic Gardens International.
HSBC acquired and recapitalized Grupo Financiero Bital in Mexico at a total cost of US$1.9
billion. This new member of the Group brought 5.5 million new customers and 1,400 branches in
to the network. Elsewhere, HSBC acquired a 10 per cent share of Ping An Insurance Company of
China, the second largest life insurance operator in the country.
HSBC in 2001:
Purchases during the year included the NRMA Building Society Limited in Australia, Demirbank
of Turkey and a 97 per cent interest in China Securities Investment Trust Corporation, Taiwans
leading asset management company. In December, the bank also took an 8 per cent share in the
Bank of Shanghai which was established in 1995 and operates a network of almost 200 branches
16
in the city. 2001 also saw the opening of the only branch in the HSBC network that is open 365
days a year - in Pune in Western India.
In April, HSBC announced a US$11 billion recommended offer for Crdit Commercial de France
(CCF). Established in 1894, CCF brought into the Group a network of 650 branches in France
and long experience of personal, corporate, investment and private banking, greatly
strengthening HSBCs presence in the euro zone. The deal was completed in July and in that
month HSBC Holdings plc was listed on the Paris Stock Exchange for the first time.
During the year HSBC launched HSBC Premier, a new international service for HSBCs most
valuable personal customers.
17
PART-3
3. HSBC in Bangladesh:
The HSBC Asia Pacific group represents Hongkong and Shanghai Banking Corporation, HSBC
in Bangladesh. The bank opened its first branch in Dhaka in 17 th December to provide personal
banking services, trade and corporate services, and custody services. The Bank- HSBC was
awarded ISO9002 accreditation for its personal and business banking services, which cover
trade services, securities and safe custody, corporate banking, Hexagon and all personal
banking. Other services of the bank include cash management, treasury, securities and
custodial service. HSBC is an ISO certified organization. This ISO 9002 designation is the first
of its kind for a bank in Bangladesh. The Hong Kong and Shanghai Banking Corporation
Bangladesh Ltd, primarily limited its operations to help garments industry and to commercial
banking. Later, it has expanded its business relations in sectors such as- pharmaceuticals, jute
processing and consumer products manufacturing organizations.
Realizing the huge potential and growth in personal banking industry in Bangladesh, HSBC
extended its operation to the personal banking sector in Bangladesh and within a very short span
of time it has been able to build up a huge client base. Extending its operation further, HSBC
opened a branch at Chittagong, two branch offices in Dhaka (Gulshan and Motijheel as well as
one in Dhanmondi) and an offshore banking unit on November 1998. At 31 st March 2000, the
number of employees of this bank in Bangladesh was 141. Recently HSBC has launched its 5 th
branch in Dhanmondi to extend its operation more.
In 1999 the paid-up capital of this bank was 434 million. Deposit of this bank was BDT 1,810
million in 1999. Among the deposit the called deposit was BDT 487 million and fixed deposit
was BDT 1,323 million. The amount of advance and investment was BDT 1,180 million and
BDT 100 million respectively. In 1999 this bank operated foreign exchange business of BDT
7,939 million. HSBC Bangladesh is under the strict of supervision of HSBC Asia Pacific Group,
Hong Kong. The Chief Executive Officer of HSBC Bangladesh manages the whole banking
18
operation of HSBC in Bangladseh. Under the CEO there are Heads of departments who manages
specific banking functions such as Personal banking, Corporate banking etc.
Currently HSBC Bangladesh is providing a wide range of services both two individual and
corporate level customers. Last year in the year 2000 the bank launched a wide array of personal
banking products designed for all kinds (middle and higher middle income) individual
customers. Some such products are personal loans, car loans etc. Recently the bank launched
three of its personal banking products Tax loan, Personal secured loan & Automated Tele
Banking service (ATB). These products are designed to meet the diverse customer needs more
completely.
HSBC in Bangladesh is also specializes in self- service banking through providing 24 hour ATM
services. Recently it opened two new ATMs at Shantinagar and Banani to better satisfy those
geographic segments. In total the branch currently has 9 ATMs located at various geographical
area of Dhaka and Chittagong.
The organizational structure of HSBC Bangladesh is designed according to the various service
and functional departments. The Chief Executive Officer (CEO) heads the chief executive
committee, which decides on all the strategic aspect of HSBC. The CEO is the person who
supervises the heads of all the departments and also is the ultimate authority of HSBC
Bangladesh and responsible for all kinds of activities of HSBC Bangladesh and all its
consequences. He admires all the functional departments and communicates with the department
heads for smooth functioning of the organization. The HSBC Chief Executive Committee is
formed with the heads of all departments along with the CEO. The structure of this top-most
authority is shown in the followingThe Chief Executive Officer
Manager,
Human
Resources
Manager,
Personal
Financial
Service
Manager,
Internal
Control
Chief
Operating
Officer
Head of
Corporate
Banking
Head of
Treasury
HSBC Bangladesh carries out all traditional functions, which a commercial Bank performs such
as Mobilization of deposit, disbursement of loan, investment of funds, financing export & import
business, trade & commerce and so on. Besides it also offers some specialized services to its
customers. Products and services offered by HSBC can be categorized according to the
customers they serve. Thus two major groups can be seen, they are individual customers or
consumers and corporate customers or organizations.
20
Personal Banking:
With five branches, HSBC offers a full range of personal banking and related financial services
including current and savings accounts, personal loans, time deposits, travellers cheques and
inward and outward remittances.
21
Commercial Banking:
Trade services:
Trade finance and related services are a long-standing core business of HSBC based on the depth
and spread of its corporate customer base, highly automated trade processing systems and
extensive geographic reach.
HSBC is one of the leading providers of payments and related services to financial institutions,
corporate and personal customers in Bangladesh. Underpinned by the Groups extensive network
of offices and capabilities, payments and cash management assists companies in efficient cash
management through the provision of payments, collections, liquidity and account services. In
Bangladesh, HSBC has five offices in two cities and an extensive network of correspondent
banks covering major districts with nearly 200 outlets.
In Bangladesh, HSBC is a local custodian for global custodians and investment banks, which
benefit from its significant expertise and understanding of the securities clearing business.
Credit:
22
A transaction between two parties in which one (the creditor or lender) supplies money, goods,
services or securities in return for a promise of future payment by the other (the debtor or
borrower). Such transactions normally include the payment of interest to the lender.
In the case of a commercial bank, credit means lending or advances made by it. The bank itself
is the lender and the borrowers are the various types of customers of the bank. The cost to the
customers of borrowing from a bank is the interest and/or commission charge that they have to
pay throughout the life of the advance.
a. Over Drafts:
An overdraft provides a limit up to which a customer may overdraw his current account at any
time up to a certain date. Interest is calculated daily on the overdrawn amount and debited
monthly to the customers current account.
b. Loans:
When a loan is granted the full amount of the loan is debited to a Loan Account and credited to
the current account of the customer. Regular repayments are then made to the debit of the
borrowers current account. Interest covering the full period of the loan may be taken in advance
before the proceeds are credited to the customers account or alternatively debited
monthly/quarterly, etc. in arrears.
c. Bill Discount:
By discounting a bill, it means that we buy the bill (i.e. Bill of Exchange or Promissory Note)
before it is due and credit the face value of the bill less a discount charge to the customers
account. The transaction is practically an advance against the security of the bill and the
discount represents the interest on the advance from the date of purchase of the bill until it is due
for payment (the maturity date).
d. Import and Export Finance:
The financing of import and export of goods and merchandise may range from the establishment
of bills facilities for handling import/export transactions to the granting of overdraft or loans.
23
Foreign Exchange:
Foreign exchange is the conversion of one currency into another. It is an integral part of the
world financial system. Without foreign exchange, many aspects of our daily life, which we take
for granted, would not exist. If a business transaction involving money has been concluded
between residents of different currency areas, it necessarily involves a foreign exchange deal. A
foreign exchange deal is merely an exchanging of one currency for another. It is like any other
business deal in that one thing is exchanged for another. However, there is one major difference
between a foreign exchange transaction and a normal trade transaction. Usually we exchange
money for goods or goods for money. But in foreign exchange money is exchanged for money.
There are two main types of foreign exchange rates that may be used in foreign exchange
transactions. These are:
Spot rate
Forward rate
Spot rate - the spot rate is the exchange rate used for foreign exchange transactions that will be
settled in 2 working days time.
Forward rate - the forward rate is the exchange rate used for transactions that will be settled
beyond 2 working days.
Foreign exchange dealers and banks for transactions between themselves in the interbank market
mainly use spot rates.
The foreign exchange market is no exception. n the foreign exchange room, the traders are just
making a market in foreign exchange, pieces of paper denominated in foreign currencies. It
doesn't matter that at a vegetable market buyers and sellers face one another in a given physical
place, whereas in the foreign exchange trading room all transactions are made via the telephone
or telex throughout a geographical area that covers the world. It is an ongoing market in both
situations.
Treasury:
Treasury is the management of assets and liabilities to optimize return through the use of
financial instruments. The role of Treasury can be divided into three areas:
24
1.
It manages the bank's balance sheet in terms of funding assets and liabilities and the Bank's
exchange and interest rate exposures.To fulfil this responsibility Treasury uses all the tools
available to them in terms
of products. These are from basic spot to interest rate swaps, and
management information driven by the Bank's core systems: TREATS, HUB and CIF.
2.
It actively creates risk positions to generate trading income. For example, Foreign
Exchange.
3.
The primary function of each of the Bank's Treasury centers throughout the world is the detailed
management of the Bank's assets and liabilities that fall within their sphere of responsibility.
They have specific responsibility for:
Maximising profitability through trading and marketing treasury products.
Controlling interest rate risk.
Controlling exchange risk.
Controlling credit risk, where it arises from treasury activity.
Controlling cash flows and liquidity.
Developing our Treasury capabilities and our presence in the market place.
It is important to stress that it is Treasury's responsibility to control all aspects of the
above and to ensure that all risk positions created in other areas of the Bank are taken-in under
the Treasury umbrella.
The financial products of HSBC can be categorized into two groups1) Asset products
2)Liability products
Asset Products:
Asset products are the various types of credit and loan schemes offered to consumers.
Liability Products:
The liability products consist of all savings and deposit schemes offered to customers.
Corporate Credit:
25
When customers choose a bank to help support their business they want to be sure that it can
tailor solutions to meet their specific finance needs. At HSBC, they have a full range of products
and services, which include:
i. Overdraft:
A convenient and flexible form of short-term financing for routine operating expenses and
overheads of the company.
ii. Import and Export Loans:
Loans against import are available to customers when they purchase under Documentary Credit
or Documentary Collections terms. Pre-shipment finance is available to them to meet their
working capital requirements. Advances are granted upon production of a buyer's contract or
export DC.
iii. DP / DA Purchase:
A cash advance made to customers when they have exported goods to a buyer through
Documentary Collections, either on a Document against Acceptance (DA) or Documents against
Payments (DP) basis.
iv. Long-term Loans:
HSBC can customize a Term Loan to finance the fixed assets that customers business needs
(such as land, new premises, equipment and machinery). It may be a greenfield project or an
expansion of an existing plant, that may be financed at competitive floating rate of interest.
v. Guarantees and Bonds:
HSBC in Bangladesh issues a full range of Performance Guarantees, Advance Payment
Guarantees, Financial Guarantees and Bid bonds for supporting the underlying business of their
customers. The availability of credit facilities is subject to HSBC's Internal Credit guidelines and
approval process.
With over 7,000 offices in 81 countries and territories, customers can be rest assured that an
HSBC office is close to them, wherever they are exporting to. HSBC is available to provide the
customer with advice on any aspect of trade document preparation and can also provide them
with working capital finance to assist them to source their raw materials
To benefit from HSBC's export services, people do not need to have special facilities, or even an
account with them. Simply request the buyers to advise the documentary credits through HSBC
and benefit immediately their international network.
26
27
c. Reduced Courier Expenses: By signing up for HSBCs DC Safe Custody Service, customers
can reduce the expenses incurred otherwise for collecting the DC from HSBCs counters.
Customers should always insist that their documentary credits are advised through HSBC. With
HSBCs network of 7,000 offices in 81 countries and territories, customers are assured that their
DCs will always reach them on time.
ix. Import Services:
With over 130 years of experience supporting importers globally, HSBC is well positioned to
fulfill customers trading needs. A full range of import services handled by experienced staff is
available, ensuring that customers import documents are processed without delay. Simply apply
HSBC for import facilities, and they will begin handling customers imports immediately.
HSBCs range of services include:
Documentary Credits
Import Collections
Import Finance
Shipping Guarantee
x. Documentary Credits:
For importers who are looking for new suppliers, one of the primary considerations when
deciding on the payment terms is to ensure that the goods supplied are the goods ordered. The
two main instruments to ensure this are documentary collections, whereby the importer only
makes payment in exchange for documents of title for the goods shipped, and documentary
credits, where the importer requests his bank to guarantee payment for the goods, given certain
conditions being met.
HSBC offers the following types of Documentary Credits.
a. Documentary Credit (DC)
When buying goods from overseas suppliers, customer will wish to receive the goods as ordered
in the right quantity, on time and at the designated place. They will also wish to make payments
only after receipt of the required documents including the title of goods.
HSBC can solve The Customers needs by issuing a documentary credit on The Customers
behalf. A documentary credit is our Bank's guarantee of payment for a shipment of goods against
specific documents as stipulated on it. By using a documentary credit, the bank will only make
28
payment after receipt of titles and other documents that should fully comply with the terms of the
credit. Customers can enjoy a safer and cheaper alternative to making advance payment or
deposits.
b. Back-to-back Credit (BBC)
If clients are intermediaries and their supplier wants to sell on documentary credit term only, they
(clients) may apply for the issuance of a Back-to-Back Documentary Credit from us against the
export documentary credit.
A Back-to-Back Documentary Credit is issued against the export credit (the master credit), but
the terms and conditions may not the same as the export credit. The clients must submit their
own draft and invoice, together with the other shipping documents presented by their supplier to
secure payment under the export credit. After processing, they will have the export proceeds to
pay their supplier and the balance credited to clients account.
c. Deferred Payment Credit (DPC)
A DC, which allows the nomination of, a bank, or the issuing bank to effect payment against
stipulated documents at a maturity date as specified or determinable from the wording of the
credit. With this customers are able to receive the goods now and pay later.
xi. Import Collections:
Collections offer a cost-effective but secure means of trading internationally. Using these
instruments, the importer only effects payment in exchange for the documents of title for the
goods shipped. If these are found to be unacceptable, payment can be refused, giving the buyer
peace of mind. However, the above is subject to Central Bank rules, therefore please consult with
the bank before considering import collections.
xii. Shipping Guarantee:
In certain situations customers goods may arrive in port before the shipping documents have
been processed through the banking system. In these circumstances, HSBC can issue a shipping
guarantee, allowing the customer to take control of the goods from the shipping company
without the bill of lading. The advantages of using HSBC for this are as follows:
a. Rapid Issuance:
Shipping guarantees are only of value if they are issued immediately. HSBC can issue shipping
guarantees as soon as the application is made, meaning clients can release thier goods from the
carrier immediately.
29
b. Financial Strength:
HSBC issued shipping guarantees are universally accepted by shipping companies. This means
clients can always be assured that they will get The Customers goods on time.
Trade Express:
Trade features as an integral part of the Bangladesh economy and this trend is set to continue.
Competition in trade, however, continues to grow stiffer for the banks local customers (both
domestically and internationally). In order to facilitate their competitiveness, HSBC can provide
their priority customers the ability to handle their transactions more quickly, easily, and
efficiently.
Benefits
With this product The Customer can now execute all The Customers trade transactions faster,
cheaper, and with more accuracy than ever before and most importantly, from the convenience of
The Customers own office.
The benefits delivered by Trade Express are
email account or fax number, along with a copy of the documentary credit enabling faster and
more accurate handling of exports.
Export transaction advices delivered to The Customers desk through email or fax and
Online issuance and amendment of Import DCs from The Customers office, reducing
Real-time correspondence with the bank through Hexagon enabling The Customer to
electronically present The Customers requests and instructions in a secure and fast manner.
DCs will always reach them on time. Electronic Export DC Advising is a new and alternative
way for them to receive a full copy of their Export Documentary Credits (DCs), amendments and
export transaction advices via email. The service brings direct benefits to customers business at
no extra cost. In this increasingly competitive environment, HSBCs Electronic DC advising
services will help by offering:
a. Better Logistics Management
Quicker freight bookings and collation of other necessary documentation required under DC.
b. Enhanced Accuracy in the Preparation of Documents
Clients can 'cut and paste' the relevant text from the copy of the DC emailed to them, to prepare
documents under this DC.
c. Convenience
Clients can easily forward their online copy of the DC to their shipping, insurance and other
trade partners.
d. Reduced Courier Expenses
By signing up for HSBCs DC Safe Custody Service, customers will be able to reduce the
expenses incurred otherwise for collecting the DC from HSBCs counters. The availability of
credit facilities is subject to HSBC's Internal Credit guidelines and approval process.
xv. Treasury Services:
HSBC is the leading market maker globally, quoting competitive prices in all tradable
currencies, and acting as a primary provider of liquidity to the market 24 hours a day.
Its dynamic Corporate and Institutional marketing teams provide up-to-date market intelligence,
advice and timely execution of deals to its customers throughout the trading day, including the
following:
a. Spot Foreign Exchange
A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the
current market rate, for settlement in two-business days time.
b. Forward Foreign Exchange
A forward exchange contract (or forward contract) is a binding obligation to buy or sell a certain
amount of foreign currency at a pre-agreed rate of exchange, on or before a certain date.
c. Competitive Forex Rates for Remittances, Export and Import
HSBC in Dhaka offers competitive FX rates to our corporate and retail customers.
31
No ledger fee.
Free countrywide access to The Customers account from any branch of ATM.
Only can be opened by Bangladesh and dual citizens in single or joint names.
ii.Current Account:
The current account is also a depository account basically designed for various customers. This is
an non-interest bearing account and the features are as following:
Non-interest bearing.
Opened by only:
Liaison offices.
NGOs.
34
Exporters earn foreign currency but due to some legal restriction that is posed by Bangladesh
Bank , they cannot keep the foreign currency more than $5,000. As the exporters earn huge
amount of foreign exchange and are deprived of the benefits of foreign currency accounts, a
special kind of account is created to benefit them. In this special account they can keep up to 7%
of their total amount of foreign currency exports and earn interests according to dollar interest
rates. Other benefits such as free endorsements, withdrawals that are higher than the maximum
limits, discounted rates for TCs etc. They use those accounts for remittance and other business
purposes.
ix. Other Accounts:
There are other kinds of accounts that created or designed to meet customer demands and
requirement. Such accounts are customized and have some restrictions on these accounts that are
subject to change. There are wide ranges of services offered to the customers who hold these
accounts and they are as below:
Cheques/cash deposits.
Quarterly/monthly/statement of account.
Foreign currency endorsement against travel quota and sale of Travelers cheques (Thomas
Cook).
Minimum Balance:
35
ATM Cards:
Customers ATM Card is simple to use, convenient, versatile and totally reliable. Using ATM
Card customers can:
-Withdraw cash
-Deposit cash
-Transfer funds between The Customers accounts
-Check The Customers account balance
-Order statements / new chequebooks
-Change The Customers PIN number
-View details of The Customers last eight transactions
-Make payments to other HSBC customers
The Corporate Employees Privilege Scheme (CEPS) is a unique and exclusive package of
personal banking products and services offered to the employees of selected companies. CEPS
provides employees with easy and quick access to our wide range of personal loan products at
specially discounted rates.CEPS offers preferential terms and pricing on the following products
and services:
Savings Account, Personal Installment Loans, Car Loans, Power Vantage Account, Home Loans
36
PART-4
Standard Chartered Bank also maintains correspondent relationship with over 600 banks in
To build and grow strong businesses in East and South East Asia - the Asia Pacific Region
To enhance historical position in the Middle East and South Asia region
To concentrate operations in the OECD in those activities that support Standard Chartered
issuing bank in Hong Kong - is well placed to continue playing an important part in Greater
China's development. A resident Group Executive Director manages the Groups business there.
Consumer Banking - which has some 5 million customers - has grown significantly in
recent years and contributes about 50 per cent of total profits. Major initiatives support the rapid
development of the credit card business in the exciting markets of India, Indonesia and Taiwan.
There are seventy-six branches and finance centers under this division in about ten countries with
a workforce of 1615 employees.
Personal Banking - There are 410 offices/ branches with a workforce of 12,000
employees working under this division in 28 countries. Some of the services provided by this
division are various kinds of insurance and loans, various types of accounts, travelers' cheques,
card money, etc
Corporate and Institutional Bank - its principal strengths are in supporting regional
and international cross-border trade and investments. Products and services are focused primarily
on these areas, notably trade banking, cash management and custody. Institutional Banking
manages the Group's relationships with banks, investment companies and other financial
institutions. It aims to be the 'banker's bank' operating in customers' time zones and providing
network linkage between international markets. This business has continued to expand rapidly in
Asia, the Middle East and Africa and, increasingly in Latin America. It was strengthened in
March 1999 by the acquisition of the trade finance operation of UBS.
Treasury operations are a particular Group strength with a network of over 20 dealing
rooms worldwide, offering customers a 24-hour service. The bank is particularly well known for
its expertise in exotic currencies and has reinforced its position as a leader in many Asian and
African markets.
Global Custodial Service - There are 17 offices under this division and about 900 staff
Commitment to quality
and Standard Chartered Bank's core strength is trade finance and services. With an experience of
over 150 years, Standard Chartered Bank has developed knowledge of trade finance, which is
world class. Principle services to importers are Import Letters of Credit; import Bills for
Collection and Back-to-Back Letters of Credit facilities. Principle services to exporters include
Export Letters of Credit, Direct Export Bills for Collection, Bulk Letter of Credit Collection,
Bonds and Guarantees.
Global Cash Management - This division is operational in all branches where the Group
has a Corporate Banking and Institutional Banking division. There are 100 employees working
in this division. Standard Chartered Bank recognizes the importance of Cash Management to
Corporate and Financial Institutional customers, and offers a comprehensive range of services
and liquidity management. Services by this division are provided worldwide with stress on Asian
delivery.
than 600 offices in over 40 countries, it is very well positioned to provide a wide range of
services to institutional clients: commercial, merchant and central banks; brokers and dealers;
insurance companies; funds and fund managers, and others. Offices in emerging markets of Asia,
sub-Saharan Africa, the Middle East, and Latin America are complemented by branches in the
developed countries such as USA, UK and Japan and the banks membership of the clearing
systems in those countries. The institutional banking group has network of offices in 25 countries
throughout Asia, North America, Europe, Africa and the Middle East. It provides Relationship
managers who are close to their customers and speak the local language. This wide network of
Institutional Banking facilitates transactions, introductions, problem solving and renders advice
and guidance on local trading conditions.
through a wide range of operating systems, sweeping transaction accessories with the provision
of reporting features or other special functions. There are 10 offices and 50 employees under this
division, which operates in 26 countries.
The Chartered Bank started operating in Bangladesh in 1948, opening a branch in Chittagong.
The branch was opened mainly to facilitate the post-war reestablishment and expansion of South
and Southeast Asia. The Chartered Bank opened another branch in Dhaka in 1966, where it is
still headquartered. After the merger of the Chartered Bank with the Standard Bank in 1969, the
Standard Chartered Bank took up a program of expansion. It increasingly invested in people;
technology and premises as its business grew in relation to the country's economy. In 1993, there
was an organizational re-structuring, which led to a substantial expansion of the Bank's business.
Today the bank has in total four branches in Dhaka apart from the Chittagong branch, including
an offshore branch at the Savar Export Processing Zone. Bangladesh is under the Middle East
and South Asia (MESA) region, with the controlling office in Dubai.
Its correspondent
relationship with Sonali Bank, the largest bank in Bangladesh, gives its customers access to all
major centers in the country.
convenient connections with foreign trade and remittance business. Standard Chartered Bank's
branch banking license in Bangladesh allows it to offer a full range of banking services.
Since the organizational restructuring in 1993, the amount of deposits and loans in 1997 has
increased by more than five times. There is an overall increasing trend of Standard Chartered
Bank's market share in terms of deposits and advances. In 1995, the market share in terms of
advances was 200/o, which peaked to 290/o in 1996 and fell by 3% in 1997. In the case of
deposits, the market share of Standard Chartered Bank increase 16% in 1995 to 18% in 1996,
and increased by another 2% in1997.
In terms of profit before taxes, there is a rise from eight million BDT in 1990 to its highest
amount of 750 million BDT in 1998. The largest increase of 438% took place in 1991. Although
the growth rate began to decline gradually from 1993 (from a 170% to 5% in 1998) the overall
increase reflects a substantial positive trend. Standard Chartered Bank's growth in terms of profit
and market share depicts an overall positive trend. This acquisition has made Standard
Chartered/Standard Chartered Grindlays bank the largest foreign bank in this country with ANZ
Grindlays Banks vast experience on Bangladeshi economy.
40
The Standard Chartered Bank in Bangladesh has its headquarters and three branches in Dhaka
and one branch in Chittagong, while they are going to open one in Sylhet very soon. While the
full range of services is available at the headquarters, other branches offer specific services
appropriate for the location. At the headquarters, the bank mainly consists of two divisions:
Business
Support
Treasury (TSY)
Standard Chartered Bank is primarily corporate driven. More than the corporate banking
generates 40% of its revenue group while Treasury contributes more than 20% to the overall
revenue. The rest is generated from Personal Banking, Custodial services and Institutional
Banking.
Standard Chartered Bank offers its local customers a wide variety of financial services. All the
accounts of corporate clients, which mainly comprise the top local and multinational companies
operating in Bangladesh, are assigned a Relationship manager who maintains regular and close
contact to cater to their needs. The objective of this department is to maintain a thorough
knowledge of the client's business and to develop positive relationships with them. This is
maintained through interactions to offer timely advice in an increasingly competitive business
environment. The expertise of the Institutional Banking and Treasury groups is also available
whenever required. The unique Offshore Banking Unit (OBU) in Savar a full range of facilities
to overseas investors. The Corporate Banking Group in Bangladesh has displayed a spirit of
community involvement by working with NGOs to underwrite soft loans. Standard Chartered
Bank offers its corporate customers:
41
The wide variety of lending needs are catered to with skilled and responsive attention
Syndicated loans
The trade finance of Standard Chartered Bank takes care of the commercial activity related
issues, particularly those related to import and export finance services. Some of the services are:
Trade finance facilities including counseling, confirming export L/Cs and issuing of import
Project finance opportunities for import substitution and export oriented project
Treasury
The foreign exchange and money market operation of the Standard Chartered Bank in the world
is extensive. Exotic currencies happen to be one of its specials areas of strength. A 24 hourservice is provided to customers in Bangladesh through the Bank's network of dealing centers
placed in the principal of the world. The Bank's treasury specializes in offering solutions to
those who wish to manage interest rate and currency exposures that result from trade, investment
and financing activities of other dynamic economies of the region. Treasury operations are
developed in line with changing market conditions to provide the best services to its customers.
According to BAFEDA (Bangladesh Exchange Dealers Association), Standard Chartered Bank
presently controls 42% of the local foreign exchange market's traded volume.
The IBG of Standard Chartered Bank offers a wide variety of products and services to the banks
and financial institutions. It has global links with leading banking institutions and agency
arrangements through its network of offices in 40 countries. The Bank offers a full range of
clearing, payment collection and import-export handling services. The bank offers foreign
missions, voluntary organizations, consultants, airlines, shipping lines, and their personnel the
following financial services:
42
Convertible Taka accounts (these funds are freely convertible to major international
currencies)
Superior retail banking services comprising a wide range of deposit and loan products are offered
by the Standard Chartered Bank to its individual customers. The Consumer Banking division
constantly faces challenges and meets them by developing new products and services to fulfill
the specific requirements of local TU Bank offers a 24-hour service in Bangladesh through its
Moneylink ATM network and Phone-link Phone Banking services.
Headquartered in Singapore, Standard Chartered Equitor fulfils the group's strategic intent to the
provision of custodial service in Asia.
Operations:
Operations is the part of the support division which helps to run the businesses of the bank in a
smooth and controlled manner. Since it helps mainly in processing the works of the business
units, any mistakes made can be easily detected and on time. Following are the main functions
of the operations department:
Central operations deals with the closing and opening of accounts and other payment and
account related processing of the Personal Banking division
Treasury operations help to deal with the processing works of the treasury division.
Loan Administration Unit (LAU) deals with the processing of the Corporate Banking
division.
Operations also have a department that deals with internal projects that arises from the need
to deal with certain problems or to make certain changes. Following are some examples of
43
Credit:
The credit department approves the loans of Corporate Banking division. The approval is mainly
based on the risk analysis of the corporate clients done by the Corporate Banking division.
Standard Chartered Bank has highly qualified professional staff members who have the
capability to manage and meet all the requirements of the bank. Every account is assigned to an
Account Manager who personally takes care of it and is available for discussion and inquiries,
whether one writes, telephones or calls. The services of the Bank are personalized and backed
by advanced computerization.
The following paragraphs illustrate the essential products and services of the Bank:
i. Cash management:
Standard Chartered is highly recognized as a leading cash management supplier across the
emerging markets. Our Cash Management Services cover local and cross border payments,
collections, information management, account services and liquidity management for both
corporate and institutional customers.
Features:
Access to long established expertise in Commodity Finance and willingness to accept the
Access to structuring skills for emerging markets medium term financing and to country limit
availability for many countries in Asia, India, Middle East, Africa and Latin America.
Presence on the ground in many emerging markets which facilitates transactions through
Track record and capability for global arranging, underwriting and syndication in the whole
45
Loan Structure and Syndication: this facility helps borrowers to meet substantial financing
needs by enabling them to reach the banks most interested in lending to their particular industry,
geographic location and structure through syndicated debt offerings.
Working Capital/Term Loan. To help the client meet their financial obligations and operate
effectively, the bank offers assistance in the form of working capital loans, overdrafts, term loans
(including real estate loans and other secured debt), backstops and revolvers.
Treasury:
According to the latest 'Activities of Bank and Financial Institutions' published by the Banking
Division of the Ministry of Finance of Bangladesh, Treasury Bangladesh is, in terms of foreign
46
exchange transactions, first amongst the multinational banks and 4th amongst all the banks in
Bangladesh.
The department offers the following Client Solutions and Risk Management services:
The Treasury division of the Standard Chartered Bank has a centralized dealing room in Dhaka
and consists of the following two areas:
i. Foreign Exchange
The Reuters monitors placed in the Treasury Division give continuous updates on exchange rate
movements as well as ready access to market information. Experienced dealers provide advisory
services from 8:00 am to late evening 6 days a week (except Saturday) on hedging techniques
and risk management so that the customers can obtain better value for their foreign exchange
transactions. The Foreign Exchange service includes:
a. Ready Contracts-. Foreign exchange contracts for the same day value, next day value or spot
transactions
b. Forward Contracts: Foreign exchange contracts to hedge exchange risks.
c. Cross Currency Contracts: The customers can trade a wide range of currencies.
d. Information analysis: The Treasury division publishes daily and weekly currency
newsletters, which provide analyses of currency trends and related issues.
Seminars and
workshops are conducted for customers from time to time on foreign exchange related topics.
Customers can also have access to the bank's information database round the clock through
Phone banking.
ii. Money Markets and Investment
Standard Chartered Bank's Treasury division is the local market leader in debt instruments
including both short and long-term fund mismatches through the money market and takes front
47
line position in inter-bank and market developments. The money market is managed through
tools like inter-bank call money rate, government T-bills of various maturities and inter-bank
SWAPS. In future, new instruments like repo and reverse repo will be introduced which will add
to the depth of the money market.
Equipments like telephone, voice recorder, money 2000, telex, sealing system, time keeper,
swipe doors, computers, fax internet are used to ease and fasten operations of the dealers to
conduct deals.
It assists the local banks by taking care of their cross-border business through the worldwide
Standard Chartered Bank network. Following are the variety of financial products offered by
this department:
i. Vostro Accounts
IBG, Bangladesh maintains Vostro Accounts of banking and financial institutions worldwide.
Customers maintaining such accounts can remit funds throughout the country through the
Standard Chartered Bank branch network as well as through - Chartered Bank's local
correspondent relationships.
ii. Nostro Accounts
In order to increase and promote the correspondent banking business worldwide, I]BG aWs
Nostro accounts to Bangladeshi banks and financial institutions in almost all es spanning the
Standard Chartered Bank global network. Group branches and sidies provide full clearing and
payment services in the UK, USA, Hong Kong, Malaysia, Singapore and many African
countries. Worldwide payments services are facilitated by a network of branches supported by
electronic cash management (available in select locations), fund transfer system and membership
of SWIFT.
iii. Handling of Trade Finance Business
IBG offers the full range of services available under Trade Finance to its customers. The
Standard Chartered Bank network in China, the Far East, the Middle East, the Indian sub-
48
continent, Africa, UK and USA makes SCB the natural choice of correspondents for advising,
confirming, and negotiating their letters of credit in these territories.
PART-5
5. Literature Review
5.1 e-banking
For this booklet, e-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels. E-banking includes the systems that enable financial institution customers, individuals
or businesses, to access accounts, transact business, or obtain information on financial products
and services through a public or private network, including the Internet. Customers access ebanking services using an intelligent electronic device, such as a personal computer (PC),
personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone
telephone. While the risks and controls are similar for the various e-banking access channels, this
booklet focuses specifically on Internet-based services due to the Internets widely accessible
public network. Accordingly, this booklet begins with a discussion of the two primary types of
Internet websites: informational and transactional.
Informational websites
Informational websites provide customers access to general information about the financial
institution and its products or services. Risk issues examiners should consider when reviewing
informational websites include:
Potential liability and consumer violations for inaccurate or incomplete information about
products, services, and pricing presented on the website;
49
Potential liability for spreading viruses and other malicious code to computers
communicating with the institutions website; and
Negative public perception if the institutions on-line services are disrupted or if its
website is defaced or otherwise presents inappropriate or offensive material
Transactional websites
Transactional websites provide customers with the ability to conduct transactions through the
financial institutions website by initiating banking transactions or buying products and services.
Banking transactions can range from something as basic as a retail account balance inquiry to a
large business-to-business funds transfer. E-banking services, like those delivered through other
delivery channels, are typically classified based on the type of customer they support. The
following table lists some of the common retail and wholesale e-banking services offered by
financial institutions.
Common E-Banking Services
Retail Services
Wholesale Services
Account management
Account management
Cash management
Small business loan applications,
50
Since transactional websites typically enable the electronic exchange of confidential customer
information and the transfer of funds, services provided through these websites expose a
financial institution to higher risk than basic informational websites. Wholesale e-banking
systems typically expose financial institutions to the highest risk per transaction, since
commercial transactions usually involve larger dollar amounts. In addition to the risk issues
associated with informational websites, examiners reviewing transactional e-banking services
should consider the following issues:
Authentication processes necessary to initially verify the identity of new customers and
authenticate existing customers who access e-banking services;
Negative public perception, customer dissatisfaction, and potential liability resulting from
failure to process third-party payments as directed or within specified time frames, lack
of availability of on-line services, or unauthorized access to confidential customer
information during transmission or storage.
Financial institutions may choose to support their e-banking services internally. Alternatively,
financial institutions can outsource any aspect of their e-banking systems to third parties. The
51
following entities could provide or host (i.e., allow applications to reside on their servers) ebanking-related services for financial institutions:
E-banking systems rely on a number of common components or processes. The following list
includes many of the potential components and processes seen in a typical institution:
Network administration,
Security management,
These components work together to deliver e-banking services. Each component represents a
control point to consider.
Through a combination of internal and outsourced solutions, management has many alternatives
when determining the overall system configuration for the various components of an e-banking
52
system. However, for the sake of simplicity, this booklet presents only two basic variations. First,
one or more technology service providers can host the e-banking application and numerous
network components as illustrated in the following diagram. In this configuration, the
institutions service provider hosts the institutions website, Internet banking server, firewall, and
intrusion detection system. While the institution does not have to manage the daily
administration of these component systems, its management and board remain responsible for
the content, performance, and security of the e-banking system.
Second, the institution can host all or a large portion of its e-banking systems internally. A typical
configuration for in-house hosted, e-banking services is illustrated below. In this case, a provider
is not between the Internet access and the financial institutions core processing system. Thus,
the institution has day-to-day responsibility for system administration.
maintain their own websites, as well as institutions that use third-party service providers for this
function. The agencies have issued guidance on weblinking that provides details on risks and risk
management techniques financial institutions should consider.
Account aggregation
Account aggregation is a service that gathers information from many websites, presents that
information to the customer in a consolidated format, and, in some cases, may allow the
customer to initiate activity on the aggregated accounts. The information gathered or aggregated
can range from publicly available information to personal account information (e.g., credit card,
brokerage, and banking data). Aggregation services can improve customer convenience by
avoiding multiple log-ins and providing access to tools that help customers analyze and manage
their various account portfolios. Some aggregators use the customer-provided user IDs and
passwords to sign in as the customer. Once the customers account is accessed, the aggregator
copies the personal account information from the website for representation on the aggregators
site (i.e., screen scraping). Other aggregators use direct data-feed arrangements with website
operators or other firms to obtain the customers information. Generally, direct data feeds are
thought to provide greater legal protection to the aggregator than does screen scraping.
Financial institutions are involved in account aggregation both as aggregators and as aggregation
targets. Risk management issues examiners should consider when reviewing aggregation services
include:
Protection of customer passwords and user IDs both those used to access the
institutions aggregation services and those the aggregator uses to retrieve customer
information from aggregated third parties to assure the confidentiality of customer
information and to prevent unauthorized activity,
Electronic authentication
Verifying the identities of customers and authorizing e-banking activities are integral parts of e54
banking financial services. Since traditional paper-based and in-person identity authentication
methods reduce the speed and efficiency of electronic transactions, financial institutions have
adopted alternative authentication methods, including:
Biometric identifiers.
The authentication methods listed above vary in the level of security and reliability they provide
and in the cost and complexity of their underlying infrastructures. As such, the choice of which
technique(s) to use should be commensurate with the risks in the products and services for which
they control access. Additional information on customer authentication techniques can be found
in this booklet under the heading Authenticating E-Banking Customers.
The Electronic Signatures in Global and National Commerce (E-Sign) Act establishes some
uniform federal rules concerning the legal status of electronic signatures and records in
commercial and consumer transactions so as to provide more legal certainty and promote the
growth of electronic commerce. The development of secure digital signatures continues to evolve
with some financial institutions either acting as the certification authority for digital signatures or
providing repository services for digital certificates.
55
Downtime (i.e., times when website is not available) or inability to meet service levels
specified in the contract,
Inaccurate website content (e.g., products, pricing) resulting from actions of the
institutions staff or unauthorized changes by third parties (e.g., hackers),
Damage to computer systems of website visitors due to malicious code (e.g., virus, worm,
active content) spread through institution-hosted sites.
Bill payment services permit customers to electronically instruct their financial institution to
transfer funds to a businesss account at some future specified date. Customers can make
payments on a one-time or recurring basis, with fees typically assessed as a per item or
monthly charge. In response to the customers electronic payment instructions, the financial
institution (or its bill payment provider) generates an electronic transaction usually an
automated clearinghouse (ACH) credit or mails a paper check to the business on the customers
behalf. To allow for the possibility of a paper-based transfer, financial institutions typically
advise customers to make payments effective 37 days before the bills due date.
Internet-based cash management is the commercial version of retail bill payment. Business
customers use the system to initiate third-party payments or to transfer money between company
accounts. Cash management services also include minimum balance maintenance, recurring
transfers between accounts and on-line account reconciliation. Businesses typically require
stronger controls, including the ability to administer security and transaction controls among
several users within the business.
This booklet discusses the front-end controls related to the initiation, storage, and transmission of
bill payment transactions prior to their entry into the industrys retail payment systems (e.g.,
ACH, check processing, etc.). The IT Handbooks Retail Payments Systems Booklet provides
additional information regarding the various electronic transactions that comprise the back end
for bill payment processing. The extent of front-end operating controls directly under the
financial institutions control varies with the system configuration. Some examples of typical
configurations are listed below in order of increasing complexity, along with potential control
considerations.
Financial institutions that do not provide bill payment services, but may direct customers
to select from several unaffiliated bill payment providers.
Caution customers regarding security and privacy issues through the use of on-line
disclosures or, more conservatively, e-banking agreements.
Financial institutions that rely on a third-party bill payment provider including Internet
banking providers that subcontract to third parties.
Set dollar and volume thresholds and review bill payment transactions for suspicious
activity.
Gain independent audit assurance over the bill payment providers processing controls.
57
Restrict employees administrative access to ensure that the internal controls limiting
their capabilities to originate, modify, or delete bill payment transactions are at least as
strong as those applicable to the underlying retail payment system ultimately transmitting
the transaction.
Restrict by vendor contract and identify the use of any subcontractors associated with the
bill payment application to ensure adequate oversight of underlying bill payment system
performance and availability.
Evaluate the adequacy of authentication methods given the higher risk associated with
funds transfer capabilities rather than with basic account access.
Financial institutions that use third-party software to host a bill payment application
internally.
Financial institutions that develop, maintain, and host their own bill payment system.
Financial institutions can offer bill payment as a stand-alone service or in combination with bill
presentment. Bill presentment arrangements permit a business to submit a customers bill in
electronic form to the customers financial institution. Customers can view their bills by clicking
on links on their accounts e-banking screen or menu. After viewing a bill, the customer can
initiate bill payment instructions or elect to pay the bill through a different payment channel.
In addition, some businesses have begun offering electronic bill presentment directly from their
own websites rather than through links on the e-banking screens of a financial institution. Under
such arrangements, customers can log on to the businesss website to view their periodic bills.
Then, if so desired, they can electronically authorize the business to take the payment from
their account. The payment then occurs as an ACH debit originated by the businesss financial
58
institution as compared to the ACH credit originated by the customers financial institution in the
bill payment scenario described above. Institutions should ensure proper approval of businesses
allowed to use ACH payment technology to initiate payments from customer accounts.
Cash management applications would include the same control considerations described above,
but the institution should consider additional controls because of the higher risk associated with
commercial transactions. The adequacy of authentication methods becomes a higher priority and
requires greater assurance due to the larger average dollar size of transactions. Institutions should
also establish additional controls to ensure binding agreements consistent with any existing
ACH or wire transfer agreements exist with commercial customers. Additionally, cash
management systems should provide adequate security administration capabilities to enable the
business owners to restrict access rights and dollar limits associated with multiple-user access to
their accounts.
Liability for bill payment instructions originating from someone other than the deposit
account holder,
59
Losses from person-to-person payments funded by transfers from credit cards or deposit
accounts over which the payee does not have signature authority,
Losses from employee misappropriation of funds held pending access instructions from
the payer, and
Potential liability directing payment availability information to the wrong e-mail or for
releasing funds in response to e-mail from someone other than the intended payee.
60
As institutions begin to offer wireless banking services to customers, they should consider the
risks and necessary risk management controls to address security, authentication, and compliance
issues.
PART-6
We have selected Hexagon & HSBCnet of HSBC and Web Bank of Standard chartered in the
report as these are considered to be the prime electronic banking product in the market.
61
world. Technology is vital to our future success and our overriding aim is to deliver faster, userfriendlier and more attractive services with enhanced functionality.
HSBC maintains one of the worlds largest private data communications networks and one of our
most successful customer service driven technological innovations is Hexagon. Hexagon
provides corporate and institutional customers with PC access to cash management services,
trade services, securities services and other information through a single-platform using a fully
integrated proprietary system. There are about 60,000 Hexagon users worldwide, with more than
130 corporate users in Bangladesh.
The systems principal features are discussed in the following paragraphs.
Hexagon operates under Microsoft Windows 3.1, Windows 3.11 for Workgroup,
Windows 95, Windows 98, windows 2000 or Microsoft Windows NT Workstation
4.0 and Windows NT Server 4.0.
Multi-site access is possible, for stand-alone, WAN or LAN access by all entities.
All data traveling between The Customers personal computer and the HSBC Group computer is
srambled using the latest encryption technology.
Online audit trail
A number of level of security safe guard all the information transmitted over our private data
network. An online audit trail can also be activated to track all activities performed on the system
over the preceding 30 days.
Customized delegation control
The system supervisor can customize the manner in which each member of staff can use the
system. The management control function allows senior executives to delegate routine activities
while retaining control over the authorization process:
The system automatically controls what activities each manager of The Customers staff
can perform through Hexagon.
All user must identify themselves to the system by inputting two passwords before
access is allowed.
Authorization
The system can hold transaction in the queue to await appropriate authorizations once the staffs
have entered them. Manager then can call back these transaction for authorization at their own
convenience, and from anywhere in the world where they have access to and a telephone line.
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Intra-day spot rates are provided from centres around the world for all the major currencies and
more than 40 exotic currencies.
Forex commentary
This is provided by experienced dealers and analysis in trading centers around the world,
including London, Tokyo and New The Customers.
Precious metal prices
Closing gold price for the New York and London exchange are indicated, along with prices of
different localised gold products supplied by HSBC Group.
Stock price and Index values
The Customer can have access to official closing prices and daily closing index values on major
securities traded, from stock exchanges around the globe.
Account balances are regularly updated, and information includes ledger balances,
available balances, credit facilities, funds held and clearing items.
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Where required, we are able to provide balance information to third party banks,
via SWIFT.
Balance and transaction information is available 24 hours day, 365 days a year. Balances can be
reviewed and reported in a variety of ways by account, bank, currency and location.
Efficient reconciliation
Reconciliation and monitoring of the accounts in simplified by instant access tp The Customers
credit and debit transaction details as far back as 30 days.
Flexible reporting
If The Customer require information regularly, Hexagon provides The Customer with the ability
to download information periodically to The Customers personal computer. Each morning, for
example The Customer may require the balance of all The Customers accounts, the opening spot
rates and the closing indices of a given stock market. With a few key strokes, Hexagon will make
the information available for The Customer to print, review on the screen or integrate into The
Customers spreadsheets.
Dynamic fund allocation
An instant review of the time deposit and savings account detail including interest accrued and
paid and the maturity dates, allow The Customer to maximize the use of short-term cash. Up-todate deposit rate from HSBC Group are also available fro review.
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Automatic routing via the most effective means using HSBCs links to all its
branches.
Payments can be initiated in offline mode and stored for later amendment and/or
authorisation.
Payment instructions can be imported from The Customers back office system.
In summary, Hexagon can meet all of The Customers payment needs, streamlining
administration, improving productivity and offering a single platform from which to initiate all
payment types, including payroll, local operating expenses and third party invoices.
Payment templates can be created for ease of processing repetitive transactions and stored.
Hexagon also supports large volume bulk payment processing.
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off-line facilities, providing users with a streamlined, flexible and cost effective way of
managing their business.
Instruction Placement
Purchase, delivery, receipt and sales instructions can be placed in over 20 countries. Instructions
can be input directly into The Customers PC and uploaded to Hexagon as required for
immediate processing.
Information
Information is updated on-line and real time-. Hexagon gives customers status information on:
Portfolio holdings, e.g. amount of stock held registration and availability status
Account statements
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On-line foreign exchange rates are available through Hexagon as well as inter-bank lending and
benchmark rates. Additional updates on world-wide stock indices and company trading prices
are available and refreshed on-line.
Hexagon may also be used to make Time Deposits in a variety of currencies and
maturities.
The system enables The Customer to ascertain The Customers outstanding trade
position, bills, import/ export loans or shipping guarantees on The Customers
designated accounts.
The Customer also have the option to settle/ accept/ reject import bills presented
on a documentary credit or collection basis.
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The Customer can store frequently used DCs as templates and call them back as
needed for amendments prior to re-issuance.
The Customer can also create and store beneficiaries names and addresses,
additional conditions, and goods descriptions relating to The Customers own
trade practices, for use in future DCs.
Hexagon Electronic Trade Related Services (ETRS) allows The Customer to automate the
exchange of documents and data for The Customers companys entire trade cycle via electronic
communication with suppliers and clients.
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ETRS enables The Customer to send purchase order data, letter of credit
(documentary credit) and invoices
Hexagon can be fully integrated with The Customers back office computer
system so that different documents can be sent to all The Customers trading
partners automatically.
6.1.11 Interfacing
Compatible with the vast majority of ERP systems and certified by
SAP as being fully compatible with its R/3 system. Interfaces have
also been successfully set-up with other leading back-office systems
like BAAN, J.D. Edwards and Oracle Financials. We shall be pleased
to work with Aventis in setting up an interface with The Customers back office software.
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As a result, Hexagon is able to both accept SAPs SWIFT MT100 format files and
to produce a statement extract file in MT940 format.
instructions before going online to the bank. Hexagon offline in the Windows environment
provides The Customer with:
Instant account information:
With Hexagon account information enquiry service, The Customer can instantly review The
Customers account balance and transaction for The Customers worldwide portfolio,
minimizing costs by easily sorting and customizing the reporting and printing of The Customers
account portfolio to simplify The Customers cash management procedure.
Customized payment instruction screen:
The Customer can transfer fund worldwide in many currencies. Customize payment and transfer
screen simplify payment instructions and minimize data-entry errors. Repetitive instruction can
be stored for future use to reduce data-entry time.
File sending / receiving
The file transfer service enables The Customer to prepare instruction and receive reports with
minimal time spent online.
Security
A security module is available to control access to the offline system, supplementing the online
security system. This feature password control and enables The Customer to set up customized
delegate profiles defining access rights.
Flexible reporting
The unattended operation services enable The Customer to specify in advance in when The
Customers PC will automatically link up with the bank system to download pre=specified report
in The Customers absence.
By account (e.g. access limited to subsidiary and not central treasury accounts).
By functions (e.g. access to view account balances but not transact on them).
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System Security
HSBC has full contingency arrangements for all operating systems and maintains a mirror
computer site in Hong Kong, which will provide back up in the rare event of a central system
failure. This site mirrors every aspect of our live site, including SWIFT interfaces, payments
processing systems and telephone lines. This site supports the entire Asia Pacific. Specific
recovery plans are also in place in Bangladesh.
PART-7
HSBCnet
7. HSBCnet- the Internet banking of HSBC
HSBCnet is and Internet platform that provides a single point of entry to the online solutions
offered by our Corporate, Investment Banking and Markets business. These solutions include
HSBC's award-winning research, plus a range of cash management and treasury and capital
markets products and services, presented in a format that can be personalised to meet the
individual needs of our customers. Core features and benefits are as follows.
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Daily statement download and printing capability for long term record/reconciliation
Variety of reports in a wide variety of formats in ONE platform, for every banking
service we provide (collections and payments of all types)
Payments:
-
Prepare bulk payments, including salary transfers, using our file upload tool
Robust advising engine at The Customers disposal, to send advice of ANY payment
to ANY appropriate party.
Research:
-
Valuable HSBC research from the world-view to local markets, covering daily,
weekly and monthly publications, as well as specific reports.
Snapshots of forthcoming events and breaking news through the calendar tool.
Security
We recognize and share the need for robust security. Some core security features include:
o
128-bit encryption
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7.1 How HSBC can help The Customer over the Internet
HSBCnet is a range of products and services that encompass our Corporate, Investment Banking
and Markets business, delivering tailored financial solutions to The Customer via the Internet.
These solutions include cash management and treasury and capital markets and are expanding to
include more products and services. The solutions are accessed online through an Internet page
that is customisable for each individual user. It provides access to HSBC sourced information
and, when appropriate, will provide the ability to execute certain tasks such as manage The
Customers liquidity across the world. It provides a single point of entry to our Internet solutions
and complements our other channels.
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We understand that different roles in The Customers organization have different needs, so we
enable each user to personalise their Internet page to show content that is relevant to them. For
example The Customers treasurer may wish to see content ranging from cash management to
research, through to securities, whereas one of The Customers payment initiators may just need
to focus purely on cash management. A user is set up with a personal page and accesses a
range of content known as tools based on relevant levels of entitlement. These tools provide
information in summary initially and can be expanded to provide further detail, for example, to
drill deeper into an account balance or to open a piece of research.
Cash management@hsbc
We strive to help The Customers organisation to make the best use of The Customers financial
assets through effective cash management. Our cash management@hsbc solutions available
through the personal page are:
Global balance and transaction reporting that empowers users to:
View balance summaries with sub-totals and projections
Drill into balance details including account selection details
Investigate statements
Work with real time data
Choose between several local languages
Access accounts around the world
Report third party (non HSBC Group) banks via SWIFT
Download reports and files
Additional functionality includes the ability to:
Make domestic and international high value payments and low value payments
Make inter-account transfers
Create payment templates
Upload files for direct transmission of data
Scope to inform beneficiaries that payment instructions have been sent.
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markets@hsbc
There is also access to:
Valuable HSBC research from the world-view to local markets, covering daily, weekly and
monthly publications, as well as specific reports.
Snapshots of forthcoming events and breaking news through the calendar tool.
Market commentary and other thought-leading content.
And where appropriate, access to our FX trading platform, which provides secure online access
with all the power of the HSBC dealing room.
securities services@hsbc
For our institutional custody clients, we have begun roll out in Asia of the following:
Our securities solutions available through personal page give users the opportunity to:
View portfolio details
Drill into holdings details including where stock is held and its delivery availability
Further drill into the transactions that cause the stock movements
Search transactions with great flexibility
Enquire on aged transactions by matched, unmatched, and failed status
Search for Information for securities and broker/counter-party information
Download files
We are adding new features including file upload, bulk file download, cash projections and
corporate event enquiries. All supported by online help, the personalisation tools and
sophisticated user management controls.
Personalisation
By each user of their personal page, thereby ensuring that only The Customer and The
Customers colleagues see content that is relevant
Breadth
Of accounts and The Customers relationship with HSBC
Access to content and ideas from across our Corporate, Investment Banking and Markets
business through one integrated personal page
The Customer will be using the same Internet platform as The Customers colleagues in other
countries, thereby adding to the consistency of work tools The Customer use.
Depth
By understanding account balances and other information at a summary level and then drilling
deeper
Through having access to the wealth of HSBC research with a few simple clicks
Freedom
The Customer and The Customers colleagues can use the personal page whenever it suits The
Customer and from wherever The Customer can access the Internet, within security parameters
Security
We recognise and share the need for robust security. Therefore, we have a range of security
features that strengthen depending on the users use of their personal page. In addition to
providing SSL 128-bit encryption, we enforce the use of user name and password for information
access and smart card security for appropriate transactional services.
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Internet applications are developed and managed. Later sections of the document outline the
main features of our security infrastructure.
IT security management
IT Security professionals are located in the principal regions in which the Group operates. Their
primary role is to advise management on IT security issues, but they also have a mandate to
perform independent security reviews of Internet applications. Each major release of HSBCnet
functionality is preceded by an independent review by IT Security, including a benchmarking
against the Groups IT Security Policy and Standards and platform and application-level
vulnerability testing. All major issues are resolved to the satisfaction of IT Security before launch
occurs. These staff monitors all aspects of IT Security relevant to our Internet applications on an
ongoing basis, and carry out periodical reviews of the principal Group IT security risks within
the major operating subsidiaries.
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e-Risk management
To ensure that a balanced and holistic approach to Internet security is maintained, we have
established a number of specialist Internet risk functions. These functions work closely with IT
Security and provide a critical interface to the business and those responsible for overall
operating risks. This ensures that our approach to Internet risks is not isolated from the overall
control and governance of our business. These functions include a Head of e-Risk Management,
dedicated to promoting operational risk management standards for our Internet systems
(including HSBCnet), and a multifunction e-Risk Steering Group that advises senior
management on best practice and aids in formulating operating policies.
Continual reassessment
Vigilance is crucial in combating the security threats faced in the Internet environment. We
continually examine the adequacy of our security measures to ensure we stay ahead of the game,
and act swiftly if we identify vulnerabilities. The remainder of this brochure describes the salient
features of HSBCnet security. These features will continue to evolve, however, and those
described in forthcoming sections will be supplemented and enhanced. If there are any aspects of
security that do not appear to be covered by this brochure that The Customer would like to
discuss, please contact The Customers local HSBC representative. If it is information that we
are comfortable sharing with The Customer, we can hopefully provide the assurance The
Customer require. However, we hope The Customer will understand that for The Customers
security, there are aspects of our security arrangements that must remain confidential. The
security, reliability and resilience of Internet systems should be founded on ensuring that the
underlying infrastructure of the service is secured and appropriate contingency arrangements are
in place. This section describes some of the key features of control HSBC employs to meet these
requirements. Please note that for security reasons we cannot describe here all the security
measures we operate, or elaborate in detail on those we do describe. In addition, in most cases
we will not disclose the third party security products we use.
Security
A critical goal for ensuring that a robust and secure Internet service is provided is to secure the
underlying infrastructure hosting and supporting the System. There are two key aspects to doing
this: securing the perimeter to prevent and detect unauthorised external attempts to gain access to
our systems, and controlling the Internet services infrastructure resident behind that perimeter.
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Denying access to the environment in which our Internet service operates by unauthorised
external parties is a key target for ensuring the overall security of the System. Some of the
measures in place to achieve this include:
Industry standard firewalls
Firewalls regulate and monitor traffic between our systems and the Internet, assessing the
authenticity and integrity of data transmissions and aiming to deny access to our systems by
unauthorised parties. HSBC has implemented industry-standard firewalls to protect the perimeter
and key infrastructure of our systems. Security engineers manage the firewalls centrally 24/7,
and the actions of firewall administrators are reviewed daily. All firewalls are hardened and
minimised.
Industry standard network IDS (NIDS)
Intrusion detection software maintains a constant watch on our systems. It aims to identify
unusual network traffic that may contain harmful material and issues alerts or quarantines data
files as necessary for subsequent analysis. HSBC has implemented an industry-standard network
intrusion detection system (NIDS), which is monitored 24/7 by a centralized security-monitoring
group.
Penetration testing
Independent third party penetration testing is performed on our systems on a regular basis,
simulating attacks against them in a controlled environment to see how they cope.
Access control
To control necessary access to our systems, all HSBC technical personnel require two-factor
authentication to gain access to devices within the secured perimeter and the Internet services
infrastructure. Although we cannot detail the nature of this access methodology, twofactor
authentication works on the principle that staff are required not only to know something (e.g.
password) but also to possess something (e.g. a Smart card) to enable them to obtain access. This
represents a significant strengthening of security over traditional singlefactor authentication.
Internet services infrastructure:
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Equally important a goal as denying unauthorised access to our systems is ensuring that those
systems are strictly controlled. Measures to achieve this include:
Server builds
All servers are loaded and configured according to standard build requirements, including
standard security toolkit. All servers are hardened and minimised according to functional
requirements, and tested for security vulnerabilities prior to deployment (with all deficiencies
resolved). Once deployed, all services are tested for security vulnerabilities on a regular basis.
Security patches are implemented in line with a formal risk-based approach.
Access control
We use access management software to manage access to all infrastructure devices on a 24/7
basis. Non privileged access is only provided to those HSBC support personnel who require it
and can provide the relevant HSBC specified approvals. Support personnel do not have standing
privileged access. Once provided, privileged access is only granted for a period of time approved
by HSBC; once that time has elapsed, access is revoked.
Host-based intrusion detection (HIDS):
HSBC has implemented an industry-standard hostbased intrusion detection system (HIDS).
HIDS is implemented on all servers within the Internet services infrastructure and, similar to
NIDS, monitors server activity to identify harmful code or unusual activity. It is monitored 24/7
by a centralised securitymonitoring group.
Change management
We monitor and approve any changes to infrastructure using our Change Management Workflow
application.
Infrastructure security testing
In addition to testing of the secured perimeter, regular independent vulnerability testing is also
performed on resident Internet services.
Web-applications security testing
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7.3.3 Authentication
Security credentials and two-factor authentication
HSBCnet aims to authenticate users logging onto the system based on a set of the credentials,
each designed to combat various aspects of the risks faced when authenticating identity over the
Internet. The System operates a standard customer authentication model (CAM), which dictates
what credentials must be provided by the user prior to gaining access to a given Service within
the application. For HSBCnet, the minimum credentials required to log on and access the System
are the username and a memorable answer and password that are set by the user his/herself and
are known only to them. For administrative activities and financial transactions, additional
credentials may be required. For example, to use transactional Services a user requires a smart
card issued by HSBC that contains a unique personal digital certificate in association with a PIN.
This adheres to the proven technique of two-factor authentication to enter the System a user is
required to provide something they know (i.e. password and PIN) and something they possess
(i.e. the smart card). This aims to mitigate the risk of an account being compromised as the
second authentication factor (smart card) physically exists separate to the System with which it is
used. Therefore, even if a users username, password, memorable question and PIN were
compromised, any potential attacker would also need to gain physical ownership of the users
smart card and PIN.
Unauthorised access attempts
If someone tries to access The Customers HSBCnet user account without the proper credentials,
the System will lock the account after a number of unsuccessful attempts. However, in order to
mitigate the risk of someone maliciously locking The Customers HSBCnet user account, HSBC
has implemented denial-of-service protection. This aims to ensure that someone who knows only
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a users username is unable to lock out that users account simply by entering incorrect values
for the password and memorable question.
Password security
When users register for HSBCnet, they set up their own credentials (this includes username,
memorable answer and password). These values are confidential to the user and are not generally
disclosed to HSBC staff that administer the System. Subsequently, there are three methods of
changing the user password and other security credentials.
Edit my profile: If the user is logged on (already authenticated) to the application, he has the
ability to change his password through the edit my profile feature.
Security information reset automatic: If the user is unable to log on (authenticate) to the
application, he has the ability to gain access to the System and reset his password or memorable
answer via the security information reset facility. When the user registers, he will be asked to
supply two security questions, in addition to his password and memorable answer. In order to
reset his password and access the System, he must successfully answer these questions.
Security information reset - manual: If the user has forgotten both his password and memorable
answer, and is unable to log on (authenticate) to the application, he can still use the security
information reset facility, but his reset request must be signed and submitted to his local
customer-based System Administrator for action. The customer-based System Administrator will
validate the identity of the requestor and reset the password and memorable answer. In none of
these methods is the users password or memorable answer disclosed to anyone (including HSBC
staff) other than the user himself/herself.
Transmission of security data
Security sensitive data (e.g. password) is masked on screen when input. When being transmitted
to HSBC from the customers browser, the transmission of data is encrypted (via SSL Secured
Socket Layer). On reaching HSBC, this data is encrypted within the databases. Even HSBCnet
administrators do not have access to this information. Additionally, to deter keystroke-logging
Trojans (malicious programs) and the unauthorised capture of customer passwords, HSBC has
implemented a virtual keyboard, which is an on-screen image of the computer keyboard. The
virtual keyboard requires the user to click on selected characters of their password (as opposed to
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typing in the whole password using the computer keyboard), therefore rendering keystrokelogging trojans ineffective.
There are facilities within the HSBCnet application that the Customer can use to review activities
performed by a specific username.
When The Customer log in, The Customers main landing page will indicate the last time this
account logged in.
Any business or administrative activities performed by the user account can be viewed by the
activity query facility.
Functional features
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Described below are some of the functional features built into HSBCnet to enable the Customer
to more easily control the use of the System.
Access levels
HSBCnet provides two access levels for customer staff. Systems Administrators can perform
(under either dual or sole control) general administrative tasks such as the set up and entitlement
of users to HSBCnet tools, ordering of smart cards and the suspension or deletion of users. End
users have no access to administrative functions. Either type of user can be allocated
transactional functionality, but the System is flexible enough to allow for the complete
segregation of administrative and transactional functions.
User access control
The access control tool allows The Customers designated HSBCnet systems administrators to
determine individual user access rights and entitlements, down to account level viewing and
payment authorization limits. The number of users required to authorise a payment can be set, as
well as the combinations of user levels for differing values of payments. The Customer can
establish a system that requires authorisation for payments over a certain value from a separate
country or at head office. This enables complete control of access and authorisation while
allowing payments to
be processed efficiently.
Dual authorisation control
All critical administrative and business functions in HSBCnet can be controlled on a dual
authorization basis (one user submits a transaction/request, another is required to authorise it).
However, the application provides the flexibility for the customer to define whether they require
dual authorisation). In normal operating circumstances we would, however, strongly recommend
that the dual control option is selected.
Activity log tools (audit trail)
Key administrative and transactional events are logged by HSBCnet and available for viewing
online via the activity query log tools. An audit trail is provided allowing for retrospective
internal control and financial auditing of Systems activity.
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Session time-outs
HSBCnet enforces idle (inactivity) session timeouts. If a session remains inactive for a set period
of time, the session will be terminated and the user will be required to log back into the
application. Moreover, the pages the user has viewed during his session expire to prevent him
from being stored in his browser, where they could be accessed later by another user.
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This edition of the procedures covers the following services, which are accessible upon use of
the appropriate identifiers (Identifiers) detailed as follows:
The Customer may amend accounts in relation to which Services will be made available, by
completing an additional account schedule and authorising it in accordance with the terms of the
HSBCnet Customer Agreement.
Users
Users are all representatives authorised by The Customer to use the System. Users are set up by
The Customers nominated Systems Administrators. Beyond the initial Systems Administrators
who are set up by the Bank, all subsequent Users are set up and controlled by Systems
Administrators directly.
Systems Administrators
Systems Administrators are responsible for the set up, authorisation and administration of Users
(including other Systems Administrators). Systems Administrators set up Users (including other
Systems Administrators) to use the System. They define which Services the Users have access to
and, where permitted on the System, set levels of entitlements within the context of each Service.
For instance, a Systems Administrator would be able to entitle a User to the crossborder Account
Reporting Service and then define within that Service what accounts the User could actually
view. Systems Administrators administer the use of the System by all Users. They are
responsible for ensuring that User profiles are suspended when Users are on leave, for instance,
and that they are deleted when appropriate. Systems Administrators are authorised to reset a
Users passwords and maintain their profiles when required. Additional information on how
Systems Administrators set up and entitle Users to Services can be found in the customer guides
to HSBCnet.
User Identification
The Customer are responsible for verifying the identity of The Customers Users, particularly
those Users that are entitled to make transactions on The Customers behalf. Systems
Administrators will normally need to be formally identified and have their addresses verified by
the Bank for money laundering compliance purposes. The Customers local HSBC contact will
advise which documents are required to be presented or whether any exemptions are available
for certain types of companies.
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the Systems Administrator advising them that their profile has been set up and that they should
now log in to HSBCnet.
Additional User Registration
While the initial Systems Administrators are set up by the Bank, additional Users (including
additional Systems Administrators) are set up by Systems Administrators. The registration
process for additional Users is similar to the online Systems Administrator registration process
described above with Users completing an online form, which is subsequently approved by their
Systems Administrator. Please note that additional Systems Administrators identities will need to
be verified by the Bank as described in the above section entitled User Identification. When
processing a new registration request, Systems Administrators are advised, in all cases, to crosscheck the legitimacy of its source using a channel other than the Internet. By their very nature,
new registration requests are not submitted over a secure channel. As is the case with initial
Systems Administrator registration, the password and security questions chosen by the User will
not be disclosed to the Systems Administrator or to the Bank. Failure to follow the procedures set
out in this ACP may result in Users being unable to access fully or in part the Services.
Password
The password is a minimum 8-character alphanumeric string chosen by the User at registration.
The User will be required to enter this password or designated characters from it to access the
relevant services. Passwords will be entered using an on-screen virtual keyboard :
Memorable Answer
On registration for HSBCnet, Users will be prompted to select a Memorable Question and
Answer. The Memorable Answer may be requested at logon, as an additional security measure.
In addition, Users are prompted to enter two further Security Questions and Answers at
registration. These Security Questions are used to assist the user to reset their password or
Memorable Answer if they forget it.
PIN Protected Smart Card
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This is a smart card that contains a pre-loaded digital certificate. To access certain tools as
specified in section 2 above, Users must insert their smart card into the provided smart card
reader and enter an additional PIN.
Digital certificate management
The digital certificate stored on the smart card allows HSBC to identify The Customer. The
Customers digital certificate must only be sent by The Customer to entities within the HSBC
Group and used in connection with transactions between The Customer and such entities. The
Customer must not send the certificate to any party or use it for any other purpose and agree that
no HSBC Group member will have any liability if The Customer do so.
System Compatibility
The Customer must ensure that The Customer have compatible hardware and software in order
to access the System. Minimum technical requirements are detailed in the customer guides to
HSBCnet. Additionally, The Customer must promptly adopt all patches, updates and all other
measures relating to operation or security issued or recommended by the Bank or suppliers of
hardware and software components.
Security standards
The Customer must review The Customers internal security procedures as necessary to ensure
protection remains up to date. In particular, The Customer must ensure that:
the encryption technology used or required to be used by the Bank in relation to the System is
compliant with the local law where the System is being accessed;
The Customer establish and maintain operational performance and security standards of
Components and other facilities required to access the System; and
implement and maintain appropriate firewalls and virus and denial of Services prevention
measures.
System Access
To prevent unauthorised access to the system The Customer must ensure that:
Users always log on to the System via the website address www.cibm.hsbc.com
Users log off the System after use and do not leave access terminals whilst logged on;
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Users log off the System properly using the Logout button at the top right corner of the
screen instead of closing the browser window;
no-one can observe or copy the access to the System when using a computer which may be
observed or which is connected to local area network (LAN) or any public internet access
device;
The Customer notify the Bank immediately of any unauthorized or suspected access or use to
the System (including to
Identifiers) or any unauthorised, unknown or suspected transaction or instruction;
The Customer remove access rights and notify the Bank immediately of any actual or suspected
impropriety on the part of any User in connection with the Services or where a User is no longer
authorised to use the System (due to leaving employment or otherwise);
The Customer comply with all reasonable requests for assistance from the Bank, the police or
other regulatory authorities in identifying actual or potential breaches of security.
File Upload
In order to deliver the file containing Customer Instructions to the Bank The Customer must
complete the information required in the file upload tool covering the file type, format,
authorisation level required and country (where appropriate) before selecting the file from the
specified location. Once The Customer have selected 'Go' and the Bank has received the file, the
Bank will issue a simple on-screen acknowledgment confirming the file has been received by the
Bank. The Bank will then perform some initial validation before issuing a file acknowledgment
report, which should be accessed through the Report and File Download function. The Customer
are responsible for advising the Bank of the receipt of a file acknowledgment report for which no
file was sent, any inaccuracy in the file acknowledgment report or failure to receive a file
acknowledgment report within a reasonable period of time. The HSBCnet file upload tool will
take the file of Customer Instructions from the specified location at The Customers site and send
it to the Bank. It is therefore important that measures are taken to minimise the chance that the
file is tampered with before being sent. These include:
The file should be kept in a secure location with minimum access permitted to it;
It should only be capable of being created by an authorised process and read by the HSBCnet
System;
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All access to the file is logged in a secure manner to enable investigations to be carried out
should this be necessary.
In all situations but particularly where pre-authorised files of Customer Instructions are sent to
the Bank, it is extremely important that the above measures are adopted. Nothing in this ACP
prejudices the terms of clause 3 of the HSBCnet Customer Agreement and in particular The
Customers obligation to ensure that Customer Instructions are correctly transmitted to the Bank.
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Welcome email
Initial System Administrator (ISA) receives welcome email from the Bank
ISA forwards welcome email to System Administrators (SA) and end users for their registration
SA and end users register via the link in email
The ISA should follow the steps below so that additional users can register and be set-up for
access to HSBCnet before they are entitled to use any tools and services.
7.4.1 Introduction
To begin using HSBCnet, an ISA will have to entitle themselves to additional services (if they
require them) and complete the following steps before HSBCnet is ready for use by the company.
1 Set up other users (i.e. other SAs and end users)
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99
100
Receivables management
Time Deposits
The Customer will need to specify signature limits for each account that priority payments, ACH
transactions, inter-account transfers, cheque outsourcing transactions or time deposit transactions
are to be made from.
102
Note:
i. If the Payments tool is not displayed on the red navigation bar, click More. If The Customer
cannot find the required tool in the Payments screen, scroll down the page for more information.
ii. The drop-down list of debit/credit account shows a maximum of 30 authorised accounts. If
The Customer want to view an account that are is not listed in the drop-down list, click Maintain
favourite accounts to add it to The Customers favourites list.
iii. Authorisation for all types of instructions requires the use of a smart card. When a user
accesses the Authorisation tool, HSBCnet will prompt the user for the smart card authentication.
Please have the smart card and PIN ready for use.
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Create Template .
The Customer can use the following tools to create payments using templates:
Template Summary (for details, please refer to section 4.1.5.2 Edit Template)
Priority payment
Inter-account transfer
ACH credit
Payment enquiry
The Customer can perform online enquiries on details and status of payment instructions using the
Payment Summary tool. The various stages of payment instructions that The Customer can perform
enquiry on are:
Received/Processed
Forward dated
Rejected
Pending authorisation
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will not be sent to the Bank for processing. If a payment instruction needs to be authorised by
more than one authoriser, it will not be processed until all the required authorisations have been
given. When an authoriser attempts to authorise an instruction after the Banks cut-off time, an
error message will be displayed, and the authoriser can either send the instruction to repair or
reject the instruction.
Template maintenance
The Customer can use templates to create payment instructions. Templates are useful if The
Customer need to create similar payment instructions on a regular basis (e.g. a weekly payment
to a supplier). The Customer can create templates for each payment type. It is important that The
Customer use the correct type of template to create The Customers payment instruction. For
example, The Customer must use a priority payment template to create a priority payment
instruction. Templates can be:
General templates - These can be created, modified and used by anyone.
Restricted templates - These must be authorised when they are first created and after they are
modified.
Stop payment instruction request
Please contact The Customers local customer service hotline to stop a payment
instruction
106
The Customer can issue an individual payment or group payments in a batch. The Payments tool
on the red navigation bar at the top of The Customers personal page provides The Customer
with a variety of integrated tools to manage The Customers payment instructions.
Create payment instruction
A payment instruction can be created manually by either inputting the information directly onscreen or via the HSBCnet file upload tool. When using the direct on-screen method, The
Customer need to complete all the necessary information and submit it to HSBC. If The
Customer use the file upload process, The Customers payment instruction will be generated
from The Customers enterprise resource planning (ERP) system and then uploaded to HSBC.
Using the HSBCnet file upload tool, The Customer can:
Upload a payment file
Repair a payment instruction
Authorise a payment instruction
Reject a payment instruction
Create payment manually
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When creating COS payment instructions, The Customer have an option to include payment
details to be sent to the beneficiary along with the COS instrument. The payment details can
either be in free text and/or table format. This section describes how to fill in the payment details
and attach payment details to a COS payment instruction.
Beneficiary list maintenance
A beneficiary list is a database where The Customer can save The Customers beneficiary details.
It is helpful to use a beneficiary list when The Customer need to issue payment instructions to the
same beneficiaries on a regular basis. Using a beneficiary list means that The Customer do not
have to input beneficiary details every time The Customer issue a payment instruction as all the
beneficiary details will appear automatically on the screen.
How to create a beneficiary list
How to authorise and/or reject a beneficiary list
How to change or delete a beneficiary list
How to enquire a beneficiary summary
Beneficiary maintenance
Once a beneficiary record has been created, The Customer can use it to create a payment
instruction or a new beneficiary record. The Customer can also make changes to the beneficiary
record or delete the record entirely.
Template maintenance
The Customer can use templates to create Cheque Outsourcing (COS) payment instructions.
Templates are useful when The Customer need to create similar payment instructions on a
regular basis, e.g. making a weekly payment to a supplier. Two types of templates are available:
payment instruction templates and payment details templates.
Payment instruction templates - These are used to prepare a template for each COS payment
type and are saved for future use. There are two types:
General templates - These can be created, modified and used by anyone.
Restricted templates - These must be authorised when they are first created and after they are
modified.
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Payment details template - These templates include payment details, which are sent with the
instrument. Payment details templates come in the form of general templates, which can be
created, modified and used by anyone.
Report lost instruction
Once The Customer have issued a cashiers order or demand draft via our Cheque Outsourcing
Service, the instrument cannot be stopped. The Customer can either report lost of the instrument
or request the Bank to cancel the instrument. Please contact The Customers local customer
service hotlines for details.
This section will cover the following:
How to create Report lost instruction request
How to authorise / reject Report lost instruction request
How to enquire Report lost instruction request
Report request
The Report Request tool enables The Customer to submit The Customers requests to generate a
variety of ad hoc COS reports based on the format and data of the underlying canned COS
reports made available by the bank.
Advising
The advising tools enable The Customer to create and send an advice for the following types of
payments:
Core payments - priority payment, inter-account transfer and automated clearing house (ACH)
Cheque outsourcing payment
The following advising tools are accessible through the Payment tool on The Customers
personal page.
Advising maintenance
To streamline the process of sending a payment advice, The Customer can use the Advice
Recipient List and Advice Details Template tools to create templates to store recipient and advice
details that are frequently used.
Advice recipient list maintenance
The Advice Recipient List tool enables The Customer to create, store and maintain recipient
details and related delivery channel information.
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The Customers funds availability by providing multiple collection points through our extensive
collection and alliance bank network. The service is executed via HSBCs extensive collection
network which includes our branches, alliance banks and other designated collection points.
Managing receivables with HSBC net
Overview
In this section, we will guide The Customer through the use of the tools for managing receivables
on HSBCnet. To start using these tools, The Customer need to log on to HSBCnet. After logging
on, The Customer will see The Customers personal page which displays buttons for various
tools on the red navigation bar. The relevant buttons are:
Receivables receivables management tools
Reports and Files report and file download tools
Administration user access tool
Create payor profile
After The Customer have acquired a new customer, The Customer can add the customer profile4
to our centralised database to facilitate future receivables matching and reconciliation. The
Customer can create the customer profile by using one of the following options:
1. Upload the payor file to the centralised database via HSBCnet5, HSBC Connect, or send us
the file by diskette, e-mail or CD-ROM.
2. Create payor records by using the receivables management tool on HSBCnet.
3. Request HSBC to create the payor profile on The Customers behalf where HSBC will capture
the payor ID/name of The Customers customer from the incoming transactions. The Customer
can provide the remaining details afterwards either through option 1 or 2 mentioned above.
Transaction enquiry
The Customer can perform online enquiries of transactions using the transaction enquiry tool on
the receivables management personal page. Historical information up to six months can be
enquired upon.
Instrument enquiry
The Customer may perform online enquiries of instruments using the instrument enquiry tool on
the personal page. Enquiries regarding historical information of up to six months can be made.
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Invoice enquiry
The Customer may perform online invoice enquiries on the receivables management personal
page. Enquiries regarding historical information of up to six months can be made.
Check the status of file upload. There are six types of status. Please refer to the sections below
for detailed explanation of each status under different autroisation types.
Status Type
Received by bank
Rejected by bank
1st level checking
File contains error(s)
Pending authorisation
Authorised
Authorisation Type
Pre-authorised file upload (for Payments, Advising and Cheque Outsourcing Services)
Instruction level authorised file upload (for Payments, Advising and Cheque Outsourcing
Services)
File level authorised file upload (for Payments, Advising and Cheque Outsourcing
Services) see section.
Pre-authorised file upload (for Payments, Advising and Cheque Outsourcing Services)
reports according to The Customers preference. For each activity reported, activity log query
will tell The Customer who performed and authorised an activity, the date and time this was done
and the effect of any changes made to the system as a result.
Note:
Activity log query displays completed actions, not those in progress (e.g. changes pending
approval). Any action performed using the Admin tool that is currently in a pending state can be
queried directly from that tool.
7.11 Administration
The Customers password and memorable answer form an integral part of the authentication
process which protects The Customers organisation from unauthorised access to account
information. It is for this reason that the procedures explained in this section should be held
strictly confidential within The Customers organisations designated user groups. To reset or
change any or all of The Customers security information after signing on, The Customer can
click The Customers username and change The Customers security information section for
details. After changing The Customers security information, please enter The Customers
current password and click Submit and The Customers profile will be updated automatically in
The Customers next sign on.
PART-8
116
Web Bank, the Internet Banking service for Standard Chartered's Wholesale Bank clients,
combines convenience and security in an easy to use system, making it one of the most
comprehensive Internet banking platforms available in the market today. Through Web Bank,
The Customer have access to Cash Management, Custody and Continuous Linked Settlement
solutions as well as Trade, Lending and FX information that leverages on Standard Chartered's
extensive international network.
Ease of Use
Automatic upgrades
Instant access to quick balances and information through Web Bank message centre
Comprehensive Reporting
HTML, PDF or text format reports allow The Customer to select the format that best suits
The Customer
The Customer have the ability to restrict users to access specific functions, transaction
types or accounts
More convenient for The Customer to get the information The Customer need to do The
Customers job effectively
Reduce the amount of software that needs to be installed and maintained on The
Customers PC
Improve information sharing within The Customers company by granting access to more users.
PART-9
9.1 SWOT
In this part of the report we will develop a SWOT matrix for HSBC of Bangladesh on the basis
of the electronic banking system and the weaknesses. We will also develop the SWOT Matrix by
118
relating the Opportunities and Threats HSBC is foreseeing at the present time. To develop the
SWOT Matrix, I have focused on primary and secondary information that I have gathered from
HSBC. The SWOT analysis was developed on the product feature of Hexagon and HSBCnet..
SWOT MATRIX: Hexagon
Strengths (S)
1.
Weaknesses (W)
Requirement
of
installation
of
software.
2.
2.
3.
3.
4.
Global access.
system.
5.
4.
out.
Opportunities (O)
Threats (T)
1.
2.
Relatively
secure
due
to
dial-up 1.
connection.
2.
3.
market.
4.
lines.
4.
Weaknesses (W)
1. Customers
are
yet
prepared
for
PC.
solution in Bangladesh.
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controls
about it.
is sometime risky.
Opportunities (O)
Threats (T)
to
keep
based products.
pace
with
the
1. More banks are coming up with web2. The risk of security is increasing with
the development.
3. Substitute product developed by nonfinancial institution.
4. Price war.
Besides, the strengths, as every organization, HSBC also do have some weaknesses. Their basic
weakness in the local banking market of Bangladesh is their late entry in the market. Their
management system is also very centralized for which they are not being able take big decisions
informally. Moreover, because of Bangladesh Banks strict regulations for Multinational Banks
and the cost development convenient products and services are causing them to charge high price
of the services they provide.
There are also many threats in the banking industry and mostly in this sector. Other Banks are
coming up with more enhanced products these days and as such price war is on in the market.
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Moreover, there is a threat of developing products by the PCBs. The local banks, if they develop
products and services they will be market leaders as they have large network in the coutry, they
can grab big segment of corporate and can charge lower price.
If HSBC can fight with its threats existing in the market and can utilize the opportunities by its
strengths and with the reduction of weaknesses they can be able to have good
corporate portfolio in the banking sector with their wide range of products and
services.
ISP
Network
Website of SCB
www.standardch
artered.com
Cutomers
account
number &
Password
Customers
instruction s
and data
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receiving
mode
Whereas, HSBC has just launched the web version of electronic banking in the name of
HSBCnet. But the existing electronic banking is through Dial Up system. In Dial Up system
delivery service, HSBC provides a modem to the customers it has in corporate cash management
department, which is linked only with the HSBCs server. No other ISP Network is over there as
third person link. The data the customers will get and also the data they will input as well as
instructions will be viewed as a communication chain with the customers and the bank itself. We
can get the picture of Dial Up delivery system with the diagram below as well:
The Customers PC
Connected with
the Modem in
customers
place
Customer
enters Account
Number and
Password
their own modem installed in the customers PC. As a result of it, no third party can leak the
information, being shared by the customer and HSBC.
Reimbursement authorizations.
On the other hand, with SCB and HSBCnet have not yet introduced trade services through the
internet banking.
Hexagon provides such security service to the HSBC customer that enables them to enjoy the
real time banking service. This means statements in Hexagon gets updated 6 times a day that
allows the customers to monitor the transactions closely. As a result, if any customer could not
see the first time information can get the updated version from this retrieve information on any
kind of transaction.
On the other hand, Standard Chartered clients can see their transaction information but the
previous days one, as they dont do the real time banking. Standard Chartered provides other
securities such as user authorization, Password protection, Authentication & Encryption and
Tracking transactions but could not give the most updated information at the same day, which
might also help them to serve better.
Product
Institutions
HSBC
Hexagon
Cheque
Facility
It is a built-in module of Hexagon to facilitate our
corporate customers for preparation printing and
updating the PC ledger (ledger maintained in Cheque
Writer).
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SCB
Cheque Writer
HSBCs cheque writer has the facility of auto reconcile with the statement as it consist the same
module of Hexagon. So the customer does not need to go through the whole process, it can be
done by itself. In case of Standard Chartered, it has to be done manually as they need to install
separate software for cheque writer.
Financial
Product
Institutions
HSBC
Hexagon
Reconciliation
Auto Reconciliation
Cheque
SCB
Cheque Writer
Manual Reconciliation
Table# 10 Operating Chequewriter
In the image below we can even get know bout how it works:
Figure# 9 Chequewriter
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HSBC has two options in regard of cheque leaf. First one is the customer can get a cheque with
advice and another one is continuous cheque. Cheque with advice is for those customers who
want to keep an invoice with them so that they can have the evidence of documentation. The
continuous cheque leaf does not have any advice and can be used without any invoices. Standard
Chartered has only the cheque with advice. The problem is some customer wants the continuous
cheque leaf, in that case SCB is lagging behind to satisfy the customers.
Product
Batch Payment
Facility
Instructions
are
electronically
SCB
OPSPAY
received
with HEXAGON.
Instructions are received
with
either
Floppy
127
PART-10
128
achieve better control of The Customers cash flow and thus enhance the management of The
Customers working capital.
Receivables
management
system
B2B and B2C
collections
ERP/
Treasury
Treasury Our
Management
Systems
Clients
A/P
Management
Back-office
Integration
Integrated
Account
Receivables
management
Solutions
Liquidity
Integrated
Investments
Management
Delivery
Solutions
Channels
Pooling
Integrated
Hexagon ABC
and cash
Payments
(host-to-host)
concentration
Solutions
HSBCnet
(internet)
A/R
Management
Customer
Receivables
Management
Solutions
Integrated Solutions
Back-office
Integration
Beneficiary
advising
Receivables Management System (RMS) is the backbone of IRS, which provides powerful tools
to The customer to centralise and reconcile all the collection items received from various parties
among different regions with Bangladesh.
129
Payor File through HSBCnet, or we do it for The Customer. We transact against The Customers
Payor/invoice IDs. The system automatically reconciles The Customers invoices, and delivers
the reconciliation reports to The Customer through HSBCnet.
Consolidated reporting function extracts information from the centralised database to generate
consolidated reports for The customer to view via HSBCnet. Data file formats are available for
download for further integration into The customers back office system. Reports include daily,
weekly, monthly collections and invoice reconciliation reports (if The Customer wish to avail the
reconciliation service).
RMS Features
Centralised database
Automatic reconciliation
Improve accuracy
Improve costeffectiveness
warehousing
online enquiry
-
decision making
generation
decision making
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RMS Features
How it works
The
customer
Payor/Buy
er/Distrib
utor
AR
file
Report
generation
Collection from
various channels
RMS
During regular A/R cycle, The customer will generate the A/R records and issue invoices to end
customers
The customer sends A/R records to HSBC electronically
Payors will make payment via different channels, including:
Paper based instruments
Cheque (Through EasyPay,
Electronic instruments
Wire transfer (TT)
Correspondent Banks)
Bill payment
In-house transfers
Banks
On receipt of the payment, RMS will capture the payment or invoice details into the centralised
database and for reporting and further reconciliation.
131
The customer can retrieve the collection, reconciliation report, or download data files via
HSBCnet.
PART-11
11. Conclusion:
In the last decade there has been a revolution in the communication media through the
introduction of Internet and other forms of secure dial up media. This had an immense impact
on all the sectors of the industry specially the banking sector. Traditionally in order to execute a
banking transaction a customer would require coming at the bank. But due to the introduction of
electronic banking, customers now can have access to their account 7days a week 24 hours a day
and execute the transaction from their office. In Bangladesh there has been no exception. Now
due to electronic Banking except for cash customers are no longer require coming at the bank. It
has not only benefited the customers but the bank as well. From Banks point of view this has
helped prevent customers queuing up at the bank counters thus helping to minimizing the cost as
well as the workload for the employees.
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In Bangladesh HSBC can focus on their strengths to materialize the opportunities hidden for
them in the banking industry and also they can work on their weaknesses to develop the product
effectively and grab more opportunity hidden in the banking industry. With their strengths HSBC
can also reduce the threats existing in the market. They have global strength with their solid
brand image and experience and skills as well, with which they are being able to satisfy the
customers with their wide range of products and services.
HSBC can overcome, these hurdles and utilize the strengths, as the Bangladeshi banking industry
has possessed some positive sides. Bangladesh is growing market where new businesses are
coming up and in this emerging market and HSBC can introduce its products and services
effectively to the upcoming corporate. Moreover, it is an emerging market, various
multinationals operating in the country will expand and new multinationals will come. These
multinationals have huge need of electronic banking products for Payment, Collection and
Delivery need to manage their expanding business. They also need liquidity management for
proper funding and by focusing on these opportunities; HSBC can create an effective corporate
portfolio in the country.
Bibliography
HSBC Group Standard Manual-Corporate, Investment Banking & Markets
Issued by HSBC
HSBC Group Standard Manual-Operational Control
Issued by HSBC
HSBC Group Standard Manual-Group Strategy and Structure
Issued by HSBC
HSBCs Guide to Cash & treasury Management in Asia Pacific
Issued by HSBC in 2004
133
HSBCnet brochure
Issued by HSBC in 2005
Security brief HSBCnet
Issued by HSBC in 2005
HSBCnet User Guide
Issued by HSBC in 2005
Hexagon Global Electronic Banking Brochure
Issued by HSBC in 2000
Website address:
http:// www.hsbc.com
http:// www.hsbc.com.bd
http:// www.standardchartered.com/bd
http://www.ffiec.gov/ffiecinfobase/booklets/e_banking/ebanking_00_intro_def.html
http://www.ffiec.gov/ffiecinfobase/booklets/e_banking/e_banking.pdf
http://www.ffiec.gov/ffiecinfobase/html_pages/gl_01a.html
http://www.mtk.ut.ee/doc/febawb30.pdf
http://www.valuenotes.com/asps/IndustryArticles.asp?Id=132
http://www.forumforthefuture.org.uk/uploadstore/Barclays_case_study.pdf
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