HSBC has announced the closure of its international payments app, Zing, just over a year after its launch. Positioned as a potential rival to fintech giants Wise and Revolut, Zing’s shutdown is part of HSBC’s broader “simplification” strategy. The app, launched in January 2023, aimed to provide users with the ability to hold digital currencies, and send or spend money both in the UK and internationally.
Why HSBC Is Closing Zing
According to HSBC, the decision follows a strategic review of Zing within the group. “After careful consideration, we have made the decision to close Zing and integrate its underlying technology platform into HSBC,” the bank stated. This move underscores HSBC’s intention to streamline its operations while incorporating Zing’s technology into its core banking services.
Impact on Jobs
The closure of Zing may have significant repercussions for HSBC employees. Sources close to the matter have indicated that as many as 400 jobs could be at risk. However, HSBC has refrained from commenting on the number of employees affected by this decision.
A Broader Trend in Banking
This decision aligns with a series of challenges traditional banks have faced when launching fintech products. HSBC’s move follows the footsteps of other major banks, such as NatWest and Barclays, which faced similar setbacks. NatWest discontinued its digital offering, Bó, in 2020 after just six months. Likewise, Barclays shut down its mobile payments app, Pingit, in 2021.
Contrasting Success Stories: Wise and Revolut
While HSBC struggles to compete in the fintech arena, companies like Wise and Revolut continue to thrive. Wise reported a staggering 229% increase in profits before tax, reaching £481m for the year ending March 31, 2024. Meanwhile, Revolut achieved a $45 billion valuation in August 2023 after obtaining a banking license, making it Europe’s most valuable startup.
Leadership Changes at HSBC
HSBC’s decision to shutter Zing follows a leadership change in July 2023, when Georges Elhedery replaced Noel Quinn as CEO. This leadership shift may have influenced the bank’s approach to its fintech ambitions and its focus on core operations.
Conclusion
The closure of Zing highlights the ongoing challenges traditional banks face in the rapidly evolving fintech landscape. While fintech pioneers like Wise and Revolut continue to dominate, HSBC’s decision to integrate Zing’s technology into its broader operations could signify a strategic pivot towards leveraging existing strengths. As the financial sector evolves, only time will tell whether traditional banks can successfully adapt to compete with agile fintech innovators.
