HSBC has begun one of the year’s
biggest product roll-outs and bank marketing campaigns, HSBC
Advance, to promote the launch of a new all-in-one account targeted
at the mid-market segment. As Farah Halime reports, HSBC is banking
on the Advance product repeating the success of its successful
Premier account.


HSBC's ads for the new 'Advance' accountHSBC, the largest bank
in Europe by market capitalisation, has launched HSBC Advance, an
all-in-one packaged account targeted at current account customers
in the mid-market segment across 39 countries worldwide.

In the UK, the new account debuted at the
start of February, replacing its existing HSBC ‘Plus’ packaged
current account.

The account combines the features of the
‘Plus’ account with preferential rates and prices on a range of
HSBC loans, overdrafts and mortgages, in addition to a range of
services including roadside breakdown assistance and family

It is available across multiple channels,
including priority counters in-branch, 24/7 phone banking,
self-service and a dedicated website at

Around 800,000 HSBC Plus customers in the UK,
who currently pay around £12 ($17.90) per month for the service,
will now be transferred to the HSBC Advance account.

HSBC spokesman Mark Hemingway told
RBI that the mid-market segment includes customers with a
higher than average salary for their age who tended to travel
abroad frequently.

HSBC Advance incorporates deposit, investment,
insurance and credit card products and will cost new and upgrading
customers £6 for an initial three-month introductory period and
£12.95 per month thereafter, or 6 percent more than the £146.40
annual fee for the outgoing Plus account.

Hemingway told RBI: “Packaged current
accounts are not right for everybody. We’ve had customer feedback
on the Plus account – they love what they’ve got but they want a
bit more as well. It is about creating a halfway house or a
stepping stone as they progress to the Premier account.”

Although free banking is prevalent in the UK,
fee-based packaged accounts make up around 14 percent of all
current accounts in the country (see RBI
). According to RBI estimates, the market was
worth around £1.6 billion in fees in 2009 and is predicted to be
worth a further £2 billion over the next five years.

HSBC is banking on the Advance product
emulating the success of its Premier account. The Premier account
has typically been marketed towards customers with around $100,000
of savings, though the limits vary from country to country, and is
widely regarded as the most successful mass-affluent segment
product in global banking.

In 2009, Premier customer numbers grew for the
10th consecutive year to around 3 million, up from 1.9 million in
2007, and has played a major role in helping HSBC to penetrate
emerging wealth markets.

Such has been the success of Premier that HSBC
has estimated it can achieve average revenue per Premier customer
of over $1,000 by 2011.

US launch

HSBC Advance launched in the US on
30 January, replacing the bank’s existing HSBC Direct brand.

Although the US is not officially launching
the full suite of Advance products until later this summer, Neil
Brazil, vice-president for public affairs at HSBC North America
told RBI that the bank had, to date, only rebranded its
HSBC Direct online offering to HSBC Advance.

He said: “The name change has not affected
existing customers’ banking activities in any way. The change was
implemented as part of an ongoing HSBC initiative to offer a core
suite of instantly recognisable products across major global

Customers in Hong Kong, Indonesia, Panama, Sri
Lanka, Taiwan and Turkey also received access to the Advance
account at the beginning of the year.

The bank will continue rolling out HSBC
Advance to more than 30 other countries where it has a retail
banking presence during the year.

For UK customers, HSBC calculate that the
Advance account will give customers savings of up to £500 based on
the total cost of a variety of services.

It said that a typical worldwide travel
insurance policy would cost £215 based on the price of an annual
family travel insurance policy from Aviva Insurance, while roadside
assistance from motoring organisation the RAC, included as part of
the Advance package, was worth £99.50 before any discounts.

The HSBC Advance account includes the
following features:

• A lifetime tracker mortgage, 2.49 percent
(1.99 percent over bank base rate) with a maximum loan-to-valuation
of 75 percent and a fee of £999;

• 8 percent interest in a Regular Saver
account fixed for 12 months;

• A 12-month fixed rate cash ISA paying up to
2.85 percent;

• UK roadside breakdown assistance with a
HomeStart upgrade available;

• Worldwide family travel insurance;

• Fee-free ATM access abroad;

• Global customer recognition and emergency
cash facility;

• International account opening

• A discounted overdraft rate of 17.9 percent
EAR (typical) compared to the bank’s standard rate of 19.9

• £3,000 of life insurance cover and 50
percent discount on LifeChoices premiums;

• 10 percent cash back on personal loan
interest costs, and

• Identity theft assistance and advice.