HSBC Targets India’s Affluent Diaspora with New Products and Services

HSBC Holdings Plc is testing a variety of new products and services to attract more business from India’s wealthy diaspora, who sent over $100 billion back home last year. The bank plans to offer dollar-denominated products to non-resident Indians (NRIs) from GIFT City, a low-tax financial hub in India. These products might include savings accounts, insurance, fixed income, and other investments.

Additionally, HSBC has opened a virtual experience center in the metaverse for NRIs. This virtual world, accessible through VR headsets or QR codes, allows users to explore credit cards, banking products, and investments using avatars.

More than 32 million Indians live outside the country, mainly in North America, the UK, and the Middle East. Wealth managers like HSBC, Barclays Plc, and UBS Group AG are competing to attract business from this affluent group. Remittances to India from NRIs reached $112.5 billion in fiscal 2023, up from $89.1 billion the previous year. Many NRIs are interested in investing in India’s growing economy using US dollars.

Banks are turning to Gujarat International Finance Tec-City (GIFT City) to build their offerings for non-residents. Located north of Mumbai, GIFT City provides exemptions from many rules and taxes that typically hinder business in India. Prime Minister Narendra Modi aims to make GIFT City a wealth hub similar to Dubai, Mauritius, and Singapore.

The metaverse move aligns with HSBC’s goal to serve global Indians at every touchpoint, according to Sandeep Batra, head of wealth and personal banking for HSBC in India. The virtual bank features an amphitheater, premier lounge, beyond banking zone, overseas education lounge, and NRI oasis. Currently, it lacks transaction capabilities, but more products might be added in the future.

HSBC recently hired a senior private banking executive from UBS, who led a team serving wealthy Indians overseas. India’s wealth management industry could be worth $5.5 trillion by 2025, according to Bloomberg Intelligence analyst Sarah Jane Mahmud.