HSBC is a global banking and financial services organisation headquartered in London. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865 to finance trade between Asia and the West.

It now has some 6,600 offices in more than 80 countries and territories across Africa, Asia, Europe, North America and South America, and around 58 million customers. HSBC is the world’s largest bank by assets with $2.693 trillion as of 31 December 2012.

HSBC is organised within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Retail Banking and Wealth Management; and Global Private Banking.


In 2010 HSBC Retail Banking and Wealth Management selected Oxford Risk to participate in a three day Global Customer Risk Profiler Workshop. The conclusion of the workshop was that the development of a Global Customer Risk Profiler was both viable and appropriate. HSBC wanted to instigate a consistent approach to profiling across its major wealth markets. It saw significant advantages in having a common standard that could link to investment solutions that were globally delivered. In particular HSBC expected not only cost savings but as important a common approach to risk management and a reduction in the banks overall risk exposure.

Practically the Global Risk Profiler needed to be locally relevant and compliant, and, as much as possible, use the same core methodology, item set and scoring methods, whilst reflecting local market languages and culture.

Oxford Risk was commissioned to produce the profiler, which is primarily for use with the bank’s Premier customers.


Oxford Risk considered the various regulatory regimes that needed to be satisfied, before creating a market and culturally neutral Risk Tolerance Assessment. This comprised 16 items, which also revealed the customers’ composure. The assessment was developed with reference to five key initial markets, these being the UK, USA, Hong Kong, UAE and France. Both the qualitative and quantitative testing were conducted using resources and sample investor populations drawn from these markets. Local language and English item versions were rigorously evaluated to ensure cultural and linguistically equivalent items and item sets were derived. Accuracy, reliability and repeatability were assessed to ensure acceptable minimal standards in each market. Where necessary, extra item sets were developed for those markets with additional regulatory criteria. For example, for Hong Kong an investors ‘Knowledge and Experience’ index was devised together with a scoring algorithm to apply this to a customer’s Risk Tolerance score.

The finished assessment was calibrated for each market using an empirical study of local investors’ preferences. This produced a risk level dimensioned by Time Horizon, which showed which of HSBC’s world selections portfolios were likely to be preferred by customers in each of the six defined risk categories. Oxford Risk also advised HSBC how to incorporate goal-based questions on certainty at outcome and journey risk to aid suitability planning.


By the end of 2012 HSBC had deployed the Global Risk Profilers in several key markets and plans more in 2013. In each market the deployment has helped tighten engagement processes, improve advice consistency and reduce the risk of non-compliance. Advisors have found the profiler effective and customers have found it easy to use and relevant.