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HSBC bank deal expands ATM service, without fees

TheStar.com - HSBC bank deal expands ATM service, without fees

STUART LAIDLAW
BUSINESS REPORTER

Customers of HSBC Bank Canada will soon have free access to more than 2,000 more bank machines under a deal signed with the Bank of Montreal.

"We obviously hope to reach a larger customer base now that we can offer them a lot more convenience," HSBC Canada chief executive Lindsay Gordon told the Star yesterday.

The bank currently has a network of about 1,400 automated teller machines, or ATMs, that it shares with the National Bank and several credit unions. That network is expected to expand to 1,700 by spring, Gordon said.

The deal announced yesterday will give HSBC's customers access to BMO's 2,020 ATMs early next year as well. It is a one-way deal, however, so BMO's customers will not have free access to HSBC's network of ATMs.

While the bank's customers can make withdrawals through any ATM thanks to the Interac network, Gordon said, this deal will allow them to use BMO's machines without paying a service charge. As well, by late next year or early 2006, customers will able to make deposits through BMO's machines, something they can't do now.

It is the first time that HSBC has struck such a deal with another bank in any of the 76 countries in which it operates, Gordon said.

"It's kind of a major breakthrough," he said.

HSBC is one of the world's largest banks, with more than $1.1 trillion (U.S.) in assets. It is Canada's seventh-largest bank, with 170 offices. BMO has $262 billion (Canadian) in assets.

The deal announced yesterday will also expand the 18-year contract BMO has to handle back-office duties for HSBC, such as cheque clearing and cash management. As well, HSBC's deal with BMO allows its commercial clients to make deposits through BMO's branches.

Despite its large presence on the world stage, Gordon said, HSBC remains a relatively small player in Canada — something he hopes this deal will help change.

"We sell ourselves in Canada on the basis of being part of one of the largest groups in the world," he said.

"We have very good service and we have very good international connections, but we lack somewhat in terms of convenience."

Gordon would not say how much his bank is paying BMO to help it become more convenient.

Colin Henderson, BMO's director of self-service channel management, said HSBC is paying BMO based on volume, which helps his bank get better value out of its ATM networks.

"The more volume we can run through our ATMs, the more we can leverage our investment," Henderson said.

November 9, 2004 at 07:56 AM in Financial Services | Permalink | TrackBack (21) | Top of page | Blog Home