By Stephen Morris for Bloomberg
HSBC Holdings Plc is seeking office space in technology-focused London neighborhoods including Shoreditch to bolster its fintech capabilities, according to two people with knowledge of the move.
Europe’s largest bank hired real estate broker CBRE Group Inc. to find 50,000 square feet (4,600 square meters) of space, almost the same size as an American football field, in areas including Old Street and Shoreditch, the people said. The neighborhoods are home to a cluster of startups and a nexus of hipster culture. The office will be focused on digital growth at the bank, the people said.
HSBC would join other firms that already operate technology-focused offshoots in east London neighborhoods, such as Barclays Plc’s so-called fintech accelerator in Whitechapel. While the bank in February decided to keep its headquarters in London rather than move to Hong Kong, it’s expanding out of its 45-floor skyscraper in Canary Wharf. HSBC plans to move 1,000 retail bank workers to Birmingham, Britain’s second-biggest city, to cut costs and separate its U.K. consumer operations from the investment bank.
Banks have traditionally kept their research and development in-house, building proprietary systems behind closed doors to shield them from the competition. However, as the cost of developing new technologies rises and more nimble startups pioneer new ways to bank, many established lenders are becoming more open to external partnerships.
Citigroup Inc., Banco Santander SA, UBS Group AG, Wells Fargo & Co., and Banco Bilbao Vizcaya Argentaria SA are among some two-dozen financial giants hosting accelerators, hackathons and competitions to bring startups to their doors. Some, such as Barclays and Royal Bank of Scotland Group Plc, have dedicated floors for digital development, with markedly different decor and dress codes to attract younger staff that would otherwise gravitate toward the technology industry.
Rents for the best office space in Shoreditch are about 65 pounds ($85) a square foot annually, compared with about 47.50 pounds in the Docklands and 70 pounds in the City of London financial district, according to data compiled by broker Jones Lang LaSalle Inc.