Ken Harvey, HSBC's chief information officer, told analysts at a presentation that the bank's annual technology budget will rise by four per cent next year to just under $5 billion. The uplift in spending will be recovered by a 16% rise in transactions and a targetted ten per cent cut in processing costs, he said.

Harvey says the bank is experiencing the benefit of scale economies in procurement, development and deployment of technology across its global network.

"We have the ability to test and learn and then export the winners quickly to address the powerful changes in customer behaviour that are transforming how we serve our customers," he told the meeting.

As an example, he pointed to a $43 million annual saving made by the group-wide roll out of the Whirl credit card platform inherited from its 2003 acquisition of Household Finance.

He said the bank managed to cut 8.8% off all transaction processing costs last year and is on track to knock a further 11% off this year.

The bank said that in the first half more than 70% of all transactions were coducted through remote channels, including Internet, telephone and ATM. In Hong Kong, the figure was nearer to 90%. Direct channel revenues in the period rose 29% from a year earlier, with online revenue up 70%.