Zing's fall, what can be read between the lines?

Quick context

• January 3rd, 2024?—?HSBC launched Zing on an attempt to compete with Wise and Revolut on the fast-growing market of cross-border payments
• January 24th, 2025?—?HSBC announces the closure of Zing due to changes in strategic business priorities, one year after being launched

We will unfortunately be closing the Zing app in the coming months due to changes in strategic business priorities.

Although the above doesn’t comes as a surprise, and is in line with the announcements made since the new CEO took office (in September 2, 2024), there are multiple things that can be learned, and read between the lines.

Failure #1?—?Late and lack of innovation?

Time to market is essential when there is no additional value proposition to existing offering. Zing was launched late, it arrived to a market in which users already expected fast, transparent, and cheap cross-border payments.?

Without any additional edge, why would users prefer their ‘me too’ option vs. the one already offered by Wise and Revolut?

To succeed in today’s market, financial institutions need to keep users in their core. This implies having a clear value proposition for their present needs and being one step ahead to anticipate where the market is going?—?even if that means disrupting your own business model.

Failure #2?—?The worst of both?worlds?

In the ideal scenario, Zing could have benefited from the ‘agility’ of a Fintech, while leveraging on the global footprint, user base, brand trust, and FX and cross-border expertise that HSBC has.

Nonetheless it was not the case?—?Zing was released to the market as something new, fresh and ‘independent’. I question this last point as in reality it still lived within HSBC group structure, which in a way condemned them to fail.

To make it more explicit?—?a new brand with no users (as those are from HSBC bank), but with the legacy framework of the group.?

They came late, without any new innovation —at least Zing could have leveraged on the existing customer base for faster adoption?… but no. They just got the investment but all the same chains and risk-adverse stakeholders that have prevented HSBC to do this in their past attempts.

A lot of missed synergies and opportunities.

Failure #3 —House of?cards?

One of the biggest barrier for innovation in an organisation is conflict of interest. When there is no alignment within an organisation, usually the consolidated ‘actor’ tends to overpower the ‘incumbent’ with all the internal politics game.

Alignment between innovation and core business is key?—?specially when it might be perceived as the cannibalisation of a high-margin service with a clear revenue stream.?

When status-quo is prioritised, innovation dies.

Failure # 4— FOMO = weak business?plan

Usually it takes time for startups to start making a profit?—?specially when the ‘disruption’ involves a decrease in margins. A decrease in margins should be compensated by an increase in scale or new cross-selling opportunities; in order to to reach ‘break-even’ (compared to previous situation).

It seems that Zing was doomed to fail the Fintech game— getting scale would have taken them years and cross-selling was simply impossible as an ‘independent’ entity.

Basically a ‘me too’ strategy gone wrong due to the fear of missing out (FOMO).

As a payments industry insider, the above is my humble interpretation of the fall of Zing. Some food for thought…?

1. ?Is it an advantage or disadvantage for Fintech to be associated with incumbent banks?
2. Is organisational stability and fast-pace growth possible at the same time?
3. How to manage vertigo in big organisations that need to disrupt their own business models?
4. Compliance is always the go to smoke curtain?—?it doesn’t get old
5. Building a new house vs. repairing the existing one?—?which one has the highest long term ROI?
6. UX a 2nd class citizen?—?did someone thought on existing HSBC clients with this fragmented experience?
7. Was HSBC just trying to save another of it’s investments (Zing was built using Monese XYB banking platform)?
8. Have cross-border payments been commoditised already?

Zing came to disrupt cross-border payments, nonetheless its ‘me too’ product was ‘disrupted’ internally.