As a part of its retail transformation strategy, HSBC Bank USA spent over $130 million on innovation projects in one year on its U.S. operations. These projects range from less visible, but equally important, system upgrades on the back-end and more visible ones like installing Softbank’s robot Pepper in its New York flagship. The bank also has set aside a separate budget for a new core system, which is currently in the works, Jeremy Balkin, head of innovation at HSBC Bank USA, told Bank Innovation in this latest episode of Fintech Unfiltered.

Balkin has been at the helm of the bank’s innovation plan, orchestrating various system upgrades, and product roll-outs. Among other things, Balkin attributes the successful execution of these projects to HSBC’s attitude towards partnerships.

Indeed, during this year, HSBC Bank USA has partnered with large technology companies like Samsung and Softbank Group as well as well smaller, niche fintechs like R.I.-based wealth management platform Marstone.

HSBC Bank USA’s innovation strategy rests on the change in the bank service model, Balkin told Bank Innovation. “We moved from a branch dependent, one-on-one service model,” he said, “to a one-to-many service model through which we are serving customers outside the traditional ways.”

This is not to say Balkin thinks bank branches are going anywhere. In fact, quite the opposite.

HSBC Bank spent significant money to renovate its New York flagship office, which has been redone to look as elegant as possible with marble flooring and plush couches in the waiting area. The bank even renovated a section of the office in Jade green for its most exclusive card clients (Jade customers) to encourage branch visits.

And of course, there’s Pepper – the Softbank robot – HSBC unveiled in the summer.

“Just the idea to put a robot in a bank branch… maybe people didn’t take it too seriously,” Balkin said. But to Balkin’s relief, the robot worked.

The branch saw a 5-to-10 time increase in foot traffic and a 44% increase in new business, he said.

Listen to Balkin talk on this topic as well as HSBC’s other innovation milestones in 2018, what’s on the roadmap for 2019, as well as what the future of banking will look like, in his opinion.

See how Pepper works here.