HSBC announces completion of a pilot digital trade finance transaction

By Edil Corneille

HSBC Hong Kong has completed a pilot digital trade finance transaction for Smart Chain Enterprises whose Enterprise Resource Planning (ERP) system has been integrated with eTradeConnect. This is said to mark the first digital end-to-end trade finance transaction riding on the connectivity between the eTradeConnect platform and a customer’s procurement system.

Smart Chain is an apparel supply chain management service provider based in Hong Kong. Facilitated by HSBC, it was able to apply for trade finance on its own ERP system linked to eTradeConnect in a few clicks, allowing a one-stop execution. The company no longer needs to submit loan applications and drawdown documents manually through multiple systems, thereby completely digitising the trade finance journey end-to-end.

The client is also able to upload trade documents and transfer data of invoices directly to eTradeConnect, streamlining the data submission and documentation process.

Operated by the Hong Kong Trade Finance Platform Company, eTradeConnect is a blockchain-based trade finance platform that aims to improve trade efficiency riding on distributed ledger technology. A proof-of-concept was conducted last year to integrate the procurement systems of corporate customers to transform the traditionally manual and paper-based trade finance process.

Terence Chiu, Head of Commercial Banking, Hong Kong, HSBC said, “According to HSBC’s report Navigator: Building Back Better, 95% of businesses surveyed in Asia feel it’s critical to leverage technology to enhance or improve their work processes. We are pleased to participate in this pilot trade finance transaction that demonstrates how digitised trade is made even simpler and faster with integration of different platforms. We look forward to supporting further enhancement of eTradeConnect and helping clients compete in the evolving market conditions.”

HSBC stated that it is committed to digitising trade finance services and is an advocate of blockchain technology applications worldwide. HSBC China has recently completed a forfaiting interbank transaction with Bank of Communications on the China Trade Finance Inter-bank Trading Blockchain Platform (CTFU). HSBC is the first foreign bank to complete this kind of transaction on the CTFU platform. The bank also successfully executed the first blockchain trade transaction on the Wave blockchain platform from New Zealand to China.