The independent, not-for-profit technology consortium Global Shipping Business Network (GSBN) welcomes the Bank of China (BOC), DBS Bank (DBS) and The Hongkong and Shanghai Banking Corporation Limited (HSBC) to form the consortium’s Trade Finance Advisory Group for digitalising trade finance.
According to the International Chamber of Commerce (ICC), there is an estimated trade finance gap of US$1.5 trillion which is projected to grow to US$2.5 trillion by 2025.
The aim of the Trade Finance Advisory Group is to help bridge this financing gap by helping partner institutions improve their existing processes and by leveraging trusted digital data from supply chains. This will therefore help enhance financing support for small and medium enterprises, many of which have been deeply impacted by the Covid-19 crisis.
More specifically, the advisory group will examine the technical, legal and regulatory frameworks needed to break the siloes between the global supply chain and financial institutions and will also test digital solutions such as electronic bill of lading and other supply chain data to improve the financing process for banks.
“Given the symbiotic relationship between the shipping sector and finance, we must explore how we can connect with, and enhance banking processes to bridge the US$1.5 trillion trade finance gap,” noted CEO of GSBN, Bertrand Chen.
“Breaking siloes between supply chains and trade finance is a critical part of unlocking new value in global trade, which is why we’re delighted to have three financial leaders join our mission,” he added.
Deputy General Manager of Transaction Banking Department from Bank of China (Hong Kong) (BOCHK), James Ho said that BOCHK has been actively supporting the cooperation between the finance and the shipping industries to facilitate trade. “Early this year, we became the first financial institution to partner with GSBN to accelerate the digital transformation of the shipping industry,” he pointed out.
The Managing Director & Group Head of Product Management from DBS Bank, Sriram Muthu Krishnan stated that DBS will contribute to a global trade ecosystem by familiarising shipping and logistics players with digitalisation, and went on to add that “through this partnership with GSBN, and other like-minded initiatives, DBS looks forward to enabling wider access to trade financing and services for a truly digital journey across data, physical and financial flows.”
Furthermore, Regional Head of Global Trade and Receivables Finance, Asia Pacific at HSBC also noted, “Through our collaboration with GSBN and our investments in fintechs, we are utilising our market leadership to effect the digital transformation of the trade ecosystem, from minimising the use of paper in trade finance to converting clients to digital ways of working.”
