HSBC launches its first Trade Finance API
The Hong Kong Trade Finance Platform Company Limited (HKTFPCL) is a wholly-owned subsidiary established by HKICL Services Limited (HSL) on 6 February 2018. It is a single-purpose company with an aim to providing trade or trade finance platform to local and overseas participants through a digitalised trade finance platform developed using the distributed ledger technology (DLT).
HKTFPCL is the administrator of the platform.
Introduction of eTradeConnect
Trade finance, as an integral part of the local and global trading systems, has been paper-based for as long as trade existed. Automation or digitalisation of the trade finance processes has proved to be difficult because multiple parties and banks in different jurisdictions are involved in a single trade transaction. However, the emergence of DLT has made the move into the digital era possible. Following the success of the proof-of-concept project on the use of DLT to build a trade finance platform in Hong Kong in 2016, a platform using DLT has been developed to replace the inefficient paper-based trade finance system. Tapping the immutable, transparent and traceable nature of DLT, trade-related documents can be digitised and stored in the platform for transmission and distribution among trade ecosystem participants, including buyers, sellers, import and export banks and logistics service providers, etc in a secure manner.
The platform can not only help move the formerly heavily paper-based trade finance system into the digital era but also achieve various advantages. These include (i) sharing of trade finance documents among participants on a real-time and "need-to-know" basis for protection of data privacy and security; (ii) enhancement of transparency of transactions which operates on an open account basis so that trading terms of a purchase order become more visible to all relevant participants; (iii) lowering of the risk of fraudulent financing as trade data stored in the platform can be verified and cross-checked; (iv) reduction of the risk of duplicate financing and subsequently encouraging banks to provide trade loans; and (v) standardisation and digitisation of trade documents help reduce reconciliation efforts and human errors.
Go to eTradeConnect Portal