Hong Kong Monetary Authority (HKMA) launched its new blockchain-based banking trade finance platform on Wednesday, in the de facto central bank’s latest move to push the city’s burgeoning fintech sector.
The platform, “eTradeConnect”, combines the services of 12 major domestic and international banks including HSBC and Standard Chartered Bank to enhance cross border trade, officials said, and will link up with another blockchain platform called “we.trade”, to allow better trading among a network of 14 European banks including Deutsche Bank, Rabobank, and UBS.
“Hong Kong has to develop digital banking to maintain its competitiveness,” said HKMA chief executive Norman Chan Tak-lam, as he joined senior executives from the 12 participating banks at the opening of Hong Kong Fintech Week 2018.
“We are in the process of turning Hong Kong into a smart banking city where banks adopt new technology to offer customers cheaper, easier and simpler banking services.”
The eTradeConnect is one of seven flagship initiatives revealed last year by HKMA to promote smarter banking in Hong Kong.
Other Hong Kong banks taking part include Hang Seng Bank and Bank of East Asia as well as the local units of leading mainland players including Bank of China, ICBC and Agriculture Bank of China. It also includes international player such as DBS, BNP Paribas and Australia and New Zealand Banking Group.
Officials said the platform allows customers to trace records and manage their trade finance cheaper and quicker.
Howard Lee, HKMA’s deputy chief executive, said this shows how willing the local financial sector is to embracing the very latest technology.
“Our next key milestone is to link eTradeConnect with platforms from other regions to enable cross-border trade financing.
Our next key milestone is to link eTradeConnect with platforms from other regions to enable cross-border trade financing
Howard Lee, HKMA’s deputy chief executive
“The connection between eTradeConnect and we.trade paves the way for the digitalisation of cross-border trade in Asia and Europe,” Lee said.
Diana Cesar, HSBC’s chief executive in Hong Kong, said the city still has an important role to play in “reshaping how global trade is financed”.
“Trade finance has been a heavily paper-based industry, with transactions worth over US$9 trillion in 2017. The eTradeConnect platform provides our customers with an improved digital experience, including faster turnaround times and a way for each to see the steps involved from purchase order to financing,” Ceser said.
Mary Huen, chief executive of Standard Chartered Hong Kong, added: “Many of our clients, especially SMEs, have expressed their interest in getting on board the platform.
“We are confident eTradeConnect will contribute to promoting Hong Kong as a major regional trade hub.”