Previous attempts to digitalize documentary trade finance have fallen short because each project has focused only on a narrow slice of the entire paper-intensive process. Blockchain promises to address the current bottlenecks and offer a number of benefits, including faster turnaround times, as shown in this chart, improved service levels, and a way for each participant to see all the steps involved from purchase order to payment. Several potentially scalable blockchain platforms are becoming available, but to realize the technology’s potential, industry participants will need to agree on networks with common standards and business rules.
Sen Ganesh and Thomas Olsen are partners with Bain & Company’s Financial Services practice. Joshua Kroeker is Director and Blockchain Lead at HSBC Commercial Banking. Venkatraman P is Director and Global Head of documentary trade at HSBC. They are based, respectively, in Bangkok, Singapore, Hong Kong and Hong Kong.
Rebooting a Digital Solution to Trade Finance
Blockchain points the way to a comprehensive digital approach in the paper-based documentary trade business.
Written in collaboration with HSBC
HSBC Holdings plc, the parent company of HSBC Group, is headquartered in London. HSBC serves customers worldwide from approximately 3,900 offices in 67 countries and territories in our geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,607 billion at 30 June 2018, HSBC is one of the world’s largest banking and financial services organizations.