Asia Business Channel

HSBC bullish on Asia and plans for invest in Blockchain for Trade Finance

 

“The prospects for Asia remain bright. Companies are telling us that they’re confident, especially companies in Southeast Asia and the confidence levels here are high compared to the rest of the world,” said Stuart Tait, group general manager and Asia-Pacific regional head of commercial banking of HSBC Bank, in a media briefing on March 12.

Despite the trade tensions between the United States (US) and China, HSBC expects 2019 to be a strong year. “Companies are trading in much the same way as they have been in the run up to the tensions and discussions between China and the US.” While some larger companies have shifted production locations, there has not been a large scale move of supply chains. “It may or may not happen,” said Tait.

As for upcoming technology investments, the HSBC group has set aside $15 ~ $17 billion USD for the next three years. While the exact figure for the ASEAN region has not disclosed, Tait said Asia would be a “heavy recipient” of the investment since 80% of the group’s profits comes from the region.

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In the near future, one of HSBC’s main focuses will be on blockchain technology for trade finance. “It’s a really good area for us to focus on because we handle about a 100 million pieces of paper every year just in trade finance,” explained Tait, adding that blockchain digitizes documents and quickens the process from five to 10 days to 24 hours.

In May 2018, HSBC and ING Bank performed the world’s first blockchain trade transaction when they worked with agriculture firm Cargill to finance a shipment of soybeans from South America to Malaysia. “Since then we’ve had other transactions in India and Singapore. As time goes by, we expect to handle more and more.”

Tait explains that it takes collaboration and co-creation for blockchain for trade to take off. “It’s great that the regulators are involved. Although we’re by far the world’s largest trade bank, we know we can’t do it on our own but we want to play a leading role.”

 

 

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