Global Shipping Business Network (GSBN), an independent, not-for-profit technology consortium to build a blockchain-enabled operating system designed to redefine global trade, welcomes 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.
According to the International Chamber of Commerce (ICC), there is an estimated trade finance gap of USD 1.5 trillion projected to grow to USD 2.5 trillion by 2025. The mandate of the Trade Finance Advisory Group is to help bridge this financing gap by helping partner institutions improve their existing processes, by leveraging trusted digital data from supply chains. In turn, this will help enhance financing support for small and medium enterprise, many of which have been deeply impacted by the COVID-19 crisis.
The announcement builds upon the recent growth of GSBN, following the rollout of its Cargo Release application across Asia and partnerships with 8 major port groups in China.
Bertrand Chen, CEO at GSBN, said, “The COVID-19 pandemic has demonstrated many areas where paper can be eliminated in favour for more efficient, trusted digital systems. 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 $1.5 trillion trade finance gap. Breaking siloes between supply chains and trade finance is critical part to unlocking new value in global trade, which is why we’re delighted to have three financial leaders join our mission.”
The advisory group will explore the technical, legal and regulatory frameworks needed to break the siloes between the global supply chain and financial institutions. Furthermore, the group will also work together to test digital solutions such as electronic Bill of Lading and other supply chain data to improve the financing process for banks.
James Ho, Deputy General Manager of Transaction Banking Department from Bank of China (Hong Kong) ("BOCHK”), said, “BOCHK is pleased to deepen our collaboration with GSBN by becoming a key member of the Trade Finance Advisory Group. We have been actively supporting the cooperation between the finance and the shipping industries to facilitate trade and create value for all stakeholders in the supply chain. Early this year, we became the first financial institution to partner with GSBN to accelerate digital transformation of the shipping industry. We look forward to contributing further to the efforts to reshape the future of trade finance ecosystem with a view to benefitting all parties involved ultimately.”
Sriram Muthu Krishnan, Managing Director & Group Head of Product Management from DBS Bank, said, “SMEs face multiple challenges on the road to economic recovery after the pandemic. On one hand, they have the challenge of growing revenues while on the other, they continue to be hampered by cumbersome, paper-based processes that create friction when accessing trade finance. Data and digitalisation can help businesses to be more efficient, while providing greater comfort to financiers. As a global leader in trade digitalisation and innovation, DBS is committed to contributing towards a thriving and frictionless global trade ecosystem. Bringing shipping and logistics players onto a digital ecosystem will enable critical information and documents to be seamlessly shared, processed and transacted between the multiple participants in the trade flow. 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.”
Ajay Sharma, Regional Head of Global Trade and Receivables Finance, Asia Pacific at HSBC said, “HSBC is the world’s leading bank for trade finance and has been at the forefront of trade digitisation. Through our collaboration with GSBN and our investments in fintechs such as Contour, 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. We look forward to working with GSBN, our peers and stakeholders to drive trade transformation and create new opportunities.”
As part of GSBN’s rapidly growing ecosystem of members that including the likes of COSCO, Hapag-Lloyd, Hutchison Ports, OOCL and PSA, the Trade Finance Advisory Group will also benefit from collaboration and co-creation opportunities with various market participants.
(From left to right) With Mr. Kenny Ye, Chief Operating Officer at OOCL, witnessing the GSBN Trade Finance Advisory Group MoU Signing Ceremony, Mr. James Ho, Deputy General Manager, Transaction Banking Department at Bank of China Hong Kong, Mr. Alex Cheung, Managing Director and Head of Institutional Banking Group at DBS Hong Kong, Mr. Aditya Gahlaut, Head of Global Trade and Receivables Finance for Hong Kong & Macau at HSBC and Mr. Bertrand Chen, CEO at GSBN signed the MoU on behalf of their organizations.