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Industry roundup: 16 March

HSBC and HKTVmall partnership using commercial data for faster trade finance

Last month, HSBC and HKTVmall began a partnership that aims to use commercial data to roll out a simpler and faster digital trade finance solution for the e-commerce market in Hong Kong.

Under the partnership arrangement, a programme that makes it easier for merchants to get access to digital trade finance will be launched later this year. HKTVmall will provide merchant data including turnover and refund records of different types of goods for HSBC to analyse and forecast business performance during credit assessment and monitoring process.

HSBC and HKTVmall are participants of the Commercial Data Interchange (CDI) project, initiated by the Hong Kong Monetary Authority (HKMA) with a view to enabling more efficient financial intermediation and enhancing financial inclusion in Hong Kong. Both parties will also collaborate on using big data analytics and API technology to enhance the customer experience.

A pilot scheme has already extended offers of digital trade finance solution based on merchant’s turnover data provided by HKTVmall. The pilot digital trade loan was provided to Cleanic Cleaning Equipment, a household cleaning equipment and tools company.


DBS closes first transaction on Antchain's Trusple platform

Following the official launch of Trusple, AntChain’s international trade and financial services platform, DBS has announced that it is the first Asian bank to successfully close a trade financing transaction on the platform, valued at over US$40,000. The transaction was closed on behalf of iQuartz, a Singapore SME that manufactures, fabricates and distributes artificial stone materials known as ‘quartz stone’ to its US and Singapore customers in the building materials market.

Previously, SMEs such as iQuartz would have had to endure lengthy manual processes and complex paperwork when engaging in cross-border trade with overseas suppliers. This would result in long delivery cycles that could drag for months and in turn delay iQuartz’s receipt of goods, impacting its operations and hindering its ability to seize new business opportunities.

With Trusple, iQuartz’s trade order was immediately registered on the blockchain, enhancing transparency and giving iQuartz greater oversight of its supply chain. Once the trade commitment has been fulfilled and acknowledged digitally, DBS will also facilitate payment to iQuartz’s supplier automatically via the platform.

"SMEs are increasingly looking to tap on regional opportunities to access new markets and fortify their supply chains but are often daunted by complex trade processes," said Joyce Tee, group head of SME Banking at DBS. "By leveraging emerging technologies such as blockchain, DBS is lowering the barriers for SMEs to participate in Asia’s post-pandemic economic revival as cross-border trade activity in the region picks up."

"It’s important for SMEs like us to connect with the broader business community in Asia, and that’s why we took steps to diversify our supply chains overseas right from the start," added Joshua Huang, chief financial officer of iQuartz. "But the trade documentation and financing processes were very tedious and took up a lot of our employees’ time. We found the Trusple interface easy to navigate and intuitive, giving us much better visibility of our supply chain. Our experience has been positive, and with DBS’ support, tapping on cross-border trade is now easier than ever for SMEs. The partnership between DBS and Trusple will greatly facilitate our growing purchase of raw materials from China to support iQuartz’s current business growth trajectory to be one of the biggest manufacturers of quartz stone in Southeast Asia."


Finastra joins FedNow pilot programme for US instant payments 

Finastra has announced that it has joined the Federal Reserve’s FedNow pilot programme to support development, testing and adoption of the FedNow Service. Finastra joins other banks, credit unions and payments technology organisations in the FedNow Community to help shape the future of payments and develop use cases that leverage FedNow functionality.

The FedNow pilot programme is designed to support development, testing and adoption of the FedNow Service, and to encourage development of services and use cases that leverage FedNow functionality. As a part of the pilot, Finastra will help shape and provide input into the service and adoption roadmap, industry preparation, and overall instant payments strategy. Pilot firms will also have the opportunity to work with the FedNow Service prior to general availability.

Finastra’s payment solutions include immediate/real-time payment schemes, open APIs, artificial intelligence, and cloud computing. With a suite of integrated solutions for financial institutions ranging from the world’s largest banks to community banks and credit unions, Finastra says it provides the technology platform to take payments systems forward on a road to modernisation.


EBA reports on the monitoring of the LCR implementation in the EU

The European Banking Authority (EBA) has published its second report on the monitoring of liquidity coverage ratio (LCR) implementation in the EU. This report, which complements the one published on 12 July 2019, highlights areas in which further guidance is deemed useful for banks and supervisors in order to foster a common understanding and harmonisation of the application of the liquidity standard across the EU, as well as to reduce some level playing field issues. The EBA will continue regularly monitoring the implementation of the LCR for EU banks and will update these reports on an ongoing basis to set out its observations and provide further guidance, where necessary.

The general objective of the EBA monitoring work in the area of liquidity is to foster a higher degree of harmonisation in the implementation of the LCR in the areas where divergent practices have been observed, partly due to insufficient clarity of the regulatory provisions.

In particular, this second report provides guidance on the treatment of fiduciary deposits, LCR optimisation risk, interdependent inflows and outflows and assessment of deposit guarantee schemes (DGS) conditions for a 3% outflow rates in stable retail deposits. In addition, the report discusses a number of items in the context of a crisis, in particular in view of the COVID-19 pandemic: the usage of liquidity buffers, guidance on unwinding mechanism waivers, recourse to central bank support and additional outflows from derivatives. Finally, the report assesses the effects of the guidance issued in the first Report.

The EBA says it will further assess how the guidance provided in the report will be used by banks and supervisors and consider taking further steps, if needed (including some fully fledged products such as guidelines, recommendations, etc.), while continuing its monitoring of the aspects mentioned in the report.

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