One of the missing links for TradeCard, a global online trade transaction settlement company, is about to slot in place. Dah Sing Bank has agreed to provide export finance to TradeCard users - albeit only those based in Hong Kong. Dah Sing will become the first Asian bank to provide online export financing via the TradeCard platform. "This is the dawn of a new era in trade financing in Asia," says Derek Wong, managing director of Dah Sing.
"Hong Kong is a well-regulated country; it has the potential to be a financial centre like London and New York," says Wong. "Hong Kong is also well-known for trade and has the best trading data. It is only natural for Hong Kong to be the electronic information centre."
Why Dah Sing? "Dah Sing Bank is clearly at the forefront of e-business in Hong Kong with the implementation of this cutting-edge international trade solution," says Guy Rey-Herme, president and chief operating officer of TradeCard.
Totally electronic
Dah Sing's solution is an online application for pre-export and post-export finance. In line with the paperless concept, the entire financing mechanism (from applications to payment) will be done electronically. The service will be available 24 hours a day, seven days a week.
Dah Sing, in turn, will have access to trade documents that have been created and stored on the TradeCard network, thus saving cost and time in creating, processing and transporting trade financing documents. But when it comes to the credit approval process, it's back to the fundamentals. The bank will be using the usual credit lending criteria to assess exporters - concentrating on cashflows and receivables rather than asset-based collateral.
Dah Sing concedes that conveniences stemming from the electronic processes utilized by TradeCard members will be taken into consideration when pricing its financing facilities. Initially, Hong Kong TradeCard members will have access to finance from Dah Sing,áthough the bank is considering extending this service to members in other countries.á
Open to offers
The alliance with Dah Sing is a non-exclusive agreement, and Rey-Herme says TradeCard would consider other partnerships. But are the global banks baulking at TradeCard? "Yes, perhaps a little," admits Rey-Herme. "Also, the decision-making process [to join TradeCard] takes a lot longer with global banks." But Rey-Herme believes global players are already changing their attitudes towards TradeCard, insisting: "They are beginning to understand us better." He notes that the global banks are under increasing pressure from customers to make heavilyápaper-based industries take the electronic route.
TradeCard has also made a little headway in the US. Comerica, the 24th largest banking company in the US, has agreed to offer TradeCard's services to its customers as an alternative to current international trade payment mechanisms. TradeCard utilizes Thomas Cook as its 'money mover'.
