HSBC launches online trade services

Small to medium companies can now open letters of credit and track trade transactions across the web.

HSBC has become the latest bank to endorse the internet evolution by adding trade services to its four-month-old Business Internet Banking platform. After a trial involving 100 of its SME customers, the service was launched in Hong Kong this week, with other countries to follow, such as Singapore later this month.

In its first phase, the trade components of the business platform allow clients to open letters of credit (or documentary credits (DC) as HSBC refers to them) and track the progress of their trade transactions. The trade services have been added as another menu item on HSBC's internet platform which was launched in August with a series of cash management functionalities. Since its launch 7,000 companies have enrolled on the site and about 2,000 of these are regular users of trade finance.

Speaking about the launch, head of trade services for HSBC, Alan Wilkinson said the internet platform differs from the bank's offline trade systems available through Hexagon because it is aimed at smaller companies with lower trade volumes. "Hexagon is a more expensive system to install and it is more complicated and costly to upgrade," says Wilkinson. "It is designed for larger corporates with higher volumes and bigger data storage requirements. The internet service is aimed at small to medium enterprises that have no more than 100 beneficiaries on the trade front."

Second and third phases of the internet platform are due in late 2003 and 2004. These will add the more functions to the site including: transfer of DC applications, import bill settlement, and the incorporation of Bolero and BoleroSURF initiatives. At the same time, HSBC has a roll-out schedule for introducing the site to customers located in different markets around Asia. The next to get it will be Singapore.

"As the platform develops it will start to attract larger customers," predicts Wilkinson. "Hexagon will still have a place in the market because of its ability to link into a clients ERP system but, over time, the internet platform will certainly attract customers of all sizes."

Bernard Yap, senior manager of trade services for HSBC, says the new service is a real time saver for SMEs, and that during the one-month trial period customers applied for more than 150 letters of credit. "Customers can save time and money because they no longer need to assign staff or use couriers to deliver DC applications," says Yap. "In addition to cost savings, we believe our new online trade capabilities can save our customers 50% of the time they usually need for handling trade documentation."

Yap expects that most of the bank's trade finance customers who currently use the business internet banking platform will eventually become converts to the trade functions on the site. "Once they have taken the time to set up the templates, they will never go back to paper-based DCs," he says.

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