HSBC to bring in new perspectives to trade finance sector | Sunday Observer

HSBC to bring in new perspectives to trade finance sector

HSBC Sri Lanka which is investing to transform Sri Lanka’s trade finance sector with tech and innovation, on Thursday got some of the experts in the banking and supply chain sectors to deliberate on two key business areas the bank is supporting.

The first is - HSBC Supply Chain Finance (HSCF) which is a web-based interface that ensures buyers’ efficient, swift, convenient and secure payment to their suppliers. The HSBC Supply Chain Finance (HSCF) platform that was launched on Thursday is 100% owned and supported by HSBC.

The second is Serai, which is a completely different entity that looks at the supply chain connectivity from a tech disruptor point of view.

HSBC’s senior staff members introduced the concepts to the bank’s corporate customers and the industry leaders at a forum named – The wave: Modernization, Digitization and Disruption of Supply Chain.

CEO HSBC Sri Lanka, Mark Prothero said HSBC is investing in Sri Lanka in digitization and disruption in the finance supply chain management sector.

“Over the last twelve months, we have financed turnover and import-export worth US$ 2.3 billion, and we have processed over 80, 000 trade transactions. We are investing in Sri Lanka to transform trade finance by digitizing and redesigning our client journeys,” HSBC Sri Lanka CEO Mark Prothero said.

Prothero was speaking at the launch of the HSBC’s latest supply chain financing technology platform in Colombo yesterday, which was attended by the bank’s corporate customers.

HSBC, which entered Sri Lanka or then Ceylon in 1892 to facilitate the growing tea trade at the time, has a significant market share in the country’s trade finance sphere, and also is the largest financier of the apparel sector.

He said, the HSCF platform currently supports over 20 languages such as English, French, Japanese, Chinese, Italian and German. Upon receiving goods and commercial documents (invoices) from suppliers, buyers easily upload the invoice file onto HSCF platform, and then approve those invoices in the system. Subsequently, the buyers’ bank (HSBC) will effect early payments to suppliers.

The supply chain finance helps optimize working capital, reduce supply chain costs and enhance the buyer/supplier relationship.

The e-solution will help save time, enhance transparency, reduce manual errors and provide quick and timely updates for all parties.

For buyers, the supply chain finance supports them in optimizing payment terms negotiated and agreed with sellers, increasing liquidity and boosting payment efficiency, resulting in supply chain cost reduction. By injecting liquidity into the supply chain, they can extend supplier network and enhance strategic supplier relationships. Furthermore, HSCF’s user-friendly interface allows buyers to upload a multitude of invoices with a single click. It can also provide accurate forecasts on future cash flow by extracting and analyzing data in various formats, supporting the business’s reporting process. The suppliers that buyers choose to join HSCF will receive early payments based on buyers’ credit ratings, resulting in competitive capital cost benefit.

With this programme, suppliers may effectively decrease Days Sales Outstanding (DSO) and enjoy additional increase working capital without leveraging bank credit lines. It also minimizes collection, cash management and insurance costs.

Through HSCF, they can request early payment for invoices based on business cycle demand, from there optimizing cash flow management. Payment risks from suppliers’ accounts receivables are minimized as suppliers receive early payments when joining the programme. Suppliers do not need to be HSBC’s customers or maintain accounts with HSBC.

Suppliers and buyers will receive the continuous and professional technical and transactional support from HSBC’s dedicated client service team.

This is the first supply chain finance on web-based platform launched by HSBC in Sri Lanka following its successful implementation in France, Canada, Australia, the United Arab Emirates, Singapore, Thailand, South Korea, Malaysia, Bangladesh and Vietnam.