HSBC trials confidential computing to address $2.5trn trade finance gap

HSBC has partnered with not-for profit blockchain technology consortium Global Shipping Business Network (GSBN) on a confidential computing proof-of-concept as part of plans to “transform” trade finance.

GSBN describes confidential computing as a new privacy-enhancing technology designed to protect data at the hardware level. It is used in scenarios that require more complex data collaboration processes, such as those used in trade finance.

The partnership aims to bridge the financing gap in the trade finance industry, which is estimated to reach $2.5 trillion by 2025, according to the World Economic Forum.

GSBN says that many applications for funding are simply rejected because of a lack of information, with the organisation adding that HSBC’s proof-of-concept is a response to this “unmet demand”.

The collaboration will use blockchain technology to share data and insights from various organisations involved in a customer’s supply chain. This will ensure banks can tailor funding options which are appropriate to the business in terms of volume and individual needs, said GSBN.

Currently, banks must look at a client’s business by investigating data from multiple sources including trade routes and counterparties. This can only be obtained by asking customers to produce paper documents, which can lead to a long review time, explained the organisation.

Commenting on the news Aditya Gahlaut, HSBC managing director and head of global trade and receivables finance, Hong Kong and Macau, said: “Alternative data opens a new path to simplifying trade finance as it allows banks to gain more timely, accurate and relevant insights of clients’ activities.”

He added: “We will continue to leverage the latest technology and collaborate with different stakeholders in the industry to make trade finance faster, easier and more accessible for importers and exporters.”

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