HSBC pioneers new digital ‘fast-track’ trade finance demand guarantee

HSBC has launched a pioneering new ‘fast-track’ digital trade finance demand guarantee to help customers trade internationally in a more seamless, secure and efficient way.

The solution allows customers to issue digitally processed guarantees that can be issued to a beneficiary in real time, reducing issuance times from a typical 3-4 days down to potentially minutes, marking a significant milestone for the banking industry.

The ‘fast-track’ digitally processed trade finance guarantee will be available to customers via HSBC Trade Solutions, the bank’s world-leading trade finance platform set up to digitise and simplify customer journeys, which is being deployed globally in 2024 and 2025.

The first transactions of this kind took place this month, with HSBC issuing a Tender Bond for the consultancy and accounting firm KPMG in Qatar and an Advance Payment guarantee for UK international corporate Russell Finex Ltd.

Vivek Ramachandran, Global Head of Global Trade Solutions (GTS) at HSBC said:

• “The digitisation of world trade is a driver of economic success. At HSBC, we are bringing together our extensive expertise and innovative technology solutions to make paperless trade a reality for our customers.
• “We have spent considerable time with our customers to understand how we can help their businesses succeed, and then brought together the best people and technology to design and build a capability that we genuinely see as a ‘game-changer’ in the industry.”

Wassim Maksoud - Director Finance, Administration and IT from KPMG Qatar said:

• “Digital Transformation, innovation and Technology solutions are key items on KPMG’s agenda. Partnering with HSBC Qatar to process the first STP (Straight Through Processing) bank guarantee issuance globally, with zero human intervention, and in a matter of minutes, makes a significant leap in the digitization of trade finance. We are excited to see more of such digital capabilities which we anticipate will open a world of opportunities in the industry”.
• “The introduction of the STP capability addresses a crucial challenge - meeting the timeframes set for submission of bank guarantees, thereby enabling us to proceed with our project proposals at pace”.

Demand guarantees and documentary trade solutions support businesses trading across the world by mitigating risk and providing confidence to both buyers and suppliers.

Digitally processed guarantees are one of several ground-breaking solutions that HSBC is delivering to facilitate the move towards the digitisation of trade, and support clients in preparation for a digital future.

Earlier this year, the bank launched HSBC TradePay, an industry first, document-free trade finance solution that enables clients to instantly drawdown pre-approved trade loans and pay suppliers, with payment processing speed of under a minute.

It also recently extended its Mobile Trade Transaction Tracker service to financial institutions; and in 2022 it launched HSBC Trade Solutions, a holistic transformation of the way the bank interacts with clients to process trade finance transactions.