HSBC announced at Sibos on Wednesday that it is expanding the trade financing solutions it offers to businesses trading on e-commerce platforms in mainland China and Hong Kong, following the successful launch of its collaboration with Dowsure Technologies.
Small and midsized enterprises (SMEs) typically face challenges securing trade finance, but by using real-time commercial data through Dowsure, HSBC can offer finance to sellers based on their transaction data. Dowsure, a lending partner of Amazon, provides HSBC with the interface, while Amazon offers merchant data on the Amazon platform.
“This is a huge opportunity for suppliers and e-commerce platforms,” says Vivek Ramachandran, head of Global Trade Solutions: HSBC. “As an SME business customer on a large marketplace platform, like Amazon, Alibaba or XYZ.com, you can secure financing. You can click at the point of purchase to pay now or after 30 days. The large seller knows you and has a relationship with you, so giving you that stud page enhances sales.”
Ramachandran says it is a commercial decision for the large seller to make that decision thanks to their trust in the data and the relationship from previous sales. “I know you would come back to me so we can actually place embedded finance into the journey.”
He is exuberant about what this could mean for SMEs, saying, “This is where the next wave of innovation in trade finance will come from because eCommerce has moved faster than financing, and we need to change. Sellers on eCommerce platforms are small business customers to large and this will hopefully start making financing a lot more accessible today.”
Historically, trading relationships were built on intimacy. With the availability of so much data, Ramachandran says you can trade anonymously but still retain the trust built up through good experiences and consistency.
