KUALA LUMPUR: HSBC Bank is banking on blockchain transactions for trade as the next potential growth area, in line with the group’s heavy investment to embrace technology.
Asia Pacific Group general manager and regional head of commercial banking Stuart Tait said blockchain would be a great way to make trade transactions more efficient given its positive features – secure, trusted and a quicker form of transaction – that would boost trade in the future.
“We expect to handle more blockchain transactions for trade. It’s a really great area for us to focus on because we handled about 100 million pieces of paper every year just in trade finance and blockchain technology can be used to digitalise the documents.
“Instead of taking five to 10 days to transfer the (trade) documents, blockchain transactions can be completed within 24 hours,” he told reporters after a media briefing on trade, digital innovations and new opportunities in Asean and Asia regions here yesterday.
Tait said HSBC was planning to invest between US$15bil and US$17bil from 2019-2021 to embrace new technology and digitalisation.
He said Asia would be a heavy recipient of that investment, given its substantial profit contribution of about 80% to the group.
“As one of the important markets in the region, Malaysia will receive a good share of that as well,” he said.
In May 14, 2018, HSBC set a record for being the first bank in the world to execute a live trade finance transaction which involved a bulk shipment of soybeans from Argentina to Malaysia, via Cargill’s Singapore subsidiary as the purchaser.
Asked on blockchain transactions’ contribution to the banking group’s profit, Tait said no financial contribution was expected in the near-term as it might take three to five years for the segment to scale up.
“Trade transactions involve multiple parties such as buyers, sellers, banks, shipping companies, insurance companies, customs, government officials and on it goes.
“It is going to take a while for all these parties to come together and be comfortable about things like blockchain,” he said, adding that HSBC was currently in talks with several parties for potential new blockchain transactions. — Bernama