HSBC, a British multinational bank and financial services holding company with over $2.5 trillion in total assets, has teamed up with Cainiao, a China-based logistics company, in order to provide faster trade finance loans to merchants via Alibaba’s Tmall platform in Hong Kong.
HSBC will reportedly be using third-party data on customer background, real-time inventory and operational status, which has been provided by Cainiao, in order to help with the loan approval process. Applicants will not have to provide any collateral or financial statements in order to qualify for loans, which is notably a first for the banking institution in Hong Kong.
The package, which aims to approve and offer trade finance loans of $500,000 (maximum) within a week, will be offered to 1800 eligible vendors that use Alibaba’s Tmall portal.
The lender will consider expanding this service to other digital commerce solution providers, according to a report published by the South China Morning Post (SCMP).
In statements shared with the SCMP, Jeanny Ip, head of global trade and receivables finance, Hong Kong and Macau, HSBC, noted.
“We see big data and other emerging technologies as a huge opportunity to offer innovative solutions that make financing easier for our customers.”
HSBC’s collaboration with Cainiao might support new businesses by using Big Data analytics to simplify and expedite the loan approvals process, Jeanny said.
Louis Tse Ming-kwong, MD of venture capital asset management at HSBC, stated:
“HSBC is the first local lender to launch such a partnership with a technology company, to use big data to approve trade finance lending. It will have first-mover advantage.”
Louis added:
“Eight virtual banks are starting operations this year. The competition will be keen. HSBC and other traditional lenders will need to offer more digital banking products and services to compete for a tech-savvy younger generation of customers.”