Hang Seng Bank embarks on digital journey for its trade finance business

It has a solution that can recognise the type of documents being scanned and extract data from images.

With global trade banks estimated to save in excess of $2.5b by adopting integrated digital solutions, Hang Seng Bank is deploying technologies that aim to quickly address the pain points commonly associated with the paper-intensive process. In Hong Kong, regulators are taking charge especially after the launch of blockchain-based trade finance platform called eTradeConnect in October 2018 that aims to improve trade efficiency, reduce risks and facilitate trade counterparties to obtain financing by digitising trade documents, automating trade finance processes and leveraging the features of blockchain technology.

In an exclusive interview with Asian Banking & Finance, Jenny Yuen, head of global trade and receivables finance at Hang Seng Bank shares the firm’s efforts towards more efficient and paperless services.

Can you share with us Hang Seng Bank’s experience following the launch of eTradeConnect in late 2018?

The e-TradeConnect covers the functions to deal with the basic needs of open account trade, including purchase order and invoice creation/management and financing on these authenticated trade transactions which are essential in trade transaction workflow. The functionalities are undergoing enhancements this year and we expect the market receptiveness will continue to increase.

What are the latest measures unveiled by the Hong Kong aside from the eTradeConnect to make sure that trade finance will continue to flourish?

Whilst trade is traditionally a paper intensive business, we go for a paper-less direction to gain efficiency. For example, we have developed online document box and other electronic channels for customers to upload documents by themselves. We have also introduced auto-data input technology – the optical character recognition (OCR) solution to speed up the data input and document classification time. What’s more, we are looking for more cross-border collaboration and connection with other banks in domestic and cross-border locations.

Amidst the challenging operating environment, we see new potential such as IT, cloud services, service trade. To provide tailor-made professional services, we have built integrated teams of relationship management and client services that provide specific solutions and advices for commercial customers from different industries.

Can you share some new digital efforts or technologies that you have applied to boost your trade finance arm?

The trade transaction tracker delivers a new, simple and easy tool on the Hang Seng business banking mobile app, enabling customers to track the status of their trade transactions with real-time information. Customer can now get immediate update on their transaction status such as whether the application has been received, or whether the bill is being processed and if it is accepted), and whether funding could be arranged.

Meanwhile, the Document Box is a digital workflow solution that allows customers to upload multiple documents such as invoices, purchase orders and delivery proofs via a secure customer portal without the need to visit branches. Another solution is the Optical Character Recognition (OCR) which is a cognitive automation tool to recognise the type of documents being scanned and extract data from the image, and populate the data into workflow document management system instantly. We target to shorten the processing time by 10-15% (around 4-10 minutes per transaction), and improve the data extraction accuracy to 90%.

The bank also has simple and direct digital channels that integrate with the increasingly mobile business lives of our commercial customers, including an AI chatbot which has machine learning technologies to handle general customer enquiries on products and service features, a live chat with a round-the-clock online customer service channel, and a WeChat Official Account that sends notification of service updates and account activity.

What are the challenges that banks face when financing trade and how is Hang Seng Bank addressing them?

As some of our newly acquired trade customers comes from PRC corporates, our servicing teams must be able to understand industry norm and operating model, and identify cross-border business needs. We have therefore integrated our mainland and Hong Kong teams – both frontline and backend offices – to work closely together throughout the entire service delivery process, such as site visit to customers’ mainland operation. We are also investing in staff training to equip our professional teams with knowledge in different areas such as technological developments, compliance, etc.

What initiatives do you have to capture the opportunities from enhanced connectivity links?

Construction industry will be one of the major beneficiaries under China’s Belt and Road initiative, with growth potential in areas such as trade of raw materials. We are strengthening our collaboration with our Hang Seng China team. We offer end-to-end solutions that enable customers to collect sales proceeds and utilise banking facilities in Hong Kong and China in building production plants. Meanwhile, GBA’s enhanced connectivity within the area will bring more opportunities to trade, especially in the area of service trades and supply chain management. Therefore, we are providing more structured trade solutions, such as cross-border trade solutions, off-balance sheet financing. We also collaborate with our China and Macau teams to deliver seamless relationship management services.