Global Shipping Business Network (GSBN), an independent, not-for-profit technology consortium building a blockchain-enabled operating system designed to redefine global trade, today announced that its Trade Finance Advisory Group has reached a new milestone, with its first proofs-of-concepts for trade finance products since its inception in September last year.

Comprised of Bank of China (Hong Kong) Limited (BOCHK), DBS Bank and The Hongkong and Shanghai Banking Corporation Limited (HSBC), GSBN’s Trade Finance Advisory Group aims to build upon blockchain technology to digitally enhance trade finance, by improving the end-to-end operational efficiency as well as the transparency of data in the supply chain.

Following six months of close collaboration with the group’s partner institutions, GSBN has reached proofs-of-concepts for two trade finance products, Open Account and Letter of Credit, that harness trusted data direct from the shipping industry via GSBN.

For Open Account, applicants can authorise their bank to directly inquire Bill of Lading data via GSBN’s blockchain-enabled platform for their proof of shipment. Similarly, for Letter of Credit, applicants can authorise their bank to use an electronic Bill of Lading (eBL) application built on GSBN’s platform to acquire relevant eBL information and instruct a title transfer.

Trade finance solutions are among the first banking focused solutions under development in GSBN’s growing suite of products. For small to medium sized enterprises (SMEs), these digitally enabled solutions enable accessible, fast and equitable access to trade finance. Meanwhile for financial institutions, this translates into better risk management, cost efficiencies and an overall better customer experience. GSBN has the long-term vision of integrating all products including its shipping product Cargo Release which cuts the time for cargo to be document-ready for release from days to hours, on its blockchain-enabled platform to deliver a one stop and unified user experience.

Bertrand Chen, CEO at GSBN, said, “The global trade finance gap is set to reach USD 2.5 trillion unless we harness technology to cut through the complexities and siloes between supply chains. Reaching proofs-of-concepts of trade finance solutions is a testament to the commitment and momentum of this group, that we are accelerating the development of scalable, real-world solutions to bridge this gap.”

James Ho, Deputy General Manager of Transaction Banking Department from BOCHK, said, “BOCHK has been a close partner of GSBN since 2021, with a goal to facilitate trade digitalisation process between the finance and the shipping industries. We see today’s milestone as a critical step in closing the global trade finance gap, contributing positively to the recovery of the global economy. We will continue to work together with GSBN to push forward the live customer pilots and look forward to bringing benefits of the innovative solutions to trading partners around the world.”

Sriram Muthu Krishnan, Managing Director & Group Head of Product Management from DBS Bank, said, “Removing friction from the trade finance process is essential to unlocking new value and growth for businesses around the globe. We are glad to have completed proofs-of-concepts around digital bills of ladings, as part of the GSBN Trade Finance Advisory Group. We are deeply supportive of industry efforts to digitalise the cross-border trade ecosystem.”

Ajay Sharma, Regional Head of Global Trade and Receivables Finance for Asia Pacific at HSBC, said, “The need to further digitise trade has been made abundantly clear by the pandemic. By stripping out inefficiencies and removing friction, we can increase the volume and velocity of trade, decrease time to cash, and deliver other benefits that will improve the overall customer experience. HSBC is pleased to work hand-in-hand with GSBN and other partners to advance trade digitisation.”

Following the proofs-of-concepts, the Trade Finance Advisory Group will explore opportunities to conduct live customer pilots to validate the new protocols.