HSBC is rolling out a “fast-track” digital trade finance demand guarantee that it says can be issued to a beneficiary in near real time.

The guarantee is being made available via HSBC Trade Solutions, a digital trade finance platform developed in partnership with Canadian tech consultancy CGI that enables clients to originate and manage all their trade finance products online. Launched in 2022 in the UK and Hong Kong, the platform is currently live in nine markets, and HSBC says it will be deployed globally in 2024 and 2025.

Speaking to GTR, Jonathan Moore, chief operating officer of HSBC’s global trade and receivables finance business, says: “There’s a lot of guarantee issuance out there with standard wording – some driven by the issuer and some by the beneficiary. What we’re doing now is identifying all those groupings where there’s a high volume of standard wording, to enable the customer to access the templates via our digital channel. We then create that fully straight-through journey with the technology that we’ve built as part of HSBC Trade Solutions.”

“We’ve redesigned and simplified the user interface, which enables us to prepopulate a lot of the data into the guarantee. This then enables us to automate the validation checks all the way through to notification,” he adds. “Wherever there’s bespoke wording, a degree of human intervention may be required – however the more we can standardise, build those templates and agree those templates with customers to provide them access, the more they then have control.”

The new product has already had its first outings, with two transactions taking place this month. One was a tender bond for consultancy and accounting firm KPMG in Qatar. The other was an advance payment guarantee for UK filtration manufacturer Russell Finex, which enabled what the company calls “a key contract” to provide sieving and filtration technology for chemical processing.

“Given no manufacturing can start until the guarantee is in place, this enhancement supports working capital optimisation and presents growth opportunities based on the timely finalisation of all contractual obligations,” Russell Finex says in a statement.

“The feedback from our clients was that this improved the speed at which they can respond to their buyers and suppliers,” says HSBC’s Moore. “The fact that something that can take three to four days was done in a matter of minutes means that they can then move on to the next part of the bigger commercial deal. It gives them not just speed, but certainty and control.”

The digital guarantee is the latest in a series of moves by HSBC as it seeks to speed up the digitisation of trade.

Earlier this year, the bank launched HSBC TradePay, a document-free trade finance solution, with a payment processing speed of under a minute. It also recently extended its mobile trade transaction tracker service to financial institutions.

Explaining the bank’s approach, Moore says: “We start by looking at the customer journey, step by step, and then with a full suite of leading-edge technology, we look at what the best solution is for each step in the journey.”

HSBC is not alone in bringing to market digital solutions aimed at solving specific, practical needs. Earlier this year, Bank of America unveiled a new service, Open Account Automation, that aims to speed up invoice approval and payment for suppliers, while Citi has announced a new digital assets offering that includes tokenised guarantees.

This more targeted and unilateral approach to digital innovation by banks marks a departure from previous industry efforts that sought – and failed – to bring together numerous players to effect market-wide transformation. In October, one such large-scale initiative, the Contour blockchain network, became the latest to close its doors after being unable to raise further funds from its bank shareholders.

Speaking to GTR at the time, Carl Wegner, Contour’s CEO, called out this growing trend as a potential threat to progress on digitisation. “Building things by yourself is not going to work. It has never worked before. The industry needs collaborative projects, particularly at a time when trade is becoming increasingly fragmented,” he said.

HSBC’s digital demand guarantee is now live in nine markets, and the bank says it will be extended to a further 19 next year.