eTradeConnect

WELCOME TO THE FUTURE OF TRADE

1

Insufficient financing

implies great

opportunity for

trade finance

and trade opportunities

Only

50%of trade in HK was

financed between

2006 - 2015

PROBLEM STATEMENT

2

VISION

To create an open and not-for-profit platform initiated by 7 major

HK banks

•Create a marketplace connecting cross-industry and cross-border trade

•Connect trade finance stakeholders

•Facilitate verification of trade documents and real-time updates

•Enhance transparency of loan information for fraud detection

•Reduce risks of fraud and increase trade finance participation

•Allow banks to introduce non-conventional trade finance products to

capture new market opportunities

FEATURES AND SERVICES

3

1Q.

Proof of concept (PoC) conducted using DLT

7 Banks decided to commercialise the PoC

2017

2Q.

1Q.

Vendor selection

Platform development

2018

2Q.

Pilot launch

3Q.

7 INITIATING

BANKSTIMELINE

4

STAGE ONE

FUNCTIONS

Reconciliation of

trade agreements through matching of invoices to purchase orders

RECONCILIATION

Submitting trade

finance request to bank using the information shared by trading parties, logistic

providers and participating banks

FINANCING

Creation of open trade

agreements between buyers and sellers (KYU performed by banks) and share information on the

platform

AGREEMENT CREATION

5

•Identity validation•Digitalised trade flow•Reduced cost of conducting business

•Easier financing with higher trust

level•Automatic reconciliation

BUYERS & SELLERS

•Standardised data for common

reporting

REGULATORS

LOGISTICS SERVICE PROVIDER

BENEFITS TO

DIFFERENT

STAKEHOLDERS

•Digitised process of documenting

trade•Monitored shipment status and locations

•Shortened turnaround time for

approval processes

BANKS•Reduced operating cost•Detect fraud with trading documents transparency

•Increase trust to finance SMEs based on trusted sources of

data

6

ECOSYSTEM

AND

POSSIBLE PATH

APP STORE

Open ApplicationProgramme Interface

OPERATINGSYSTEM

MOBILEDEVICE

Duplicate Financing Check

Open Account Trade

Financing

OTHER FUNCTIONS

•Supply Chain Financing

•Letter of Credit•Credit Scoring

eTradeConnect Core Services

DLT Layer

Hardware

01

02

03

04

7

P2PPlatform

BanksBuyers

InsuranceCompanies

Shipping & Logistics

Sellers

Open AccountFinancing

KYC

(Know Your Customer)

eTradeConnectMARKET PLACE

Tradable

Trade

Finance

Assets

Yellow

Page

Supply

Chain

Financing

Credit Worthiness & Scoring

Global Trade

Connectivity

Network

(GTCN)

Letter of

CreditOtherJurisdictions

8

Thank you

https://ffo.hkma.gov.hk/