HSBC has forged a partnership with Chinese logistics firm Cainiao to offer fast trade finance loans to online merchants using Alibaba's Tmall platform in Hong Kong.
HSBC will use third party data on customer background, real-time inventory and operational status passed on by Cainiao to approve the loans. Merchant applicants will not need to provide any collateral or financial documents to secure financing - a first for the Hong Kong bank.
The package, which will promise a week-long turnaround for trade finance loans of up to US$500,000, is expected to be available to 1800 qualified merchants plying their trade over Alibaba's Tmall site.
According a report in the Southy China Morning Post, the lender will explore expanding this service to other e-commerce platforms as well.
"We see big data and other emerging technologies as a huge opportunity to offer innovative solutions that make financing easier for our customers," Jeanny Ip, head of global trade and receivables finance, Hong Kong and Macau, HSBC, told the paper. The partnership with Cainiao could support new economy enterprises by using big data to simplify the approvals process, she added.
"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," says Louis Tse Ming-kwong, managing director of VC Asset Management. "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."