Global Shipping Business Network (GSBN), an independent, not-for-profit technology consortium to build a blockchain-enabled operating system to redefine global trade, has welcomed the Bank of China (BOC), DBS Bank (DBS) and The Hong Kong and Shanghai Banking Corporation (HSBC),to form the consortium’s Trade Finance Advisory Group.

According to the International Chamber of Commerce (ICC), there is an estimated trade finance gap of USD 1.5 trillion projected to grow to USD 2.5 trillion by 2025. The mandate of the Trade Finance Advisory Group is to help bridge this financing gap by helping partner institutions improve their existing processes, by leveraging trusted digital data from supply chains. In turn, this will help enhance financing support for small and medium enterprise, many of which have been deeply impacted by the COVID-19 crisis.

The announcement builds upon the recent growth of GSBN, following the rollout of its Cargo Release application across Asia and partnerships with 8 major port groups in China.

Bertrand Chen, CEO at GSBN said: “The COVID-19 pandemic has demonstrated many areas where paper can be eliminated in favour for more efficient, trusted digital systems. Given the symbiotic relationship between the shipping sector and finance, we must explore how we can connect with, and enhance banking processes to bridge the $1.5 trillion trade finance gap. Breaking siloes between supply chains and trade finance is critical part to unlocking new value in global trade, which is why we’re delighted to have three financial leaders join our mission.”

The advisory group will explore the technical, legal, and regulatory frameworks needed to break the siloes between the global supply chain and financial institutions. Furthermore, the group will also work together to test digital solutions such as electronic Bill of Lading and other supply chain data to improve the financing process for banks.

James Ho, deputy general manager of transaction banking department from Bank of China (Hong Kong) (BOCHK), said: “BOCHK is pleased to deepen our collaboration with GSBN by becoming a key member of the Trade Finance Advisory Group. We have been actively supporting the cooperation between the finance and the shipping industries to facilitate trade and create value for all stakeholders in the supply chain. Early this year, we became the first financial institution to partner with GSBN to accelerate digital transformation of the shipping industry.”

Sriram Muthu Krishnan, managing director & group head of product management from DBS Bank, said: “SMEs face multiple challenges on the road to economic recovery after the pandemic. On one hand, they have the challenge of growing revenues while on the other, they continue to be hampered by cumbersome, paper-based processes that create friction when accessing trade finance. Data and digitalisation can help businesses to be more efficient, while providing greater comfort to financiers.”