Awards for Excellence 2020
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HSBC retains its title as the Middle East’s best bank for transaction services for the second year running by stepping up to the challenge of helping customers trade and transact at a time of closed borders and supply-chain disruption.
As countries reacted to Covid-19 by shutting borders and implementing curfews and lockdowns, concerns grew about the movement of supplies around the world, especially for urgently needed essential goods. As well as processing a huge increase in transactions, with all of its 400-strong team working from home, HSBC prioritized the movement of essential goods.
“Over the last six to eight weeks, we have seen a tremendous increase in volumes around medical equipment, pharmaceuticals and food trade, which has increased by almost 30% to 40%,” says Sunil Veetil, head of global trade and receivables finance, Middle East, North Africa and Turkey.
“Availability of funding and making these critical goods available to the public as fast as possible were very important, so we made sure these transactions were processed in half the time,” he says. Now, 75% of healthcare transactions and 83% of food sector transactions are processed in 24 hours.
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Sunil Veetil |
HSBC saw an increase in trade as an immediate response to Covid-19 as customers rerouted their business through the bank. It was a similar experience in the oil and gas sector. In the space of a few weeks, HSBC also onboarded or was finalizing the onboarding of 615 customers onto its online corporate banking platform, HSBCnet, to ensure they could continue making critical payments.
The shift to digital channels has been swift during the crisis, with 80% of transactions now taking place on these platforms.
Pre-Covid, the bank was already making progress in streamlining its trade finance operations. It pioneered the use of blockchain technology in the region, cutting document-exchange time from a typical five to 10 days to as little as four hours.
It also executed the region’s first-ever dual-platform blockchain cross-border letter of credit transaction with Landmark Group. The transaction integrated two complementary platforms – the financial and the physical supply chain. The outcome of this was that Landmark was able to make its supply chain 30% to 40% more efficient.
“We’re now looking to commercialize this solution,” says Veetil. “Covid-19 has underlined the importance of digitizing trade and has catalyzed the growth of non-physical goods trade and the shortening of supply chains. Blockchain will be a key part of the future of trade, and we are glad to be leading the agenda.”
HSBC’s Middle East transaction banking revenue went up 6% in 2019. The bank processed $56 billion of trade, a 33% year-on-year increase, and processed $512 billion of payments, a 20% year-on-year increase.
