HSBC Malaysia Bank Sends First LC Transaction Using Blockchain; Cutting Processing Time By 90%
HSBC has enacted the countries’ first blockchain transaction with the execution of credit deal letters involved in the importation of resins from Singapore. It marks an excellent step for the Malaysian companies in the digitalization of trade.
The Undertakings Involved
A Malaysian company, Simply Packaging Sdn Bhd, got into a transaction with a company in Singapore, both companies are active players in packaging and chemical industries, respectively. The operation involved the importation of resins where HSBC Malaysia was the issuing bank, and HSBC Singapore was the advising bank. It is a significant step that would make business transactions easier and promote the efficiency of working capital.
Transfer of physical goods across neighboring countries usually takes around 48 hours, due to the delayed paperwork. The entire document checking and product transfer activities typically take about ten days. The Simply packaging transaction was, however, completed within 24 hours.
Benefits the Company Enjoyed by Using Blockchain
The use of Blockchain made the transaction faster in the cross- border trade between Malaysia and Singapore. The blockchain technology has digitalized the entire process through e-presentation of crucial documents that have enabled the transfer of title completion while the goods are still in transit. It has also eliminated numerous paperwork and updates.
The technology has integrated Bolero’s electronic bill of lading (eBL) platform to issue and manage an eBL. It has promoted transaction visibility, creating trust in both parties during the entire transaction. It is the first step to digital advancement that results to just- in –time inventory management removal of delayed shipment fines and reduced processing times.
According to HSBC, this transaction demonstrates how Blockchain can be applied in most deals, regardless of the size of the organization. It is also an indication of how technology is gaining popularity in markets across various regions.