HSBC Holdings has completed the first finance transaction completed fully through a single blockchain platform, according to reports.
The transaction involved a shipment of soybeans from Argentina to Malaysia and was conducted with leading Netherlands-based bank ING for conglomerate Cargill, which is one of the largest privately held companies in the world.
“A letter of credit, guaranteeing that the seller would be paid when the shipment arrived, was agreed and completed in 24 hours,” said HSBC in a statement. “A typical paper-based transaction would take 5-10 days.”
The transaction was historic, according to a report by Reuters, for the fact that it was the “first use of a single, shared digital application rather than multiple systems” compared to other trade finance deals that have used “blockchain in conjunction with other technologies.
According to HSBC, the blockchain platform involved, which it called “essentially a form of shared digital database,” was developed “with the backing of a consortium of 12 banks, including HSBC.”
The deal was carried out on a blockchain platform – essentially a form of shared digital database – developed with the backing of a consortium of 12 banks, including HSBC. While previous prototypes have shown that blockchain technology has the potential to reduce the time-consuming paperwork associated with traditional trade finance, this is the first time it has been applied to a real commercial deal.
The move is one of many that HSBC, which invested some $2.3 billion USD in digital transformation over the past three years, has been making of late to adopt new innovations and industry trends.
Its app has been updated to allow clients to log into their accounts through face recognition that uses a 30,000-point map of a user’s face that the company says is fully secure.
The feature is now available in 24 markets across the world for users with newer smartphones capable of deploying the technology. It will be rolled out further in other areas later this year, said HSBC.
“We are pioneering this technology within the financial services sector for businesses and corporates,” said Niall Cameron, global head of corporate and institutional digital for HSBC. “Our unparalleled global digital footprint allows us to deploy new technology like this quickly and at scale to make a real difference to our customers.”
Photo credit: Hakan Dahlström Photography