HSBC Deploys AI to Enhance Trade Finance Operations

HSBC has launched Smart Checking, an AI-powered solution aimed at streamlining trade finance operations. The tool is designed to "transform and standardize" the processing, tracing, and review of trade finance documentation at the bank, according to a news release from HSBC.

HSBC's trade finance operations involve a complex process, with over a million documentary presentations processed annually, including documentary credits and collections. Each presentation can span hundreds of pages, containing a wide range of structured and unstructured data points that need to be extracted for further review.

The complexity is further heightened by the unique conditions, such as commercial contract clauses, that accompany documentary credit checks. This variability can lead to lengthy processing times, especially during peak activity periods.

Smart Checking addresses these challenges by combining AI technologies with trade expertise. AI extracts and classifies information from documents, converting complex and inconsistent data into structured formats that are easily searchable. This enables a more efficient processing of trade finance documents. For clients, the faster document processing facilitated by Smart Checking can accelerate payment times, provide greater certainty, and enable businesses to access liquidity and working capital more quickly.

According to Thomas Elliott, HSBC's chief operating officer for global trade solutions, "Smart Checking is an ideal combination of AI and human expertise. AI handles the scale and complexity of documentary trade, while human judgment is essential to understanding exceptions and making the decisions that matter." The technology was co-developed with HSBC's trade experts to ensure it meets the needs of the industry while boosting efficiency and innovation.

As of now, Smart Checking is operational in the United Kingdom, Hong Kong, and the United Arab Emirates, with plans for a global rollout. The deployment of AI in trade finance is seen as a way to reduce the latency between economic activity and financial actions, which can have significant implications for businesses. Faster processing can lower days sales outstanding, enable buyers to approve invoices earlier for potential discounts, and improve cash forecasting.