HSBC extends open banking concept to trade finance with launch of first API

New bank Guarantee API enables partner financial institutions to seamlessly offer HSBC’s network as an extension of their own –

In an industry-first, HSBC today launched a new trade finance API that gives Financial Institutions (FIs) the ability to build applications for their clients, leveraging HSBCs network and capabilities. For example, FI clients will be able to give clients full visibility of their Guarantees on their own platform even when they are delivered by HSBC to the beneficiary.

An API – or Application Programming Interface – enables systems to interact seamlessly and securely to exchange data and allow developers to plug-in new products and applications. HSBC is currently building multiple APIs that will provide unprecedented access and transparency to clients.

Surath Sengupta, Global Head of Financial Institutions, Portfolio Management and Distribution, GTRF at HSBC said: “APIs are fundamental to the digitisation of trade finance. Through the introduction of APIs we are improving the customer experience in cross-border trade by providing clients with access to the products and services they need from their platform of choice.

“HSBC handles half a million Bank Guarantees a year. The Bank Guarantee API is the first of several API we’re developing. We’re looking forward to working with our network partners to realise the full benefits of open banking and improve the customer experience.”

A Bank Guarantee assures a supplier that if the buyer doesn’t pay what it owes, the FI will step in on their behalf to make the payment. If a partner bank doesn’t have a presence in the supplier’s country and HSBC does, they can ask HSBC to reissue their Guarantee to the supplier.

The development of Trade Finance APIs is a key component of HSBC’s wider API strategy. In the coming months the Bank Guarantee API and further Trade Finance APIs will be added to the HSBC Developer Portal, which provides access to HSBC’s Live and Sandbox APIs.

ING Bank and Standard Bank are already working with HSBC to integrate the Bank Guarantee API into their banking platforms.

Mark Buitenhek, Global Head of Transaction Services at ING said: “Trade is an important domain for ING to innovate and create new enhanced experiences for our corporate clients. This pioneering API connection with HSBC fits perfectly in our ambitious open banking strategy, to be a bank of the future based on openness, co-petition and co-creation. More APIs will enable new open business models that we work on at ING.”

Kevin Holmes, Head of Trade Product management, Standard Bank Group said: “Standard Bank is partnering with HSBC in developing an API designed to provide digital status updates throughout the Guarantee life cycle. We are very pleased to be working with our strategic banking partner, further evidencing Standard Bank’s commitment to our digital client journey in trade finance.”