SABIC Wins Prestigious Award For ‘Best Fintech Solution’ For Fully Digitized Trade Transaction
- The ‘Best Fintech Solution’ by Adam Smith Awards Asia reinforces SABIC’s corporate digitization efforts in trade finance as well as supply chain excellence
- Together with HSBC as banking partner, the solution enables smoother cross-border trade in the region, accelerates speed of processing by 60% and potentially saves customers costs
SABIC Asia Pacific Pte Ltd (SABIC) has been awarded Asia Pacific’s Best Fintech Solution by the Adam Smith Awards Asia 2020, with Hong Kong and Shanghai Banking Corporation (HSBC) named as its banking partner. The award was given in recognition of the completion of a fully digitized letter of credit trade transaction relating to the sale of resin by SABIC in Singapore to Simply Packaging - a buyer in Malaysia in October last year. This pilot transaction, supported by HSBC, is the first trade blockchain transaction in Malaysia.
SABIC processes large amounts of short-haul trades between Singapore and Malaysia. Our transhipment hub in both countries is geographically well positioned with capabilities to manage more than 1 million metric tons in the region every year. While the delivery of physical goods typically takes under 48 hours, processing of traditional paperwork documentation requires about five to ten days, resulting in businesses potentially incurring demurrage, a charge imposed on cargo left at a terminal beyond the allotted time.
SABIC and HSBC utilized a shared platform to manage the fully digitized cross-border transaction with Simply Packaging. This new technology capitalizes on a single global network for trade finance powered by blockchain technology, resulting in improved operational efficiencies for both the customer and SABIC by reducing manual processes by as much as 60%. With the ability to complete document processing electronically within 24 hours, customers are provided with increased speed to market, as well as potential time, cost and manpower efficiencies which can be channeled towards other higher-value work.
The digitalization effort is part of SABIC’s continued push to enrich its customer experience by embracing emerging technologies. In Asia Pacific, this includes enhancing our e-commerce platform, enabling automatic and timely delivery of information and improving our customer service and internal efficiencies.
Janardhanan Ramanujalu, Vice President & Regional Head for South Asia, Australia and New Zealand, noted that the ongoing pandemic has brought to the fore the role of digitalization and technology within various sectors, including the chemical industry. SABIC’s advanced digital and technological infrastructure has enabled the company to adapt nimbly to ensure business and operational continuity with limited interruptions, he added.
He said: “This ground-breaking solution, in collaboration with HSBC and Simply Packaging, marks an important milestone in our continuous drive to improve efficiencies within our financial operations and supply chain. We harness customer-focused innovation like blockchain technology to digitize and optimize transaction processes. This allows us to respond swiftly and effectively to supply chain network challenges and seize emerging opportunities. We look forward to expanding this solution to more customers across Asia Pacific next year.”
Iain Morrison, Head of Global Trade and Receivables Finance, HSBC said: “We are delighted to have supported SABIC in being recognized for utilizing such a cutting-edge solution. Trade between closely located markets is regularly hampered by the laggard of paperwork, which follows behind physical delivery of goods. The result for businesses is high storage costs and product delays. This transaction marked a step change in reducing the administrative hurdle. Solutions like this could also help boost the efficiency of intra-ASEAN trade, characterized by many close-proximity shipping routes and strong trading relationships, which in turn helps trade to grow and flourish throughout the region.”
The transaction leveraged blockchain technology that allows information to be distributed securely between parties. Key trade documents are shared electronically allowing administrators to review and approve them in real time, enabling:
- The transfer of title completion while goods are in transit
- Instantaneous updates and the elimination of paper reconciliation
- End-to-end visibility for all parties to help mitigate potential issue and delays before they occur
The technology will enable SABIC in Asia Pacific to significantly expedite the delivery process and reduce the cost of cross-border trade, paving the way for smoother trade flows between close-proximity markets.
The Adam Smith Awards Asia are recognized throughout the globe as a benchmark of corporate achievement. A full list of the 2020 awards can be found at the website: