HSBC Bank Block Chain Executives: In 2020, we will see the wave of commercialization of blockchain

In the past 1-2 years, banks and financial services institutions have experimented with a large number of blockchain applications. Although many of these applications have been successful, most have not yet been commercialized.


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This is also the challenge that HSBC plans to address in 2020.

Joshua Kroeker, head of the HSBC Global Commercial Banking Growth and Innovation Blockchain, told Tech Wire Asia:

“A few years ago, I might say that distinguishing the blockchain from the concept of cryptocurrency and tokens in the minds of people is the biggest challenge we face. However, in the past few years, customers in the financial services industry, In particular, HSBC's customers have made a big leap in understanding the blockchain as a 'network technology' and how it affects their business."

In the past two years, HSBC has pioneered the use of blockchain technology in the banking and financial services industries through various successful projects and experiments, thus establishing a good reputation for the pioneering application of blockchain.

For example, the team completed the world's first end-to-end paperless iron ore trade in Singapore, from signings to payments to file transfers, demonstrating the powerful impact of the digital world.

HSBC also signed the world's first renminbi-denominated blockchain letter of credit with Hong Kong-based MTC Electronics, demonstrating the international appeal of the blockchain.

“The success of Singapore's paperless iron ore trade highlights the benefits of connecting end-to-end digitization across platforms. On the other hand, it has completed the world's first RMB-denominated blockchain letter of credit with MTC, showing the blockchain. International attraction."

Although HSBC has reason to be proud of its success in this technology, HSBC faces the main challenge of “promoting more traditional financial institutions to adopt this technology” as the first wave of technology is about to go into commercial use.

“The blockchain is a network technology. It relies on cooperation between companies and building a common network. We know that this technology works well and I very much hope to see it moving from industry testing and learning to business next year. The transformation of the stage."

Therefore, to successfully commercialize the blockchain by 2020, Kroeker and his colleagues at HSBC need to encourage traditional financial institutions and ecosystem participants such as ports, customs and insurance companies to adopt the technology and build an interconnected platform.

“We have extensive blockchain experience and believe that blockchain is an opportunity. The solutions we offer are open, connect to other platforms/service providers, and ultimately act as hyperconnectors.”

What is the commercialization of the blockchain?

“In 2018 and 2019, we saw leading banks joining the project and working together to build a reliable platform. By 2020, the first wave of blockchain networks will introduce commercial solutions to the market. Customers will need to decide which platforms are the best. Solve their specific problems."

In practice, when customers begin to consider adopting and implementing blockchains, they realize that not only banks are testing blockchain solutions, but many industries are building their own platforms to solve common challenges.

With the launch of cross-industry platforms other than the banking industry, HSBC is expected to promote the interconnection of these platforms.

“As a pioneer in this field, we have gained a lot of first-hand expertise in what works and what doesn’t. As the first wave of projects matures, we are using these lessons to work with other industries. Develop new use cases outside the industry and outside the bank to help partners and customers skip the trial and error process."

Ultimately, what HSBC really wants is to be able to offer commercial products for projects it develops with its alliance partners to ensure that customers benefit as quickly as possible.

To be fair, HSBC has its own advantages in the market because it has been daring to try this technology for several years, and its initiatives are bolder every day.

For example, HSBC recently announced that it is launching another trial with the Singapore Exchange (SGX) and Temasek to explore the application of blockchain in the issuance and service of fixed income securities, the first to focus on Asian bonds. The end-to-end digitalization of the market.

As a result, the banking giant's blockchain team has worked closely with multiple customers to support their blockchain journey.

“We found that our participation in our trade finance platform has increased significantly. The transaction volume of the L/C blockchain platform we supported has increased four-fold year-on-year, and the number of people participating in our platform has also increased eightfold. Although the company is not yet ready for commercial promotion, these successful transactions prove that the technology is effective for customers. This leads to a significantly higher demand for participating transactions than it was 6 to 12 months ago."

As it enters 2020, Kroeker and his team at HSBC believe that the commercialization of the blockchain will be at your fingertips, not only for the banking and financial services industry, but also for a broader, smarter ecosystem. The same is true of other industries that are part of the system.

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