Loans

HSBC, Alibaba Link Up On Quick eCommerce Loans

Banking giant HSBC and Cainiao Network Technology, which is a logistics arm of Alibaba Group, have announced they will offer rapid finance approvals to online merchants that use Chinese shopping site Tmall, according to reports.

The South China Morning Post reported that the firms will offer seven-day approvals for loans up to $500,000, and 1,800 Hong Kong Tmall merchants will be eligible. The interest rate will be 1 percent until June 30.

There won’t be any need for documents or collateral to get the loans, the paper said. However, the applicants will have to allow Cainiao to provide things like inventory information and operational status to HSBC for analysis.

“We see big data and other emerging technologies as a huge opportunity to offer innovative solutions that make financing easier for our customers,” HSBC’s Jeanny Ip, head of global trade and receivables finance in Macau and Hong Kong, told the Post.

The paper said that HSBC hasn’t ever used third-party data to approve trade financing. But analysts said the move represents an attempt to compete with a number of new online challenger banks that will appear in the region later in the year.

“Through this digital financing solution, more merchants can easily obtain rapid loans,” Zhao Wei, general manager of Cainiao Network Supply Chain Finance, told the news outlet. “As merchants go through a challenging period due to the COVID-19 outbreak, Cainiao Network is dedicated to driving the recovery of retail businesses and assisting businesses to resume normal operations by using our expertise in smart supply chain.”

“HSBC is the first local lender to launch such a partnership with a technology company, to use big data to approve trade finance lending. It will have first-mover advantage,” said Louis Tse Ming-kwong, managing director of VC Asset Management. “Eight virtual banks are starting operations this year. The competition will be keen. HSBC and other traditional lenders will need to offer more digital banking products and services to compete for a tech-savvy, younger generation of customers.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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