Since 2021, HSBC has partnered with HKTVmall and Octopus to use commercial data to streamline the loan application and approval process for their merchants as part of the CDI pilot initiative. With the prior consent of merchants wanting to apply for a loan, HKTVMall and Octopus would provide the relevant commercial data for HSBC to facilitate credit assessment. This streamlined process removes the need for SME loan applicants to provide financial statements or collateral. In some cases, loans were approved within three working days.
After the CDI was officially launched in October 2022, HSBC has also developed an end-to-end solution to obtain credit records from a Commercial Credit Reference Agency (CCRA) through the CDI upon customers’ consent for business loan applications within HKD10 million. The process also enables automated loan decisioning and helps ensure data accuracy.
Having access to stores of data previously unavailable, banks can also gain a better picture of a company’s future cashflow and revenue patterns for better credit risk management. If a customer exceeds their own sales targets, their credit standing will improve through the updated data shared via the CDI.
“Through the use of alternative data, the CDI is helping to streamline the credit decision-making and monitoring process and enhance the customer experience,“ Jaff Lau, Head of Strategy and Innovation, Business Banking, Commercial Banking, Hong Kong, HSBC who also participated in a panel discussion at the Hong Kong FinTech Week 2022.