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HSBC helps Fulbright streamline investors’ funding journey
A Hong Kong-based securities company, Fulbright, harnesses the power of HSBC’s APIs and Virtual Accounts to enable almost instant account funding for customers and to automate their reconciliation processes.
Background and Scope
Headquartered in Hong Kong Special Administrative Region (HKSAR), Fulbright is a securities company that provides a full range of financial services to customers. Fulbright offers local securities, global securities, local bonds and other funds, as well as facilitates cross-border market access through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, for its customers.
Fulbright’s customers are primarily retail investors who fund trading accounts through bank transfers or by setting up direct debit transfers. Due to the risks associated with third-party deposits and payments, funding of trading accounts from third-parties should not be accepted without sufficient controls. Fulbright was thus required to check funding sources, which often delayed the funding process, leading to a negative customer experience.
Because investors are required to provide evidence to ensure that invested funds going into trading accounts are not sourced from third parties, Fulbright needed a dedicated team to verify each receipt against the account holder of the fund originator, ID, and account holder of the investing account – all before funds are credited and made available for trading.
These internal checks were manually driven, so this impeded the investor’s trading cycle due to the many verification steps and lag time in-between funding the trading account. Fulbright must also ensure sufficient controls to mitigate the risks associated with third-party deposits and payments.
Investor experience being a key priority for the company, the management team partnered with HSBC to create a solution that would not only resonate with investors, but also adequately manage the risks associated with account funding verification.
Leveraging HSBC’s collection API, Fulbright was able to incorporate electronic Direct Debit Authorization (eDDA) and real-time fund transfers into their process. This solution allowed for a straight-through-process where the direct debit initiates transfer instructions directly from the verified bank account that is already linked to the customer’s investment account with Fulbright.
This seamless integration covers authorisation set-up, real-time verification and the initiation of direct debit, thereby removing the manual verification steps previously undertaken.
For those customers who choose not to be on eDDA, Fulbright requires investors to separately email or fax payment receipt confirmation so that Fulbright settlement team can reconcile. To automate the reconciliation and payment confirmation processes, the company leveraged another digital solution, HSBC’s Virtual Accounts with MT910 credit advice, containing enhanced data about the originator account names and numbers. Each investor is assigned a unique identifier as well as a virtual account number, where each time a transfer is made to the investment account, the company is able to easily identify the sender.
HSBC’s collection API, Virtual Account with enhanced Credit Advice, has transformed our internal processes and has helped us provide a seamless payment journey for our customers to fund their trading accounts instantly.|
- Investment accounts can now be funded from the same investor bank accounts verified by Fulbright by removing the need to check funding sources for every single transaction.
- Enriched data tagged to any electronic transfers is now made available to the finance team to streamline the reconciliation process and verification of incoming funds.
- Investors are now able to fund accounts faster, and at times, almost instantly.
- With time saved through automating these processes, Fulbright’s resources have shifted to focus on customer acquisitions, subsequently gaining over 200 new customers within the first six months of implementation.