On the list of favoured outsourcing destinations, Hong Kong’s name rarely appears. But Hong Kong is the location of choice for the fast-growing trade finance outsourcing business. Why?
“The skills are here and it’s a business that demands top quality skills,” says a senior banker in Hong Kong. “Trade finance is a difficult business to hub because you have to look at the documents and the operational risk. It’s not like credit cards where you just tick a box.”
Standard Chartered is one bank that is doing well in this area. A year and half ago it had 15 bank clients for its private labelling/agency products business. Since then a further 18 banks have joined up.
Standard Chartered does have outsourcing operations in more likely outsourcing destinations, such as Kuala Lumpur and Chennai. But it controls its trade finance operation through Hong Kong.
“A large European bank started with us by opening letters of credit on a private label basis and is now progressing with us to deliver an integrated supply chain and financial services solution,” says Alex Thursby, global head of wholesale client relationships at Standard Chartered.
