Bank Tech: IBM and HSBC develop a cognitive and intelligence global trading system
IBM and HSBC are developing a new platform to digitise global trade and add more intelligence and cognitive abilities to these transactions.
The idea is to help merchant banks tackle semi-structured data by automating and simplifying the processing of millions of documents used daily in international commerce.
To that end, the new IBM-HSBC tech is already improving the service it offers customers by speeding up transaction processing, as well as improving accuracy and mitigating risk in Hong Kong and the United Arab Emirates (UAE).
But what exactly does the new cognitive intelligence system do?
Well it apparently combines optical character recognition (OCR) with advanced robotics. HSBC is currently using the technology to analyse English-language import and export bills in several markets in Asia, Europe and the Americas.
It intends to deploy the solution in a further ten markets by the end of the year, and the system will be enhanced so it can read a wider range of documents and languages including Chinese, French and Spanish.
HSBC says this new technology is needed as its Global Trade and Receivables Finance (GTRF) team facilitates over $500 billion (£385bn) of documentary trade for customers every year.
Until now, this has entailed a manual review and processing of up to 100 million pages of documents, ranging from invoices to packing lists and insurance certificates.
The platform uses IBM’s analytics technology, including intelligent segmentation and text analytics, to identify, digitise and extract key data within these documents before feeding it into the bank’s transaction processing systems.
This, HSBC claims, bolsters accuracy whilst freeing up staff for more value-adding activities.
“The average trade transaction requires 65 data fields to be extracted from 15 different documents, with 40 pages to be reviewed,” said Natalie Blyth, HSBC’s Global Head of GTRF.
“By digitising this process we will make transactions quicker and safer for both buyers and suppliers, leading our industry forwards, and we will reduce compliance risks through an enhanced ability to manage huge volumes of data.
“We are continuously investing in technologies that will improve the way we work for the benefit of our customers and our people. HSBC wants to be the leading bank for innovation, and initiatives like this one are key to achieving our goal.”
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Banks of course have to deal with huge amounts of data, both unstructured and structured. Both sometimes this data is somewhere in the middle of this, according to IBM.
“The problem is how to capture semi-structured documents with highly variant content through an analogue process, and no-one has the perfect answer,” said Roger Welch, Industry (Financial) Expert and Solution Architect for IBM Analytics ECM practice. “In our experience, no trade finance solution has come as far or done as much as this new solution.”
IBM of course is already a known player in the banking tech sector.
In June seven major European banks said they would build a Digital Trade Chain platform on IBM Blockchain, which will be powered by Hyperledger Fabric v1.0.0.
And last month Borsa Italiana, a member of the London Stock Exchange Group (LSEG), teamed up with IBM to build a Blockchain platform to help European SMEs digitise and manage shareholder data.
That tool will be designed to issue digital securities for SMEs and simplify the tracking of shareholding information through a distributed shared registry containing a record of all shareholder data.