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BUSINESS

Fintech will find ways to resolve low efficiency and high cost of cross-border payments, says senior Chinese banker

09/09/2022 03:23 PM

LABUAN, Sept 9 (Bernama) -- The progress of financial technology (fintech) will enable banks to pursue new approaches to resolve the low efficiency and high cost of cross-border payments, said China Construction Bank (CCB) deputy principal officer Peng Xiaowei.

She said the increasing utilisation of digital blockchain around the world formalises the start of a new global initiative to facilitate new international trade and cross-border financial services.

“The long-lasting pain point of low efficiency and high cost in cross-border payments and the potential risks of geopolitical threats on international financial activities, (such as) the current Society for Worldwide Interbank Financial Telecommunication (SWIFT) system cannot meet the fast-changing market demand and has highlighted the need for new forms of payment.

“Fortunately, the progress of fintech allows banks to pursue new approaches to resolve these issues, with many of them, including CCB, utilising blockchain technology,” she said at the 24th Malaysian Finance Association International Conference 2022 at Dorsett Grand Hotel here today.

The CCB is committed to facilitating explorations of new financial service models, and fintech is one of CCB’s key focuses where it leverages on blockchain, big data, and artificial intelligence to empower product innovation, and risk management, she added.

“CCB’s more recent blockchain innovation products, BC Trade and EasyPay have provided new avenues for users to conduct faster and safer cross-border transactions.

“CCB BC Trade is an e-channel trade financing platform launched by CCB in 2019…it is one example of an alternative to SWIFT to utilise prebuilt blockchain networks in international trade financing,” Peng said. 

She said CCB BC Trade automates the long chain of the trade financing process, allowing smart transaction matchmaking, encrypted real-time trade information, and shipping documents transmission and assignment of creditor’s right.

“By combining the numerous processes involved in a single trade finance transaction and automating their executions through the use of smart contracts, CCB’s BC Trade eliminates the need for 3rd party intermediary for verification, thus heavily reducing transaction time and subsequently minimising the transaction costs,” she continued. 

Peng revealed that to date, the cumulative transaction volume has exceeded one trillion yuan.

“Cross-border payment is a high frequency area in international trade…traditional international remittance relies on SWIFT system exclusively and the high transaction cost and time-consuming process are the key obstacles to international traders,” she said.

Meanwhile, CCB EasyPay is an integration of fintech innovation with cross-border payment services, which realises B2B (Business to Business) point-to-point automatic settlement by using blockchain technology.

Peng said this payment tool shortens the cross-border clearing time from one to two days to a few seconds and resolves the problems derived from traditional cross-border clearing processes such as information transmission relying on a single network. 

EasyPay was launched in April 2020, and CCB Labuan was the first overseas CCB branch to roll it out. The cumulative transaction volume for EasyPay has exceeded 140 billion yuan.

--BERNAMA

 


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