Global Trade and the Evolution of Digitization
During this year’s eighth annual Asian Logistics and Maritime Conference in Hong Kong, one of the most common themes discussed was the impact, success to-date and history involved in the world of digitization for the supply chain sector.
Mr. Wilson Pang, Fintech Senior Manager, spoke on the topic during the second Supply-chain Management and Logistics Forum on day 2 of the conference, emphasizing the importance of improved research methods and application for the industry. Key highlights from his presentation included a thorough SWOT analysis of the Hong Kong trade sector and what possibilities can be utilized for maximized success and elimination of inefficiencies.
Strengths included the obvious leading role the Hong Kong market plays in the global trading arena and the fact that it accounts for 3 percent of the world’s total trade. Weaknesses were identified as lack of financing for less than 50 percent of total trade between 2006-2015. The Belt and Road initiative provided the strongest opportunity for the market, with an emphasis on expanding trade in an effort to support and promote economic cooperation and peace.
Here comes the game-changer: the threat. From all of the perspectives addressed thus far, threat prospects can range from a variety of factors. Nonetheless, Pang identified the high transaction cost spurred from documents and manual processes combined with very likely risk of data errors and duplication.
Digitization in the form of e-trade connect is a solution Pang presented. He also shared a very interesting illustration proving the evolution of digitization through the story of Russian world class chess champion Garry Kasparov and his defeat by an IBM supercomputer. Factoring in the elimination of human error and outsmarting the human mind through digital solutions, the risk of duplication and errors are resolved.
Pang took it one step further and broke down the process into three priority functions: agreement creation, financing and reconciliation. Through this process, trade and trade finance is simplified while benefiting all players in the trade sector. This is how industry leaders can unleash the full potential of business.
Source: Presentation, “eTrade Connect: Welcome to the Future of Trade” by Mr. Wilson Peng, Senior Manager, Fintech Facilitation Office
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