Two major world financial centers have joined together to promote financial technology (fintech) growth and innovation. The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) signed a cooperation agreement on fintech this week in Hong Kong.
The first initiative is a project based on distributed ledger technology (DLT) to help facilitate trade finance cross-border infrastructure. Additional details are expected to be announced in November, said separate releases from the monetary authorities.
Additionally, the agreement will include other fintech projects, referrals of innovative businesses, information sharing and the exchange of expertise. “Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets,” said HKMA Chief Executive Norman Chan.
HKMA partnered with banks HSBC and Standard Chartered to test DLT late last year. Using DLT or blockchain can help move trade finance along with faster and safer methods. “Letters of credit are one of the most widely used ways of reducing risk between importers and exporters, helping guarantee more than $2 trillion worth of transactions, but the process creates a long paper trail and is time-consuming,” said a Reuters article. This is where DLT and blockchain can step in to facilitate a transition toward a better trade finance experience.
Meanwhile, Intuit, the company behind TurboTax and QuickBooks, is building a better payment experience for small businesses. “QuickBooks now offers one-touch electronic invoicing, a seamless Gmail integration for the one billion who have Gmail accounts and a next-generation mobile card payments reader,” said a company release.
Roughly two-thirds of small businesses have invoices that go unpaid for more than two months. The reason behind this is the medium of the invoice—“outdated, manual methods.” Customers will now be able to create invoices electronically and “click a simple link to pay electronically, enabling the invoices to be paid two times faster.” The speed of payments is very important to small firms that are trying to stay in business. “Money is like oxygen for small businesses, but every day they struggle to get paid on time,” said Intuit Vice President of Payments Jimena Almendares in the release.
– Michael Miller, editorial associate