“To date, OneConnect has developed supply chain finance services targeting ten industries, with a focus on the automotive, agricultural and healthcare sectors,” Fei Yiming, CEO of OneConnect’s Enterprise Financial Service Division, said at the 7^th China SME Investment & Financing Expo and the China Supply Chain Finance Summit. OneConnect, a member company of Ping An Group, is a leading technology service platform spanning the entire financial industry chain. Ping An Group, the world’s largest insurance group in terms of market capitalization, is ranked 29^th on the Fortune Global 500 list.

Supply chain finance refers to financial services through which banks manage the capital flows and logistics of leading small and medium-sized enterprises (SMEs) in the upstream and downstream segments of some sectors and transform the uncontrollable risks of a single enterprise into controllable risks spread across multiple firms that inhabit every link in the supply chain, minimizing risks to the lowest level through access to a wide range of information. This is achieved by allowing the financial reviewer to have access to and be able to evaluate the performance and credibility of an firm applying for trade finance from multiple viewpoints.

Leveraging cutting-edge technologies including blockchain, artificial intelligence and cloud computing, OneConnect launched the Eachlink Intelligent Supply Chain Finance Platform in 2018, as a solution to overcome the drawbacks associated with traditional supply chain finance models, including difficulties in interpreting the company information that was collected based those models as well as in tracking the transaction information and in providing financing to SMEs. Taking advantage of blockchain’s traceability, records retention and immutability, a large amount of offline transaction information which was previously difficult to verify is furnished to the blockchain, ensuring that SMEs’ information on the supply chain can be recorded, traceable and creditworthy and guaranteeing the authenticity of the furnished information. Artificial intelligence is used to achieve intelligent cross-validation of data sources for logistics, warehousing, industry, trade, taxation and other participants on the blockchain, solving the bottleneck of information asymmetry between banks and companies and the difficulty of verifying the authenticity of a trade, greatly enhancing the banks’ ability to control risks, reduce risks associated with loans and audit costs. By combining mobile networks and cloud computing, we can build a mobile cloud platform, which can bring the entire process online including credit application, certification, contract signing, loan application and invoice verification, truly offering 24×7 services and online lending in seconds. It not only reduces the financing costs for SMEs, but also meets the demand for short-term, frequent and fast-moving financing.

Mr. Fei indicated that the characteristics that define a supply chain varies across different verticals and as a result, precision-driven supply chain finance solutions are required to address a host of existing pain points associated with differentiation.

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Taking the automotive industry as an example, a supply chain finance platform built with OneConnect helps automotive firms manage their funds appropriately and efficiently. Blockchain allows for full transparency on multiple levels of the credit status and worthiness of key businesses, ensuring the healthy and smooth operation of all sectors across the industry chain by enhancing the accessibility to the financing sought by firms in the chain, reducing financing costs and, generally speaking, removing all friction that could arise as a result of a lack of capital.

In the world of agriculture, rural financial services are more underdeveloped as the majority of the players involved are individual farmers who lack financial literacy and credit awareness. Consequently, OneConnect puts the control of capital flow and the trade in agricultural products in the hands of the major agricultural companies, in line with the business model of order-based agriculture and of having the individual farmers and the large agribusinesses working hand in hand, with the aim of ensuring the availability of needed credit facilities while reducing the associated risk.

As for trade financing, OneConnect, led by the Hong Kong Monetary Authority, helped build the world’s first blockchain trade financing platform supported by regulators in 2018. Serving as an “air corridor” for financial trade, the pioneering platform connects international trade hubs in the Guangdong-Hong Kong-Macao Greater Bay Area and builds a bridge that facilitates trade and the flow of capital across the Asia Pacific region and the wider world.

In April 2019, under the aegis of the General Administration of Customs, OneConnect, working with Tianjin Customs, introduced China’s first cross-border trade service network powered by blockchain technology. With the network, OneConnect aims to make multi-party information sharing a reality with blockchain, break the asymmetric information barrier and supply the government, financial institutions and foreign trade partners with a database of credible background information and credit histories of SMEs so that qualified firms can be provided with trade financing.

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SOURCE OneConnect