The relative decline of documentary trade and the growth of open account transactions are changing the information banks can use to assess and finance commercial activity. As businesses generate more commercial data through their own digital systems, banks can increasingly use that information to complement traditional trade documentation and support financing decisions.

Against this backdrop, HSBC recently launched TradeCash, a digital trade finance solution that enables eligible businesses to upload sales invoice data through HSBCnet and obtain receivables financing without submitting traditional documentary packages. According to the bank, funding can, subject to approval, be made available within minutes, helping businesses unlock working capital while reducing administrative effort.

For Baksi, however, TradeCash represents a visible application of that broader transformation. Drawing on HSBC’s long history in the business and its international trade network across about 50 markets, she emphasised that while the operating model is changing, the principles underpinning trade finance remain fundamentally the same. “The underlying principles remain the same. Earlier, everything was about comparing documents and looking at paper. Now we feel there is enough data in the system which we can use.”

She also described Singapore, where HSBC has operated for almost 150 years, as an important regional trading hub and a growing node in the artificial intelligence (AI)-related technology supply chain. Singapore is also HSBC's primary offshore booking centre for its wholesale business and its ASEAN wealth hub, placing it at the centre of the region's cross-border capital and investment flows, working-capital financing and digital financial ecosystems.

From documentary trade to open account

Baksi remarked that the evolution of trade finance had begun well before the recent expansion of AI. As international commerce increasingly shifts from traditional trade instruments such as letters of credit towards open account trading, banks are gaining access to sources of commercial information beyond traditional trade documentation.

Commercial data generated through enterprise resource planning systems, procurement platforms, invoicing applications and other digital business systems could increasingly be used to understand and validate the underlying commercial transactions.

In Baksi’s view, this changes how trade finance could be delivered. Banks could increasingly use trusted commercial information while preserving the principles of credit assessment and risk management that have long governed the business.

She identified three related but distinct priorities for HSBC: automating traditional trade, developing structured working capital solutions for increasingly complex supply chains and embedding finance into customers’ business processes. Together, she said, these reflect how trade finance is evolving as global commerce becomes more fragmented, digital and data-driven.

Automating traditional trade

Baksi said trade finance remains one of banking’s most document-intensive activities despite the growing availability of commercial information generated by customers’ own systems.

She said banks should make better use of this data without changing the underlying principles of trade finance or weakening risk management. The objective is not to replace prudent credit assessment, but to remove manual processes that no longer add sufficient value.

According to Baksi, this transformation has been enabled by HSBC’s broader re-platforming of its trade finance infrastructure. She described the underlying architecture as modular and designed to support greater automation and straight-through processing, enabling the bank to develop solutions such as TradeCash.

Baksi said the solution does not require conventional documentary packages. Instead, it enables eligible businesses to submit sales invoice data digitally through HSBCnet to obtain receivables financing. According to HSBC, this can reduce manual processing, shorten turnaround times and improve the customer experience.

Structured working capital for changing supply chains

Baksi argued that the second priority reflects a wider change in global commerce. Supply chains are no longer being designed primarily to minimise cost. Businesses are increasingly placing greater weight on resilience, certainty and flexibility as geopolitical tensions, shipping disruptions and changing trade corridors reshape manufacturing and sourcing decisions.

Baksi said HSBC is seeing demand for financing linked to longer-term commercial relationships, subscription-based models, technology investments, AI infrastructure and data centres among others, alongside more complex supply chain arrangements.

She also pointed to growing demand for structured receivables finance, supply chain finance and other working capital solutions capable of supporting these commercial models.

Instead of expecting customers to adapt their businesses to standard banking products, she argued that banks increasingly need to structure financing around customers’ commercial cash flows and evolving business models.

Embedding finance into digital commerce

While the move towards open account trade is changing the information available to banks, Baksi identified another structural change in the way financing can be delivered.

She explained that financing can increasingly become part of the commercial workflow itself. As procurement, ordering, invoicing and supplier management move onto enterprise resource planning systems, procurement platforms and digital marketplaces, trade finance can be made available within those environments.

According to Baksi, this represents more than another distribution channel. It requires banks to redesign the delivery of trade finance so that financing becomes more closely integrated with customers’ day-to-day operations. She said application programming interfaces (APIs), platform partnerships and embedded finance models will therefore become increasingly important.

Baksi said HSBC has already begun developing embedded finance propositions with strategic partners. She described the market as still evolving, but said the longer-term opportunity lies in integrating financing more closely into the commercial transaction and reducing the need for customers to initiate a separate banking process.

AI reinforces, rather than replaces, judgement

Baksi said AI is enabling this evolution but is not the strategy itself. She explained that HSBC is applying AI to document-intensive operations and financial-crime control processes, including sanctions screening, where it can improve speed, consistency and productivity.

In her view, AI’s greatest value lies in helping banks process larger volumes of information more effectively while allowing relationship managers to focus on understanding customers, structuring solutions and exercising judgement.

She said relationship managers will remain important, with AI supporting instead of replacing the human judgement required to manage risk and advise clients.

Looking further ahead, Baksi said tokenised money and programmable payments could eventually support new trade finance models. HSBC has introduced a tokenised deposit service in Singapore, but she noted that earlier blockchain-based trade initiatives had not scaled. She therefore described tokenisation as a longer-term development rather than an immediate operating priority.

The next operating model for trade finance

For Baksi, the future of trade finance is not about replacing documents with data. It is about responding to the way international commerce itself is evolving.

As documentary trade gives way to open account trading, commercial information generated through customers’ business systems will increasingly complement traditional trade documentation. At the same time, financing is evolving from supporting individual transactions towards enabling wider commercial relationships and becoming more closely integrated with customers’ digital workflows.

TradeCash provides one practical application of this transition and demonstrates how commercial data could simplify receivables financing without changing the principles that have long underpinned trade finance. More broadly, it points to an operating model in which trade finance becomes increasingly data-driven, integrated into commercial workflows and structured around customers' evolving business models.

The discussion suggests that the next operating model will be defined less by the elimination of documents than by banks’ ability to use commercial data more effectively, structure financing around changing business models and integrate trade finance more closely into customers’ operating systems.

For Baksi, the technology underpinning trade finance will continue to evolve. What should remain constant are the principles of understanding the underlying commercial transaction, assessing risk prudently and financing businesses in ways that reflect how they increasingly trade.