SINGAPORE and HONG KONG, Nov. 1, 2024 /PRNewswire/ -- The fintech firm is leading a sea change in trade finance for SMEs by converting operational data into valuable assets to address the long-standing financing gap faced by asset-light businesses
eCOM Registry, a fintech firm powered by a combination of blockchain, artificial intelligence (AI), big data, and other cutting-edge digital innovations, is redefining trade finance for small and medium-sized enterprises (SMEs) by turning operational data into valuable assets that can be used as collateral for loans.
Despite their vital role in driving economic growth and trade, SMEs often face difficulties securing finance from traditional institutions due to limited assets, smaller scale and stringent collateral requirements coupled with lengthy application processes.
This global financing gap for SMEs has grown to trillions of US dollars, intensifying the demand for financial solutions that are simple, fast and flexible. eCOM's platform is designed to address this gap by leveraging data to unlock new credit opportunities.
In fact, unsecured loans, which eliminate the need for traditional collateral and lengthy paperwork, are gaining traction among SMEs, providing them with faster, more flexible access to finance.
However, this approach hinges on sophisticated data-driven algorithms to deliver accurate credit assessments, robust risk management, and informed decision-making. As such, effective data collection, storage and analysis have become essential components of successful digital finance.
eCOM is leading this transformation, harnessing big data, artificial intelligence (AI) and blockchain to revolutionise trade finance in the shipping industry.
Headquartered in Singapore, the fintech company is backed by Kingful Ventures, chaired by Andy Tung, a non-executive director at Orient Overseas International Limited. Its operations span Hong Kong, Shanghai, Australia and the Philippines.
The company aims to bridge the massive financing gap for SMEs in the shipping sector - such as freight forwarders, logistics companies and cargo owners - by providing collateral-free loans through an innovative digital financial model. The growth potential of this model is vast.
Philip Ho (left), CEO of OnePort; Horace Mak (centre), founder and executive director of eCOM Registry Pte Ltd and eCOM DataFin Limited; and Andy Tung (right), founder of Kingful Ventures and non-executive director at Orient Overseas International Limited, join forces to introduce an innovative fintech solution that revolutionises trade financing with a data-as-collateral approach.
Bridging an ocean's deep financing gap
Traditional financial institutions face considerable uncertainty when extending credit to SMEs in the shipping industry, primarily due to a lack of collateral and time-consuming due diligence processes.
Shipping service providers, typically asset-light and dispersed across the supply chain, offer little security for lenders. Moreover, the complexity of service transactions - unlike traditional goods trade - makes it difficult for banks to verify the authenticity of the services.
Even when valid data is available, banks often face lengthy verification processes, resulting in inefficiencies.
"Against this backdrop, we need a new approach and technology to bridge the gap between SMEs and financial institutions. eCOM serves as the connector, allowing data to tell the story and enabling lenders to carry out credit evaluations more efficiently and accurately," said Tung.
Navigating a complex ecosystem with knowledge and data mastery
eCOM's model offers two distinct advantages. First and foremost, the company has a deep understanding of the entire shipping ecosystem.
"Numerous participants from various parts of the shipping supply chain, including freight forwarders, logistics companies, ports and customs authorities, contribute to a complex ecosystem, each with its own unique characteristics," Horace Mak, founder and executive director of eCOM Registry Pte Ltd and eCOM DataFin Limited, explained.
"Understanding how to gather, interpret and integrate data from these sources is crucial to assessing creditworthiness and providing effective solutions," said Horace. "Our team, alongside Tung, has deep expertise in this ecosystem, with 20 to 30 years of experience in data integration and exchange."
Using advanced data recognition and processing technologies, including AI models and analytical algorithms, the team continuously optimises parameters for risk assessment and precise forecasting.
Furthermore, eCOM's financial experts work closely with financial institutions to analyse historical data, expedite KYC (Know Your Customer) and KYB (Know Your Business) processes, pre-approve credit lines and help banks identify high-quality clients.
This collaboration, according to Horace, tremendously improves the efficiency of financial institutions' credit services and risk management.
In 2021, eCOM introduced its data-driven financing solution in partnership with OnePort, a joint venture with Hong Kong's leading port group.
By December 2023, eCOM DataFin Limited, the company's Hong Kong subsidiary, secured a lending licence to fund its eSPIN Cash (revolving loan) and Easy Ship Easy Pay (post-shipment payment) products, specifically designed for the port sector.
Robust risk management and data governance
When asked about risk management, Horace explained that all data gathered by eCOM is sourced from trusted entities, including ports, customs authorities and shipping companies.
Harnessing blockchain and cloud computing technologies, eCOM guarantees both the authenticity and traceability of this data, he said.
Philip Ho, CEO of OnePort, added: "Data privacy is paramount. We ensure all data is collected with customer consent and is rigorously managed in line with local privacy regulations."
eCOM also continuously tracks multiple data points across the trade chain in real-time, allowing lenders to monitor borrowers' performance and conduct dynamic cross-checks to make timely adjustments.
The company has established internal committees for information security, risk control and digital finance to oversee all process management, ensuring that both data handling and lending practices adhere to stringent regulatory standards.
After nearly a year of trial operations at the Hong Kong port service platform, eCOM has successfully validated its core technology, business model and profitability. Building on this success, the company is now actively exploring new global partnerships in digital financial services.
In 2022, eCOM launched a data finance platform in Shanghai's Free Trade Zone, offering data-driven financial services to local clients. The company has also made rapid progress in China's Greater Bay Area and at Australian ports.
Looking ahead, eCOM plans to develop additional financing products for cargo owners and freight forwarders, including freight financing, purchase order financing and supply chain financing.
"We set sights on building strategic partnerships with financial institutions, leveraging our data-driven model to offer joint loan solutions. Our goal is to bring more financial institutions and investors on board, ensuring that more SMEs can access efficient, high-quality loan services," Tung concluded.