Policy Address
49. Small and medium enterprises (SMEs) play an indispensable role in the real economy of Hong Kong, but they may encounter liquidity problem from time to time. The existing paper-based trading processes and dispersed storage of commercial data have rendered it difficult for banks to collect and verify the relevant information. If credit assessments cannot be made according to up-to-date operational or financial data, banks may instead require enterprises to provide collateral such as property to reduce credit risks. This is a long-standing problem in SME financing.
50. We think that the optimal use of data may offer a solution to the problem. To this end, the Hong Kong Monetary Authority is in the process of developing the Commercial Data Interchange, which is expected to commence operation next year. This new financial infrastructure offers a centralised platform for connecting to banks through which enterprises can authorise service providers such as payment systems, public bodies or utility companies to furnish the banks with data. The banks can then make more accurate predictions about the sales and operation of the enterprises, thereby reducing the need for enterprises to provide collateral.
51. The Commercial Data Interchange enables SMEs to make use of their own data to gain access to more convenient financing services. It is also a major breakthrough in the development of financial infrastructure in Hong Kong, under which a platform is established to facilitate secure data sharing based on the consent of enterprises and allow the local banking system to serve the real economy more efficiently.
