Turning artificial intelligence into actual impact for documentary trade and working capital

Trade finance remains a highly complex, document-intensive activity, involving large volumes of structured and unstructured information and requirements that vary from one transaction to another. When documents need to be reviewed manually, processing can take time and discrepancies can create additional work for businesses and their banking partners.

AI in trade finance can help streamline document processing, improve payment certainty and support better client experience — provided it’s implemented with appropriate controls and human oversight.

Turning AI’s potential into dependable value remains a challenge. According to Gartner, 50% of generative AI projects were abandoned after proof of concept because of poor data quality, inadequate risk controls, escalating costs or unclear business value.¹

These risks are particularly relevant to trade finance. The volume and variability of documentation demand strong data foundations, appropriate controls and a clear understanding of where automation can create meaningful value.

Client expectations are also rising. The HSBC Trade Pulse Survey, conducted in November 2025, found that 38% of respondents were already using AI or machine learning to optimise areas such as sourcing, logistics routes or inventory levels. A further 46% planned to do so.² As businesses apply AI across their supply chains, they’ll increasingly expect their financial partners to provide trade finance services that are simpler, faster and more transparent.

AI is evolving how operations teams are measured. They’re no longer rewarded for simply keeping trade and treasury running. The potentiality of AI is raising client expectations on all facets of delivery — service quality, speed of response and accuracy. The real advantage comes from combining the technology with human expertise to repeatedly raise the bar for how work gets done, and how solutions are delivered to clients.

The objective isn’t AI for its own sake. It’s delivering the right solutions with increasing speed, accuracy and quality of service.

HSBC has announced the launch of Smart Checking, an AI-powered solution designed to transform  how trade finance documentation is processed, standardised, traced and checked.

The solution combines HSBC’s proprietary AI with the expertise of its trade specialists to read, interpret and check trade documents at scale. AI handles high-volume, repetitive tasks, while experienced specialists apply their judgement where it has the greatest impact.

How Smart Checking works:

1. Ingests trade documents
2. Extracts structured and unstructured information
3. Classifies documents and data points
4. Interprets transaction-specific conditions
5. Applies documentary credit checks
6. Routes low-confidence results, exceptions and complex edge cases to specialists

HSBC processes more than a million documentary presentations each year, including documentary credits and collections.  Some presentations can extend into hundreds of pages and contain a wide range of structured and unstructured data points requiring extraction for further review.

The complexity is further increased because documentary credits have conditions unique to that transaction and the underlying commercial contract. As a result, documents and checking requirements can vary significantly from one transaction to another.

Smart Checking addresses these challenges through a more streamlined checking process. Advanced AI models extract and classify information from documents, turning complex and inconsistent documentation into structured data. This helps information enter the process in an organised and searchable format.

An AI reasoning engine, supported by a knowledge graph, interprets the information and performs documentary credit checks. This approach is designed to support the consistent application of rules while providing a framework for explainable and auditable outcomes.

Smart Checking has been developed as a control-led automation journey. It’s designed around compliance and policy requirements, with confidence-based workflows determining where automation is appropriate and where human review is required. This helps preserve the expertise and control that are fundamental to trade finance.

The solution is built on HSBC’s extensive experience and scale in documentary trade, supported by its substantial repository of trade finance documentation and the knowledge of specialists around the world. These specialists were instrumental in shaping and testing the solution, helping define how exceptions should be presented and ensuring that the workflow reflects real-world checking practices.

For clients, faster document processing can help accelerate time to payment. This can provide, greater certainty and help businesses access liquidity and working capital sooner. The impact can extend across supply chains, supporting companies as they respond to customer demand and pursue their next commercial opportunity.

In a regulated environment, AI must do more than process documents. Its decisions need to be evidenced, inspected and repeated. That requires accuracy and consistency, explainable and auditable outcomes. It also means aligning with the wider direction of trade digitisation, including frameworks such as the ICC’s Uniform Rules for Digital Trade Transactions (URDTT) and the Model Law on Electronic Transferable Records (MLETR).

In practice, organisations need clear accountability and robust audit trails. Human review remains important for judgement, exceptions and overrides, while records should show what was automated, what required approval and how an outcome was reached.

Cyber risk and AI risk must also be considered together. Appropriate controls and traceability support responsible deployment and help build confidence among clients, colleagues and regulators.

The operating model is augmentation, not replacement. AI handles high-volume, repetitive tasks, while trade specialists retain judgement over complex exceptions and remain accountable for decisions. As capability and confidence mature, the balance between human-in-the-loop and human-on-the-loop oversight can evolve, supported by evidence and within relevant compliance and policy requirements.

This is what makes scale possible. Not automation alone, but technology operating alongside specialist expertise, clear accountability and appropriate controls.

The next phase of digital trade won’t be defined by technology alone. It’ll be defined by how effectively technology is combined with expertise and a clear understanding of where human judgement matters most. By applying AI to high-volume, repetitive activity while preserving the expertise and control that are fundamental to trade finance, the industry can make documentary trade faster to process and more consistent — helping businesses access liquidity and working capital sooner and supporting the supply chains that depend on it.

The use of Smart Checking capabilities at HSBC varies by market and client configuration.