In the tide of financial globalization, cross-border financial services are becoming an important link to connect the economic context of all parts of the world. Like the same secret and efficient transnational optical fiber, it closely connects capital, trade and opportunities, attracting the attention of countless enterprises and investors.
The scope of cross-border financial services is far beyond imagination. It not only covers the traditional cross-border payment and settlement, but also extends to many key areas such as international trade financing, cross-border investment and foreign exchange risk management. For an export enterprise, when its products cross the ocean and arrive at a foreign port, the cross-border payment system is silently completing currency exchange and fund transfer to ensure the safe and rapid return of the payment. SWIFT, an international payment giant, handles tens of millions of cross-border transactions worth trillions of dollars every day and becomes the financial lifeline of international trade.
In the field of international trade financing, cross-border financial services are even more effective. The letter of credit service provided by banks to importers is like injecting a booster into cross-border transactions. When a Southeast Asian clothing importer placed an order with a factory in Bangladesh, the letter of credit issued by the bank provided the factory with payment guarantee, which made it dare to put into production on a large scale.
Cross-border investment service is a bridge connecting the global capital market. When American pension funds are optimistic about emerging technology companies in Asia, a series of cross-border financial services institutions such as custodian banks and securities brokers have begun to work together. They help the fund to complete complex processes such as compliance review, cross-border remittance of funds and equity registration. As an international financial hub, Hong Kong's cross-border investment transaction volume increased by 18% in 2023, which is precisely because of its perfect cross-border financial service ecology to gather global capital.
With the surge of financial technology, cross-border financial services are undergoing radical changes. The application of block-chain technology in the field of cross-border payment has reduced the transaction time from days to hours and reduced the transaction cost by 30%-50%. For example, JP Morgan Chase's block-chain payment platform has provided services for more than 100 multinational companies. At the same time, the cross-border use of digital wallets has expanded, and Alipay and WeChat Pay have launched overseas versions to provide convenient payment experience for cross-border tourism consumption. In 2023, mobile payment accounted for 45% of China tourists in consumption abroad.
However, cross-border financial services are not without waves. Regulatory differences have always been the sword of Damocles hanging overhead. The anti-money laundering policies and capital flow restrictions in different countries require financial institutions to build a complex compliance system. At the same time, the risk of exchange rate fluctuation still exists, and the instability of emerging market currencies makes cross-border enterprises face great challenges. The Mexican peso fluctuated by 15% against the US dollar in 2023, which had an impact on transnational trade and investment.
Looking forward to the future, cross-border financial services will develop in a more intelligent and integrated direction. Digital currency, the central bank, is expected to become a revolutionary tool for cross-border payment. The success rate of the cross-border pilot project of digital RMB between China and Chinese Hong Kong is as high as 99.8%, which indicates the dawn of the new model. With the in-depth implementation of regional comprehensive economic partnership agreement (RCEP) and other trade agreements, cross-border financial services will focus more on key regions such as Asia-Pacific and inject new vitality into global trade. For enterprises and investors, whoever can gain an insight into the changing trend of cross-border financial services in advance will be able to seize the opportunity in the global wealth map and let capital flow unimpeded on the safe channel.
