Trade Finance might sound obscure to an ordinary person, but in the international financial, trade and sales market, it plays a vital role.
Trade finance comprise a set of financial instruments that facilitate international trade thereby ensuring easy import and export and thereby expansion of business and sales. These set of instruments play together to produce cohesive rhymes.  The international risks are reduced, which include currency fluctuation, political upheaval, non-payments, delayed payments or partner’s solvency.
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Earlier trade finance used to be cumbersome with a mountain or paperwork, but technologies played its vital role in trade finance as well. From artificial intelligence to blockchain, a number of innovations are trying to make trade finance as simple as possible. For instance, the use of blockchain has reduced the need for open ledger structure and there is no need for middlemen to collect any necessary information. Through blockchain the information is collected, accessed, updated and highly transparent. Large corporations like Deloitte and startups like Komgo are adapting to blockchain for trade finance.
Trade Finance is important, let us explore some leading digital trade finance platforms ruling the international financial and imports / exports market:
1. Citi – best trade finance provider bank
At present, Citi is one of the best trade finance banks in the world. The bank focuses on digitization. Its wide toolkit comprise host-to-host applications, APIs to offer greater connectivity and solutions like e-signatures helping clients to continue their business operations and maintaining covid-19 guidelines appropriately. It is one of the founding banks of the standard-setting Trade Information Network and is also a prominent investor in blockchain consortia Komgo and Contour.
2. Contour – Blockchain in Trade Finance
There is plenty of buzz around the use of blockchain in Trade Finance. Along with large corporations, we have a new name, Contour, in the space. Earlier started as Voltron, this tech firm between eight banks and fintech consortium R3. Contour started as a trade finance prototype aiming to digitize letters of credit using blockchain. As of now, it is enjoying partnership with over 50 banks all over the world.
3. Networked Trade Platform (NTP)
NTP calls for an innovative trade finance technology launched in 2018 in Singapore. It was set-up as a multibank trade information management platform aimed at streamlining paper-based trade financing processes into a unified ecosystem. NTP is a part of government initiatives that bolstered Singapore’s reputation as a Global trade leader.
4. Tradeteq – best trade finance provider, non-bank
Tradeteq, London based financial technology, uses artificial intelligence (AI) to reduce trade finance gap by letting small and medium sized enterprises deal with their foreign counterparts. Tradeteq invests in risk analytics, portfolio management and investment automation to make them standard and efficient for businesses. Its portfolio management and trading functions let the investors access to numerous instruments coupled with the ability to monitor and report trades.
5. ANZ – Most innovative bank for trade finance
ANZ is one of the innovative trade finance bank in the world, which has made foreign trade accessible for everyone in the market. Its strategic capabilities include digitization and automation through machine learning, AI, smart optical character readers, natural language processing. These technologies have reduced quantum of physical work and improved the turn around time by more than 40%, resulting in enhanced client connectivity. ANZ is also a founding member of Lygon, an important blockchain innovation in trade finance.
6. Standard Bank – Best trade document management
For the purpose of Trade initiative, Standard bank has automatized almost 80% of its insurance procedures, which in turn has drastically improved its response time. It is a part of the bank’s digital strategy to upgrade trade finance. With its new API, it can link client’s ERP platforms with its internal systems without any need of re-feeding the data. After adapting to this automation, the issuance process time fell to 1 minute from 30 minutes. It has also partnered with Fintech start-up Tradystream, which has successfully saved time with automated document checking, sanction screening and vessel tracking processes.
7. Mashreq – best use case of AI in trade finance
Artificial Intelligence is everywhere and Mashreq has helped trade finance taste the flavours of AI as well. Mashreq is headquartered in UAE, and it is utilizing AI to identify new trade opportunities worldwide. The bank’s trade team has developed TradeFursaa, which draws data from the bank’s multiple business groups and applies pre-defined rules to pick up likely candidates. With the help of ML and optical character recognition to identify and validate data from its unstructured format, the response time has improved by 60%.
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The world of trade finance will continue to evolve and there is no end in sight. Today, we have a tech shaped trade finance and these innovative solutions are substantial and noteworthy. We tried to cover the best ones we could but this list is not an exhaustive one. Do let us know if we missed out any important digital development of trade finance.
