Friday, 6 April 2018

CHAIRMAN'S MESSAGE - Sean Edwards, ITFA Chairman / Head of Legal at SMBC

Dear Members and Friends,

If the first quarter of 2018 is anything to go by for the remainder of the year, then we are in for what could be a bumpy and painful ride in the next nine months for emerging markets, which could end up in laughter or in tears. Credit has shown signs of frailty and weakness across the board, and from this point, the cracks can either become exacerbated or simply patched up. It’s anyone’s bet, that’s how fluid and delicate the situation is.

Going forward, it is going to take some consummate crystal-ball gazing to predict how the tête-à-tête between two of the world’s largest economies in the US and China will impact economies, companies and the markets in general in the months to come. What is expected to be extremely challenging for market participants across all the investment spectrum is the escalation of the whole situation; if it will remain confined and controlled or whether it will impact the greater scheme of things. But as a very experienced trade economist (and past contributor to these pages) told me at least these are battles and it’s not war – yet…

In the April edition of the ITFA Newsletter André Casterman, the chair of our fintech committee, has contributed ''ITFA Fintechs on Stage in London at Commonwealth Bank of Australia’’ following our successful inaugural fintech demo evening at CBA. Shannon Manders (GTR) interviews our very own Silja Calac - ''Don’t be Afraid of making Mistakes.'' The ITFA Board is also pleased to announce that we have a new ITFA Board Member, Head of Asian Activities, Ms Sophia Xiao, who takes over from Ms Jane Li and whom we thank for the sterling work she has done for ITFA. On another positive note, we are delighted to introduce four new ITFA members; VTeam Financial Service Group, BMCE Bank International plc, Zurich Credit and Political Risks and Banco Cooperativo Espanol (BCE).

Preparations for the 45th Annual International Trade and Forfaiting Conference which will be held in Cape Town between the 4th and 6th of September, are bounding ahead with the Gala Dinner venue now booked. As we have announced, the conference programme has now been finalised and can be found here. We urge you all to register and hope to see you in Cape Town.

We look forward to hearing from you with any feedback you may want to share with us by sending an email to myself, any of the Board Members or to our general email, info@itfa.org.  

Best wishes,
Sean Edwards

Thursday, 5 April 2018

ITFA FINTECHS ON STAGE IN LONDON AT COMMONWEALTH BANK OF AUSTRALIA by Andre Casterman, ITFA Fintech Committee Chairman

New platform-operated services and data-intensive processes were the highlights of the first IFTA FinTech event - London, April 2018. The ITFA FinTech Committee provides an educational forum to the ITFA membership to keep abreast of opportunities to collaborate with FinTech companies.

The ITFA FinTech committee held its first event on March 22nd in London at CBA's prestigious Innovation Lab located in Ludgate Hill, London. CBA, an ITFA member, kindly offered to host the gathering.


Attended by over 60 bankers, insurers and FinTech representatives, the event profiled leading FinTech companies focused on helping incumbent financial institutions grow their transaction banking business. The "bank - fintech" collaboration theme was thus high on the agenda.


Following a warm welcome by CBA's Gerry Gannon, both Sean Edwards and André Casterman of ITFA introduced the FinTech landscape that is increasingly offering opportunities for financial institutions to address key pain points and revisit business practices.


As per the BIS report entitled "Implications of Fintech developments for banks and bank supervisors", observation 8 on page 6 states: "The same technologies that offer efficiencies and opportunities for fintech firms and banks, such as AI/ML/advanced data analytics, DLT, cloud computing and APIs, may also improve supervisory efficiency and effectiveness".


Paul Coles, ITFA Board Member and Chair of ITFA Market Practice Committee and Global Transactional Distribution, HSBC GTRF explained the rationale to consider the FinTech developments as part of the emerging market practices.

A series of ITFA-registered FinTech companies had been invited to share their value propositions during 20-minute pitches. The hand-picked FinTech's were CCRManager, Tradeteq, LiquidX, Toredo, R3 Marco Polo and INTIX. Whilst some help banks offload their balance sheets, others focus on addressing banks and corporates by providing online credit insurance, blockchain infrastructure capabilities or data management.




#1 CCRManager - Expand your trade distribution network


Ka-Kit Man, CEO at CCRManager kicked off the pitches with an introduction to CCRManager, a new market place for originators. With CCRManager, banks can distribute trade assets digitally.

CCRManager which was launched in 2017 is a digital market place to distribute trade finance assets. The platform embeds a non-auction trading workflow as well as extended analytics and aggregated market reports for price discovery and market depth. See the May 2017 launch announcement.

#2 Tradeteq - Offload trade finance assets to capital markets


Christoph Gugelmann, co-founder and CEO of Tradeteq introduced the new Trade Finance marketplace that was launched in March 2018. Tradeteq eases the distribution of Trade Finance exposure to non-nank financial institutions. Christoph said: "There is a huge gap to be filled as banks intermediate about USD 9 trillion of trade finance whereas alternative funders only contribute to less than USD 0.025 trillion of financing. Such market failure must be solved." - check out the recent Euromoney interview for more as well as the recent GTR Ventures announcement.

Tradeteq aims to become the marketplace for banks to offload trade assets to non-bank financial institutions. The platform reduces transaction costs, operational friction, and time demands for funding trade finance exposures. Originators list opportunities, seamlessly share data, and negotiate transaction structure and terms. Investors can gain access to and evaluate new investment opportunities and conduct due diligence.

#3 LiquidX - A global network for trade finance and working capital assets


Jo Wissing, Director at LiquidX presented LiquidX which offers a one-stop solution for working capital, trade finance, insurance and technology solutions. LiquidX offers a single legal and technology infrastructure that enables corporates and financial institutions to transact more efficiently and effectively with each other. It covers origination, distribution, risk management and technology solutions delivered via a single legal framework.


LiquidX handles true-sale receivables finance, supply chain finance, dynamic discounting, investor financing and more such as L/Cs, insurance and blockchain support as from Q2 2018.





#4 Toredo - online insurance capacity for single situation non-payment exposures

Chris Hall, senior underwriter, global financial risks at Liberty Specialty Markets introduced Toredo as follows: "Whereas current market practices lead to inefficiencies in handling short-term, low premium, single situation trade credit risks for both customers, brokers and underwriters, Toredo will offer a fast, efficient and competitive online platform for all brokers and clients to access increased non-payment insurance capacity for short-term, single situation, trade finance and commodity related exposures. This will offer clients greater visibility, efficiency and transparency on market appetite, pricing and capacity."


Toredo has the capability to be used for c. 20 different product types. Current pre-agreed bank obligor capacity on the platform is $27.4bn. The London Market Credit Consortium (LMCC) will underwrite high volume, relatively low value, short term commodity and trade related risk for banks and commodity traders using a proven technology.

#5 R3 / TradeIX Marco Polo - re-wiring trade finance


Sophie Wiberg, Project Lead at R3 introduced Marco Polo as an open Trade Finance Platform built on an interoperable business network powered by open APIs and Distributed Ledger Technology. Marco Polo is an industry undertaking by 20 of the world’s foremost financial institutions supported by enterprise technology firms TradeIX and R3.

Marco Polo is offering two threads under one project for financial institutions and corporates to join and optimise their trade finance solutions. Marco Polo is the collaborative project umbrella supporting the delivery of both TradeIX's TIX Platform and the Universal Trade Network (UTN).

#6 INTIX - Monetise your transaction data


André Casterman, CMO, INTIX introduced the typical challenges faced by financial institutions to access and leverage transaction data: accessibility, visibility, infrastructure and delivery.

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Data management technologies help financial institutions access and use the client and transaction data being processed in various systems. INTIX makes this happen in a way similar to what Google does on the Internet. As data becomes available, it can be monetised.


The bankers' view - collaborating with FinTech's already a reality

Feedback and experience on the benefits of embracing FinTech propositions were shared during a panel featuring three trade practitioners and members of the FinTech Committee: Adeline de Metz, Global Co-Head of Trade and Working Capital Solutions, UniCredit; Farah Shaikh, Vice President – Trade Finance Operations, Crown Agents Bank; Daniel Rymer, Global Transaction Banking Department EMEA, Mizuho.

As bankers explained, the FinTech propositions make full sense and collaboration with various FinTech platforms is already a reality for some of them.


ITFA FinTech Committee to focus on key market-level themes

The gathering demonstrated the criticality of the four market-level themes that the ITFA FinTech Committee has chosen as priority areas to concentrate on and promote:


Discover more blogs developed by the FinTech Committee members on the above themes: Collaboration"Collaborating with FinTech drives transformation and accelerates change"Collaboration: "Trade Finance collaboration set to step up in the year head". Platforms"Online market places will help re-invent (and digitise) trade financing"Data Analytics"What are the Data Management challenges facing transaction banks?".

You can access the event presentations on the ITFA website at the following Member restricted page - http://itfa.org/member-area/events-and-conferences/

More info on "Trade as an Investable Asset Class" from TXF and EFA Group

Trade finance as an asset class is set for growth in the near term, according to 78% of respondents in a survey of investment professionals carried out by TXF in association with EFA Group. Download the recent investor market survey.

More info on "Trade as an Investable Asset Class" from TradeTeq and GTR Ventures

Francois Dotta, CEO of EFA Group says: “We wanted to get a deeper understanding into the factors that are driving investors to allocate into trade finance, as well as the reasons why they are not yet invested. And the insights we received make for good learning points that can help us further stimulate interest and investments in the asset class.”

In association with ITFA and GTR Ventures, the TradeTeq team looks at two elements that have been blocking the widespread distribution of trade finance as an asset class: one is the lack of reliable technological infrastructure to allow institutional investors to access trade finance portfolios, and the other is the need for standardised reporting to improve credit transparency. Filling these two gaps will push trade finance distribution from isolated one-off practices to an efficient, diverse and competitive marketplace. Download the recent Tradeteq white paper here.

Kelvin Tan, Co-Founder and Chief Investment Officer of GTR Ventures adds: “The supply of low risk trade finance assets, coupled with institutional demand for similar assets which are uncorrelated, should have made distribution common place by now."

Join us at the next ITFA events

Check out www.itfa.org for more info on future events.



''DON'T BE AFRAID OF MAKING MISTAKES'' by Shannon Manders, GTR Editor

In this chapter of GTR’s series about inspirational women, Silja Calac, senior surety underwriter at Swiss Re Corporate Solutions and former banker, and ITFA Board Member, tells Shannon Manders (GTR) about her journey to become the respected luminary in the world trade and forfaiting that she is today. 

“It all boils down to luck: being at the right place at the right time,” says Silja Calac, describing her professional path, leaning across the table as if confiding a secret.
Her 20-odd-year career has seen her rise to the very top of the banking world, and then switch careers to turn her hand to developing insurance products.
So, brushing aside her modesty, you get the sense that for this risk specialist, now a senior surety underwriter at Swiss Re in Frankfurt, success has been more of a result of hard graft than pure luck.
Calac was born in Switzerland and obtained a master’s degree in international trade at the Institute of International Economics and Commerce in Paris. In 1996 she started out as a junior trader, joining the secondary market team of BDEI-Credit Lyonnais in Paris. She then spent eight years in Singapore, where she helped establish the Asian forfaiting desk within Bayerische Hypo-und Vereinsbank. Her next move saw her return to Europe, joining UniCredit in Munich, where in 2007 she became the bank’s global head of trade risk management. In 2015, almost two decades into her banking career, she changed tack to take up her current role in Swiss Re’s credit and surety team, where she is responsible for expanding the company’s surety product offering for banks.
Calac is also a board member of the International Trade & Forfaiting Association (ITFA), and heads up its insurance committee.
Calac reveals with amusement that her “big break” into the industry was as a result of a secretarial degree that she had obtained before completing her master’s. The bank that she joined was looking for someone who could type and write stenography – and Calac’s first role was as a replacement for a secretary on maternity leave. But with her foot in the door, it wasn’t long before she had worked her way to joining the bank’s forfaiting team, where her focus was on distribution.
She felt immediately at ease in the forfaiting community – and decided that that’s where she belonged, despite her initial dreams of becoming a derivatives trader.
Calac talks with enthusiasm about how her years of experience working in risk at banks led to her recent leap into the insurance industry.
The use of sureties has grown steadily over the last decade as insurers have started to cover the bank guarantee business within their surety activities. This development has seen the product transform from a traditional surety to an on-demand guarantee.
“At UniCredit we had started to cover the risk under our guarantee facilities with some insurance companies. But it was not a systematic offering from insurance companies – they just did it on an opportunistic basis,” she explains.
One of the insurance companies that Calac worked closely with was Swiss Re. So when she decided to make a career change, the insurer seemed like the “perfect product match”, as Calac puts it. It just so happened that Swiss Re had set its sights on formally establishing a surety for banks business.
“It’s a lot of fun,” she says with palpable excitement. “It works so well. Banks get hooked on it, because it really is an easy way for them to get more capacity for their business.”
It is this passion for what she does, combined with her desire to acquire new skills, that has driven Calac throughout her career. “I get frustrated when I can’t learn anything new anymore. For me, if it becomes routine, it becomes awful,” she laughs.
Despite her many triumphs, however, she remains loathe to point out her greatest achievements. She compares her career, rather philosophically, to a painting: “You cannot say which is the nicest brush stroke in the painting – it’s the whole picture which is nice.”

Diversity in forfaiting
Throughout her career, being a woman in the forfaiting community has been a fairly smooth ride on account of the diversity in the market, Calac says. This, she explains, is reflected in ITFA gatherings, which bring together the “people who do the business” and not necessarily those in senior management.
It is at this very top level where she admits that there is a problem in that there are still too few women – although she believes that this too is changing.
“When I started at UniCredit in Munich, I was the only woman on the management team. When I left, there were just as many women as men,” she says.
Because of this change, Calac reports that she has never felt her gender to be a hindrance when climbing the career ladder. Although she says she has been aware that she has been paid less than her male colleagues – and that her battle for equal pay brought little success.
On one occasion, she recalls being motivated by her employer’s “women’s network”, aimed at churning out more female leaders, to broach the topic with her boss – knowing full well that she earned less than her male counterparts. The response from the bank’s HR department was that Calac would have to provide unequivocal proof of the disparity. “How could I prove it?” she laments. “I couldn’t do anything about it.”
With experience and time, Calac says she has grown more comfortable with making demands – which she used to actively avoid.
“In the beginning, I would make demands for my employees in the way of a small bonus or something, but not for myself,” she explains. This approach changed when, early on, she solicited private coaching sessions, which she had intended to fund herself. To her horror, her first piece of homework, as set by her coach, was to ask her employer to pay for the sessions. Failing to do so would result in her not being able to complete the course.
“I was shocked at this suggestion,” Calac recalls. “But the coach convinced me that, with these sessions, I would offer even more value to my employer. And so, I went to my boss and asked him and his response was: ‘Yes sure, that’s a brilliant idea.’ It never would have occurred to me that I could do that.”

With this recollection in mind, Calac’s advice to women in the trade finance industry is, at all times, to be bold. “Don’t be afraid of making mistakes and doing things that you think you can’t do. Because chances are you probably can.”

Wednesday, 4 April 2018

NEW ITFA BOARD MEMBER AND HEAD OF ASIAN ACTIVITIES, MS QIAN (SOPHIA) XIAO - BANK OF CHINA HEAD OFFICE


Ms. QianSophia XIAO, currently serves as the Head of Forfaiting Team at Global Trade Services Department of Bank of China Head Office. Ms. Xiao is an expert specialized in trade finance services from her 23 years’ professional career. She has been in charge of foreign exchange management, product development, marketing of trade finance business for Bank of China globally, and is familiar with all types of international settlement, guarantee and structured trade finance products.

Before the current position, Ms. Xiao had served as the Head of Factoring for more than four years since 2009 and she was also the Head of Forfaiting and Guarantee Division at Trade Services Department of Bank of China H.O. from 1999 to 2009. She began her career at International Settlement Management Division of International Department of Bank of China H.O.in 1994.

She used to service as the guarantee, forfaiting and factoring panels of experts for ICC (International Chamber of Commerce)China, non-executive director of IFA(International Forfaiting Association, now ITFA), Chairperson of the Nearc (North and East Asia Region Committee) of IFA.

Ms. Xiao holds a BA degree in Finance from the Capital University of Economics and Business and a Juris Master degree from the Law School of Peaking University.

May we take the opportunity to thank Ms Jane Li, who over the years has done a sterling job in heading the Asian Activities within ITFA. The work she has done will be used as a stepping stone to undertake more initiatives in the region. Without a doubt, Sophia will continue were Jane left off, and will be working in getting Chinese banks to join the ITFA Annual Conference in Cape Town.

Tuesday, 3 April 2018

NEW ITFA MEMBERS

April has been a great month in terms of ITFA membership. We are pleased to announce the following four new ITFA members:

VTeam Financial Service Group (VTeam Group) is an institution which contributes to Account Receivable and Supply Chain Finance. It was founded in China in 2001. There are 3 major business units in VTeam Group, including Financial Technology BU, Financial Service BU and e-Finance BU.

With the highest market share in financial information solutions in Greater China, VTeam Financial Technology unit is one of the best financial information solution providers in the world. As the leader in Financial Service provider in Greater China, VTeam Financial Service Unit provides enterprise and agriculture finance services in Factoring and Supply Chain Finance. As for the international business, they have more than 20 years' experience of International Factoring, providing a full range of Domestic/International Factoring services to their clients.

Ms Joyce Yang will be the main delegate for all ITFA related matters. 

BMCE Bank International Plc is authorized and regulated by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). The Bank's principal activities are Corporate and Investment Banking, focused on trade, structured and project finance and corporate lending for target customers based in Africa or with an interest in the region, and Treasury and Capital Markets, focusing on currency and interest rate markets of the region.

Mr Gustavo Seco will be the main delegate for all ITFA related matters.

Zurich Credit and Political Risks provides cover for investors, banks, contractors, and other firms with exposure in emerging markets from risks that can potentially end their operation including expropriation, political violence, currency inconvertibility, contract frustration, and non-honouring of sovereign, state-owned enterprise or privately-owned debt.

Ms Amy Clarke will be the main contact person for all ITFA related matters.

Banco Cooperativo Espanol (BCE) is the bank services provider for CAJA RURAL, its shareholders, a group of 29 cooperative bank operating in the Spanish financial market with more than 2,350 outlets and 8,300 employees.

Looking for synergies, the group centralises in BCE many essential activities, services and procedures such as:

 - Connection to Spanish Clearance System
 - Connection to the European Clearing System: SEPA, EBA Step-2, Target 2
 - Correspondent Banking 
 - Compliance with AML, CTF, and KYC regulations
 - Access to SWIFT network
 - Treasury, FX, Money Markets, Securities, Private Banking
 - Legal Advisory

According to this structure, BCE concentrates the liquidity, implements the investment strategies, manages the trade finance transactions and channels the incoming and outgoing payment flows of the whole group.

Mr Antonio Mudarra Esquina will be the main contact person for all ITFA related matters.




Monday, 2 April 2018

UPCOMING EVENTS

May we taker the opportunity to remind our readers about the upcoming ComRisk 2018 event. For the third consecutive year, this event is the meeting point for anyone dealing with commodity trading and risk management. With sessions dedicated to each commodity sector – namely soft commodities, metals and oil & energy – as well as cross-commodity discussions and workshops, the Forum will tackle all kind of risks and help the 200+ participants develop the appropriate risk management response to industry uncertainties and challenges.

For more information about the event and to register, please visit the event web page at www.comriskforum.com.