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.
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/
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."
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
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