Today’s banks must be nimble to meet the fast-changing needs of clients and seize the tech-driven opportunities of the digital world.

Over the last decade, technological innovations have enabled new access modes, such as online banking and mobile apps. This has helped consumers and businesses to migrate away from cash and cheques towards electronic payments. In addition, an increased demand for convenience and speed has resulted in a growing use of contactless and fast payments.

Pioneering a new kind of corporate banking

Digital has long been a key enabler of ADCB’s strategy, helping to drive service excellence and enhance efficiency. The bank’s strong financial position provides the foundation for substantial investment into the technology that is generating expansion across the business.

ADCB’s digital solutions ProCash and ProTrade have consistently exhibited strong growth in client adoption, a clear indication of their trust in the bank’s ability to deliver dependable and highly effective solutions for their cash management and trade finance needs.

The bank’s investment in these two flagship platforms demonstrates its ambitious commitment to digital transformation. The ProCash cash management platform offers highly reliable and secure online banking cash management solutions for corporates. It enables companies to initiate, reconcile and manage multiple payment types online, providing an exceptional level of customisation to meet specific client needs.

Launched at the end of 2018, ProTrade is a digital trade finance platform that provides trade finance clients with the freedom to transact online at any time, from anywhere in the world. ProTrade is designed to streamline and reduce trade cycles, automate supply chains, and lower operating costs, making international trade financing quick, easy, and secure.

Investing in innovation

ADCB continued its digital investments in 2022 and into 2023, rolling out a series of new features for ProCash to improve the user experience, with more enhancements coming soon. These included the addition of debit, credit and virtual card facilities that help clients to track their money in real time and provide a seamless proposition that continues to make banking more efficient.

In the trade finance space, ADCB introduced several innovative digital solutions, including a streamlined document handling process for exporters that has revolutionised the way trade export bills are managed, eliminating the need for the physical exchange of original documents. This accelerates the processing of export documents and leads to faster realisation of export proceeds.

ADCB has also introduced FinTrade, a Software as a Service cloud-based client platform designed to equip businesses with advanced tools for optimising their supply chain finance operations. Through this innovative solution, companies can efficiently manage their working capital and streamline their transactions in real time.

Furthermore, ADCB is investing in APIs and MT798 to make it easier for clients to engage digitally with the bank for their documentary trade solutions while using their preferred platforms.

Meanwhile, the introduction of Swift for corporates has simplified treasury and cash management processes. This automation-driven solution not only reduces the risk of errors but also provides global reach, enabling multinational corporations to manage their financial transactions and accounts with enhanced visibility and security.

Building on its growing reputation as a digital innovator, ADCB recently partnered with Dubai’s Department of Economy and Tourism and Norbloc to automate the annual updating of trade licence details for Corporate and Investment Banking clients. The digital process extracts trade licence details for existing clients via the blockchain platform, streamlining the verification process without requiring clients to provide renewed licences.

Digital corporate banking continues to evolve at astonishing speed. Banks that lack the know-how, resources or ambition to leverage the power of digital to transform their relationships with clients will quickly fall behind. But for those banks like ADCB with the experience and ambition to chart an innovative, digitally driven future, it represents a unique opportunity to seize the moment, building new, closer relationships with customers, reducing costs and enhancing revenue growth.

As part of its future transformation plans, ADCB is actively working on pioneering digital innovations that will further enhance client experience. By harnessing cutting-edge digital technology, ADCB aims to ensure that every interaction is seamless and client-centric, setting new standards for excellence in banking.

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Launched on October 8 during the Mena Supply Chain Finance Forum in Dubai, Key Trade Documents and Data Elements (KTDDE) addresses a critical pain point: the underlying transaction data is often the same at any given point along the supply chain, but, as a result of divergent commercial practices, standards adoption and national regulations, such information often ends up being inputted and rekeyed in a variety of different ways.

These duplicative data entries not only slow down processes and introduce potential for error, but also hold back interoperability across networks and trade platforms.

Although in an ideal world, each trade document would be produced in one single format that every user around the world would adhere to, in practice this is unlikely. As such, the DSI is taking a pragmatic approach to standardisation.

“Given the reality of multiple electronic versions of trade documents in existence, whether due to national regulations or commercial practices, the DSI Industry Advisory Board holds the view that DSI should continue to focus attention and encourage the alignment of standards for machine-readable data elements as a building block for interoperability across networks and platforms,” the report says.

To achieve this, the DSI’s KTDDE working group is mapping all of the trade documents identified in the Cross-border Paperless Trade toolkit, co-published by the World Trade Organization in collaboration with UNESCAP and UNCITRAL in 2022, as well as the information needed to fill them out, and identifying existing standards that can be used to harmonise each individual data element.

The eventual aim is to create a framework where data can be entered once and automatically populate across all necessary documentation without the need to translate it between different systems’ languages.

“By creating transparency and accessibility around trade documents and their core data elements, we aim to enable a more rapid digital transformation among industry,” says Pamela Mar, managing director of the DSI.

The KTDDE report scrutinises 14 foundational documents for transport and logistics, finance and payment processes – customs bonds, letters of credit, purchase orders, payment confirmations, export cargo shipping instructions, rail consignment notes, road consignment notes, sea cargo manifests, air cargo manifests, airway bills, seaway bills, ship’s delivery orders, bills of exchange and promissory notes. They join an existing set of seven documents studied in an initial report in March, bringing the total to 21 standardised references.

In the analysis, the KTDDE working group defines the attributes shared across these documents – sorted into 12 categories such as references, dates, transport modes and goods – into a key trade data glossary, taking as its base the United Nations Trade Data Element Directory, also known as ISO 7372.

By enabling a shared understanding and eliminating definition conflicts, the glossary ensures that the “who”, “what”, “where”, “when” and “how” of trade – such as the shippers, the goods, the destination, the date and the means of transport – are universally recognised, not just in one segment of the journey, but end-to-end.

“The DSl’s continued efforts to expand the understanding of digital standards in international trade represent a significant step forward in streamlining global commerce,” says Robert Beideman, chief product officer at GS1 and chair of the KTDDE working group. “By promoting data reusability and consistency across supply chains, we are facilitating more efficient and secure transactions for businesses across the globe.”

However, there is still some way to go before this near-utopian vision can be realised.

The report reveals significant variations in the level of digital readiness and interoperability among different document types.

Among issues identified are the absence of a consistent global standard for party identification in letter of credit transactions.

“Names and addresses, traditionally used for identification, do not align with the requirements of digital ecosystems, where precise identification is crucial. Establishing a universal identifier could simplify party validation, enhance anti-fraud efforts, and enable advanced analytics for combating financial crime,” the report says.

For bills of lading, there has been more progress towards standardisation and interoperability, with industry stakeholders like Bimco, DCSA, and FIATA aligning their standards to the UN/CEFACT Multi-Modal Transport Reference Data Model, which provides clear definitions of the data elements needed.

Purchase orders, meanwhile, remain largely unharmonised, with the DSI analysis finding that fewer than 200,000 companies worldwide utilise industry standards published by GS1 EANCOM and XML.

The absence of consistent, machine-readable data elements across these documents leads to multiple issues.

It affects the speed and reliability of transactions, creates barriers to entry for smaller players, and ultimately reduces the overall competitiveness of global trade operations. The transition to a fully digitalised trade framework is reliant on eliminating these disparities and fostering an environment where interoperability is the norm, not the exception.

The DSI is now calling for standards development organisations to ensure that their deliverables include data definitions that are semantically interoperable with those of others. It also recommends that industry and private sector actors implement globally recognised standards where they exist, adding that “a comprehensive digital transformation cannot occur unless all major links in the value chain collaborate”.

The KTDDE working group says it invites participants in the trade ecosystem to road-test its recommendations and provide feedback.

By the first quarter of next year, the group will deliver an analysis of the final batch of 16 key trade documents, before launching an interactive online tool that maps data and standards for the end-to-end supply chain.

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In a memo to its members dated October 27 and seen by GTR, the network says it will be discontinuing operations permanently as of November 30, and that users have until then to complete or migrate any outstanding transactions and download any required data before losing access to the platform.

“For over three years, we have provided the global trade industry with a best-in-class digital trade solution and take pride in what we have accomplished. We are very grateful for your support and belief in our vision to transform the industry,” the memo says, adding: “The investment climate has been incredibly challenging in the past year, and like many companies, it has affected our ability to raise funds and sustain our operations.”

GTR understands that Contour, which counts among its shareholders Bangkok Bank, BNP Paribas, Citi, CTBC, HSBC, ING, SEB, SMBC and Standard Chartered, as well as non-bank backers Bain & Company, CryptoBLK, R3 and Tis Intec, had sought to close a fresh funding round this year, which would have given it an additional two years of runway.

However, following months of negotiations, by late September, it became clear that not all of the banking titans behind the initiative were willing to top up its coffers, and none were willing to lead the round. Attempts by the management team to attract venture capital funding also failed to bear fruit, due in part to the company’s unwieldy ownership structure, CEO Carl Wegner tells GTR.

“Having a large group of investors without a lead investor makes it hard. It would be the lead investor who would manage the board and manage the round, and we’ve never had that,” he says.

As such, while Contour – which was set up as a standalone legal entity in 2020 – has not yet run out of cash entirely, the company has made the decision to call it quits.

“While we are still running, we would rather close things down earlier than we absolutely need to, so we can make sure everyone’s paid and made whole,” says Wegner. “We have always played at that level and we’re not going to finish owing people money. That’s not right. I want to make sure everyone feels that we closed properly.”

Industry buy-in

Contour started life as Voltron – a prototype trade finance application built on R3’s Corda blockchain platform in mid-2017. Launched a year later at Sibos in Sydney, it then underwent an extensive period of testing by over 80 banks and corporates, with trials in 17 countries and transactions spanning commodities, petrochemicals, energy, metals, retail goods and textiles, before going into full live production in October 2020.

The platform’s central offering is the letter of credit (LC), for which it managed to reduce processing time by as much as 90% during testing, from an average of 10 days to under 24 hours end-to-end. With a steady stream of banks signing up – Japan’s MUFG and South Africa-headquartered Absa CIB came on board as members in August this year – Contour seemed to have sufficient buy-in to make a real difference.

“We didn’t require people to become investors to join, because we wanted to democratise the platform to enable both big and small banks to participate,” Wegner tells GTR. “We did a really good job there: we have nine bank investors and 22 bank members, and the non-investors always felt completely comfortable because we kept that parity where everyone was the same. The commitment was that everyone gets the same price per country, so there was no arbitrage, and you could have competitors in the market. The small banks liked the fact that they could get the same service for their clients as the large global banks.”

Contour also succeeded in bringing onboard corporates across different trading corridors and industries, such as Posco International, South Korea’s largest trading company, which in June this year joined the network to digitise the end-to-end LC settlement process across its ecosystem of more than 80 subsidiaries in sectors including energy, steel, agricultural resources and component materials.

“On our platform, customers were willing to key in the data, because they saw the benefit of that collaborative nature,” says Wegner. “It’s interactive; they can co-draft with their beneficiary and their issuing bank, which saves sending documents back and forth. The feedback we got was that clients and banks loved the interoperability, and you don’t get that with a bilateral application.”

But despite an apparently obvious business case, bringing the cumbersome, paper-based trade system into the digital age has proven to be a more difficult task than many had anticipated.

A growing list of failed initiatives

In recent months, a once-exuberant landscape of collaborative initiatives has become littered with failures, including AP Moller-Maersk and IBM’s TradeLens, a blockchain-based supply chain ecosystem for containerised trade, Marco Polo Network, a consortium built on R3’s Corda that counted more than 30 banks as backers and members, and we.trade, a joint-venture open account platform owned by 12 European banks.

Contour, which bought we.trade’s rulebook following its demise, had positioned itself as “leading the charge” in the consolidation of the trade digitisation space. Plans for the short term included a move into open account trade as well as the launch of an embedded offering that would see a white-labelled version of the solution sit behind banks’ portals – essentially turning it into the “rails” for digitised trade finance.

Nonetheless, although the network achieved success in terms of initial take-up, the current tough environment for trade – and concurrent heightened internal competition for increasingly scarce budget within financial institutions – meant implementing the solution beyond a few trial runs became less of a priority for the banks involved.

“Proofs of concept are always 100% successful. What would be more impressive is someone saying they’d done the 10th transaction or 100th transaction, because that means you’ve actually done something. Commercialisation takes a lot more work and it takes time,” says Wegner.

“Integrating Contour into the back-office system involves cost and resources, and while some banks did it, and this was a trend that was happening, we just needed more time. Given another year, we would have been integrated into four or five more banks, and that would have changed things because Contour would have become the default for them.”

For the time being at least, though, banks seem to be turning away from wholesale, market-wide transformation initiatives in favour of creating their own in-house digital platforms. This approach, Wegner believes, is a mistake.

“This is a huge setback for the industry. Building things by yourself is not going to work. It has never worked before. The industry needs collaborative projects, particularly at a time when trade is becoming increasingly fragmented,” he tells GTR.

Although recent developments such as the entry into force of the UK’s Electronic Trade Documents Act have been hailed as a transformational opportunity to make trade a more modern, digital affair, Wegner calls for a “long-term commitment to commercialisation” to turn potential into reality.

“We are going to have to figure out a way to have the industry work together somehow, and there needs to be some leadership to shepherd everyone into moving in the same direction,” he says.

A glimmer of hope remains

From the end of November, Contour’s users will have to find alternative means to transact, which will likely mean returning to paper and emailed documents. Nonetheless, some hope remains that the network’s vision could yet be realised.

In the memo sent to its members, Contour says that it is “in discussions with other entities” to manage or take over the network, adding that “there may be a potential restart in the future with additional network and features”.

“Personally, I’m trying to find a successful home for the software, the network, and the amazing team of people we’ve built. We’re hoping that we can have some positive news soon, but to be prudent, we’re taking this decision now,” Wegner tells GTR.

The post Exclusive: Contour to shut down as bank shareholders pull funding appeared first on Global Trade Review (GTR).

Corporates will be able to communicate with any Swift-enabled bank in the world, monitor counterparty exposure and manage global bank limits.

“All instructions or messages sent through the portal can be tailored to conform with the message type preferred by the bank in question,” says Elcy’s chief executive, Robin Cohen.

The corporate trade finance portal gives firms more control over their trade finance exposures and cash flow management, while removing the need to connect to multiple different proprietary systems, Finastra and Elcy say.

Cohen tells GTR that discussions have already begun with a number of corporates from Finastra’s existing portfolio of clients.

“We think this is where the growth exists for multibank solutions,” Cohen says, adding that the portal is a way for banks “to enhance their broader relationship with corporates”.

“Elcy brings a wealth of expertise in meeting the trade finance needs of corporates, while Finastra meets the end-to-end digitisation needs of banks focused on international trade and supply chain finance,” adds Jaime Lynn, vice-president, enterprise solutions at Finastra.

The portal is a cloud-based, multi-tenant software-as-a-service solution with centrally managed software upgrades.

The post Finastra, Elcy launch trade finance platform for corporates appeared first on Global Trade Review (GTR).

Founded in 2009, StratumFive provides vessel intelligence to more than 13,000 ships globally. Its central offering is the Podium5 informatics platform, which is aimed at enabling maritime operators to save time and fuel, and reduce emissions. The platform provides fleet monitoring, regulatory compliance, performance analytics and voyage optimisation, including capabilities from FleetWeather, a US-based weather routing and analytics company that StratumFive bought in 2019.

Financial terms of the deal were not disclosed. As part of the acquisition, StratumFive founder Stuart Nicholls and CEO Ross Martin will join Pole Star in newly created leadership positions.

Pole Star says the combination will expand its fleet coverage, as well as complement its PurpleTrac and MDA vessel compliance and tracking solutions with advanced model-based route optimisation.

“We are excited to welcome StratumFive into the Pole Star family,” says Bob Skea, CEO of Pole Star Global. “By joining forces, we are reaffirming our commitment to innovation for our customers. The Podium5 platform not only enhances our capabilities in vital voyage analytics, but also accelerates our efforts with vessel emissions transparency and planning.”

In recent years, Pole Star, which has traditionally focused on sanctions risks within maritime trade, has incorporated a more explicit focus on sustainability into its vessel screening services. In 2021, it bought Vasanda, a London-based technology startup that specialises in sustainability risk assessments of commodity transactions, while in 2020 it partnered with CarbonChain to track individual vessels’ greenhouse gas emissions, warning that some ships’ carbon emissions are five times higher than other similar vessels.

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The IBM Connected Trade Platform, unveiled during the Sibos event in Toronto, is based around an ‘as a service’ business model that integrates capabilities from a range of fintech players into a mix-and-match offering that banks and corporates can consume as a one-stop managed service.

This co-operative ecosystem approach stands in contrast to the more siloed models of we.trade, a blockchain-based platform for open account trade owned by 12 European banks and IBM, which collapsed in June last year after failing to reach scale, and TradeLens, an IBM and Maersk joint venture that struggled to achieve buy-in from the competitive world of containerised trade and closed its doors in November 2022.

The development comes as the remaining trade digitisation projects in the market continue to grapple with incentivising adoption, ensuring a proper product-market fit and creating a sustainable business model.

At Sibos, GTR sat down with Ravesh Lala, IBM’s head of business development for hybrid cloud solutions, to understand the motivation behind the company’s re-entry into the digital trade space and learn more about its attempts to create more successful and resilient initiatives moving forward.

GTR: During your ‘Digitalisation of trade and supply chain finance’ workshop at Sibos, you said IBM is seeking to become the “orchestrator” of trade digitalisation. What does that entail, and why is trade important to IBM?

Lala: IBM might not be the first name that springs to mind when considering trade finance, but many trade finance banks already utilise our software and infrastructure across various IBM businesses.

Trade, as a business process, is perhaps one of the last areas yet to be digitised, and the complexity arises from the variety of stakeholders involved. On one end, you have buyers, and on the other, suppliers, with banks, logistics and insurance firms nestled in between. Each of these entities operates with their distinct processes.

No single bank can unilaterally digitise the entire trade process from end to end since each bank typically focuses on specific segments of the process.

Banks have begun their transformation journey in trade by collaborating with fintechs, but working directly with a small fintech can be quite challenging since they often lack the necessary bandwidth and capacity to engage with banks effectively, primarily due to the lengthy and rigorous certification and compliance processes instituted by the banks.

We have made a significant upfront investment in this area by introducing the IBM Cloud for Financial Services, which is designed explicitly for the financial services sector from the get-go and incorporates all the necessary security, compliance and regulatory obligations that fintechs would need.

When applications are built on our infrastructure, they inherently acquire all its attributes, which is our primary value proposition to fintechs. Secondly, in the realm of trade finance, no single fintech is fully digitising trade from end to end. By uniting various fintechs under a common platform and architecture, an end-to-end digital solution effectively comes into existence.

GTR: This approach of developing an infrastructure upon which others can build applications to digitise trade is not new: R3’s Corda platform has been used in a similar way for initiatives such as Contour, for example. With trade digitisation solutions struggling to achieve scale, what makes your approach different?

Lala: This structure isn’t solely about the infrastructure; it also involves AI, automation, integration and process management, which collectively constitute the operations layer. While each of these are discrete technologies within IBM, think of a scenario where a buyer in Brazil is engaged with 200 suppliers and interacts with two or three different banks. Each bank has its distinct format for receiving invoices from these numerous suppliers, leading to extensive paperwork and complexity.

We have the integration technologies capable of receiving messages from various sources, discerning their destinations, converting them as necessary, and forwarding them to the appropriate banks. This system ensures that banks receive invoices and purchase orders digitally, facilitating a smoother, more streamlined flow of information and paving the way for true digitisation. Working in tandem with significant partners like SAP, this approach allows for the automation of transactions and a more efficient process overall.

We aim for our clients to consume this as a managed service. The key issue here is how to lower the barrier of adoption, considering that no one is prepared to invest US$100mn into trade digitisation anymore and executing individual contracts for each service isn’t feasible.

This is where we at IBM come into play. We are creating a vertically integrated stack for trade finance, utilising the different layers of IBM’s offerings, and presenting this as a managed service to end clients through our consulting arm. By packaging various technologies and services together and offering an end-to-end solution, the cost of adoption for the individual fintech or software vendor is significantly reduced. We can be the front end for all of them.

GTR: Which fintechs are you working with, and what is the business model? Are you investing in these entities?

Lala: We are working with various independent software vendors, including Cleareye, Finastra, Kanexa and TradeSun. These fintechs didn’t initially build their businesses on our platform; they developed their own application stacks, but now that they understand the power of our ecosystem strategy, they are beginning to migrate towards it.

We aren’t taking stakes in these companies. While we might have invested in one or two companies three years ago, it’s not a strategy we’re pursuing actively. These companies collaborate with us because they understand and appreciate our platform and ecosystem strategy. Our focus is not on pushing specific products; instead, we are committed to solving the complexity of trade digitalisation, bringing along an ecosystem of partners to achieve this objective.

Image credit: Swift

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A consignment of valves were shipped from the UK to Singapore using the blockchain platform of supply chain solutions provider LogChain shortly after the UK’s Electronic Trade Documents Act (ETDA) entered force on September 20.

An electronic air waybill was used to ship the goods by Singapore Airlines and  LogChain says it is the first to use a full suite of digital logistics documents such as the purchase order, driver and vehicle checklists, gate in and out receipts, packing lists, security declarations and product paperwork.

“Placing a bill of lading on the blockchain is a commendable feat, but if the hands-on – on-ground and on-site – staff at the heart of our operations are still tethered to manual methods like clipboards, then the essence of a fully digitalised supply chain eludes us,” says Andrew McKeown, LogChain’s CEO.

“We sought to highlight the logistical element, demonstrating the potential for comprehensive digitalisation across the entire spectrum of the supply chain, transcending mere transactional boundaries,” he tells GTR.

While the focus of global reforms to digitise trade paperwork has been on documents of title such as the bill of lading, McKeown says this shipment seeks to achieve the “broader intent of ensuring end-to-end digitalisation in line with the ‘spirit of the agreement’ of the ETDA”.

“To cite an example, warehouse receipts and ship’s delivery orders, while not traditionally recognised as documents of title under common law, have an operational significance attached to their possession. In practice, holding these documents might sometimes be a prerequisite for a party to assert performance of a duty, or to activate certain statutory effects, as seen under statutes like the Sale of Goods Act 1979,” he says.

The shipment was sent from Burnley in the UK by Fort Vale, a valves and fittings manufacturer, to its own facility in Singapore, meaning no buyer or seller was involved.

“A significant number of our key accounts are based in Singapore and as such, the opportunity to be part of this historic moment was something not to miss,” says Graham Blanchard, Fort Vale’s global sales and marketing director.

“Fort Vale sees the benefits of security, efficiency, cost savings and reduced risk of delays as real positives not only for our organisation but as a contribution to frictionless trade between the UK and Singapore as a whole.”

The shipment also included NG Transport, the Woodland Group, BT Rune and EES Freight Services. No financial institution was involved.

Several companies have already performed digital trade transactions, particularly as more countries adopt or reach near adoption of legal reforms to recognise digital versions of key trade documents such as bills of ladings.

Earlier this year Swedish trade tech firm Enigio said it had executed a fully digital trade between Belgium and India, and last month completed what it said was the first digital trade transaction under the ETDA, with Lloyds Bank. Several pilot projects have also been conducted involving parties in Singapore, where equivalent legislation has been in place since early 2021.

“This is the first fully digitalised movement of goods under the UK’s new ETDA, which will transform and simplify the process of exporting from the UK to the world,” says Martin Kent, the UK trade commissioner for Asia Pacific.

“We are already working to expand this pilot across Southeast Asia and we will work with all partners to realise the benefits of paperless trade, which is great for both business efficiency and the environment.”

Kara Owen, the UK high commissioner to Singapore, says the shipment was also enabled by the UK-Singapore Digital Economy Agreement signed in 2022.

A separate consortium collaborated earlier this year on a pilot to test the safety of digital trade documents, namely an electronic bill of lading and promissory note, from hackers using encryption technology provided by Arqit.

Trade between the UK and Singapore is likely to continue to be a test bed for digital documents due to both countries’ status as trade finance hubs and important legal centres for trade contracts and disputes.

The post Post-ETDA shipment puts focus on broader range of trade documents appeared first on Global Trade Review (GTR).

The funders are New York-based fintech Pivot Investment Partners and e& capital, the investment arm of Abu Dhabi-headquartered e&.

The financing will increase product innovation and drive “fundamental shifts in how trade finance operates”, says Sameer Sehgal, Traydstream’s chief executive.

“Our series B funding, besides ratifying the immense progress we’ve made as an automation platform, also allows us to accelerate our pursuit of innovative solutions that facilitate responsible, inclusive and simplified trade for all,” Sehgal tells GTR.

Sehgal says the funding “marks an important milestone” for the company, adding that “we are committed to our goal of actively contributing to a vibrant ecosystem where trade finance is readily accessible and efficiently deployed irrespective of size, segment or geography”.

“With less than 1% of global trade occurring digitally, modernising trade finance represents a massive opportunity,” says Dinkar Jetley, Pivot’s managing partner.

Managing director of e& capital Kushal Shah adds: “Trade is essential to the UAE and the Middle East, and we see a huge opportunity to be able to expand our expertise and reach, making a meaningful impact to the SMEs and corporates in the UAE and around the world.”

In 2021, the fintech raised US$8mn in its series A funding round from institutional and private investors, including AFG Partners, a Hong Kong-based venture capital fund.

Traydstream’s platform digitises and stores trade finance documentation, extracts the data, and checks it against trade and compliance rules, it says.

Earlier this year, it agreed to provide AI-powered document checking for Surecomp’s trade finance platform Rivo.

The post Traydstream raises US$21mn in latest funding round appeared first on Global Trade Review (GTR).

Embedded finance is the art of integrating financial products and services into the core offerings of non-financial companies. Think of it as walking into a bookstore and being able to order a freshly brewed coffee at the same counter where you’re purchasing a captivating new book. Behind the scenes, a separate entity may handle the coffee service, but for the customer, it’s a unified, frictionless experience – a chance to savour a cup of joe while immersing themselves in a literary adventure.

This concept is not entirely novel. Over the years, store cards, car insurance provided by dealerships, and extended warranties for household items have all granted consumers access to financial services alongside their primary purchases. However, recent regulatory changes and technological advancements have ushered in a more sophisticated era of embedded finance. The advent of open banking and the proliferation of application programming interfaces (APIs) have opened the door for companies to seamlessly integrate diverse financial services into their existing offerings.

The growth trajectory of embedded finance is nothing short of remarkable. In 2021 alone, financial services worth a staggering US$2.6tn were embedded into e-commerce and various software platforms. These figures are projected to soar, potentially surpassing US$7tnby 2026, accounting for over 10% of the total transaction value in the US.

Embedded finance takes on various forms, from embedded payments, which expedite online transactions with a simple click, to embedded insurance, investments, and lending. A prime example is the buy now pay later (BNPL) model, where customers are given the flexibility to spread the cost of a purchase over a designated period.

The benefits of embedded finance are a win-win for both companies and their customers. Customers gain access to financial services, such as payments and insurance, without the inconvenience of switching between platforms or dealing with multiple service providers. This translates into enhanced convenience and an elevated customer experience. For businesses, the potential is equally enticing. They can diversify revenue streams, bolster customer loyalty, and streamline the overall customer journey. Moreover, by tapping into a wealth of customer data, companies can offer personalised services, further strengthening their competitive edge.

While the embedded finance phenomenon has predominantly focused on consumer applications, its gaze is now shifting towards the realm of B2B interactions and corporate finance. B2B embedded finance promises to expedite transactions, facilitate financing between trading partners and lower trade barriers. With real-time data harnessing capabilities, companies can optimise processes and access financing solutions seamlessly through B2B platforms. Financial institutions and fintech companies are poised to revolutionise risk assessment, potentially reducing financing costs for businesses. The applications are diverse, encompassing embedding financial services within B2B transactions, streamlining payments, expediting credit decisions and expanding access to working capital.

However, successful implementation hinges on seamless partner connectivity. Taulia, acquired by SAP last year, stands at the forefront, offering embedded working capital tools that trim costs and accelerate liquidity flow. Their deep integration with ERPs ensures accessibility and efficiency while diminishing the risks and expenses associated with manual workflows.

Beyond just enhancing customer journeys, embedded finance revolves around harnessing the wealth of available data. Taulia, for instance, capitalises on invoice data to provide suppliers with more affordable financing options. The greater visibility funders have within Taulia’s platform and ERP, the more confident they become in making financing decisions.

In essence, embedded finance is not only about optimising customer experiences and expanding access to additional services. Concerning trade, it assumes a pivotal role in informing decision-making and democratising access to finance. It heralds an era where convenience and financial empowerment coexist harmoniously, promising to reshape the way we do business and interact with financial services.

Danielle Weinblatt will be present at Eurofinance International Treasury Management in Barcelona from September 27-29.

The post Unleashing the potential of embedded finance: Revolutionising convenience and trade appeared first on Global Trade Review (GTR).

The rebranded entity, now named Kanexa, is setting its sights firmly on the corporate side of the open account equation, in a move away from Marco Polo’s bank-led model. Kanexa’s proposition targets buyers and suppliers looking to automate processes in open account trade, aiming to bridge gaps that delay payments and hinder effective working capital management.

Its core offering is the Open Account Automation product, which uses blockchain and cloud technology to digitally exchange data between buyers and their suppliers, matching against contract terms and resolving discrepancies based on rules and trained patterns. The output is a fully approved, immutable digital asset for every transaction with every supplier, which is then used to execute payment and enable financing.

“We’ve had a number of very large corporates tell us they want their SME suppliers to get paid as fast as they possibly can or have the opportunity to use supplier financing programmes if offered, but that in some cases, they can’t approve invoices for up to 40 days because of discrepancies and reconciliation issues,” Rob Barnes, CEO of Kanexa, told GTR on the sidelines of the Sibos event in Toronto last week.

“Kanexa improves a process that takes days or weeks to minutes or seconds. What this means is the supplier knows when they’re going to get paid, the banks have a compliant invoice that they can finance, and the buyer has cleaner accounts payable processes.”

With a straightforward revenue model that simply charges per matched invoice, the new entity has already gained traction among corporate users. According to Barnes, 90% of Kanexa’s clients are in the retail industry, and the company is now expanding its reach into the food and beverage and consumer packaged goods verticals.

“Some of these companies have a discrepancy rate of over 30%, so fixing that problem is economically material,” he explains. “Our strategy is to go to those customers first, since we can deliver fantastic outcomes that have a tremendous impact on the way they run their business. These are the best customers for us to build upon.”

To ensure it is able to overcome hurdles to reaching scale – the main factor that led to Marco Polo’s downfall – Kanexa has also entered into what Barnes calls a “major partnership” with tech giant IBM to resell to banks and large global corporate customers.

Among banks already signed up is Bank of America, which is using Kanexa to underpin the first module of its newly launched Cashpro Supply Chain Solutions offering. GTR understands that the company is also collaborating with Bank of New York Mellon on a similar solution.

“We’re very focused, we’re very simple. We’re not trying to boil the ocean,” says Barnes. “It’s just solving for a key pain point that is something the corporates are asking for. We’re making things happen faster and we’re taking significant costs out of the process, reducing errors and avoiding any payment leakage.”

This simplicity stands in sharp focus to the original strategy for the Marco Polo Network. Launched in September 2017, Marco Polo sought to revolutionise open account trade finance through blockchain innovation, and signed up more than 30 banks as members. However, progress was slow. The network failed to move into production by the targeted date of early 2019, and a revised go-live date of Q2 2020 was also missed. By Q4 2020 Marco Polo was officially live with two modules: receivables discounting and payment commitments, although adoption of these brand-new trade instruments was limited to a handful of transactions, and the blockchain-based payment commitment was soon shelved.

“At its inception, Marco Polo had a group of banks that were all going to collaborate to reinvent a hybrid between open account and documentary trade. We did that and what we created was really good, but no bank wanted to use it and there was no buy-in, so it was a commercial disaster,” Barnes tells GTR.

After bringing in Jonathan Conway as chief technology officer in October last year, the company pivoted its offering, launching Supplier Pay, a smart matching and payments platform aimed initially at North American retailers and their supplier networks.

“What we learned as we were talking to corporates was that they wanted to solve for reconciliation, discrepancy handling, approvals and payments processing within their supply chain ecosystem. They just needed something that would give them greater synergies between their accounts payable and their suppliers’ accounts receivables to take the costs and errors out of the process,” explains Barnes.

“However, we just ran out of time. It was as simple as that. We ran out of money and we ran out of time.”

In February this year, after a majority of the company’s shareholders passed a resolution to seek a winding-up order, the company entered insolvency proceedings.

“We were fortunate that when we did go into liquidation, we had enough talent and value in the technology that we were picked up by an investment group that understood what we were doing. They spoke to a number of the corporates we were a long way down the line with, and that gave them the confidence to invest in us,” says Barnes.

GTR understands that the investor group is made up of three partners with experience in the open account and factoring space, and does not include any of Marco Polo’s former bank shareholders. Barnes declined to disclose the names of the investors. Alongside Barnes, core members of the former Marco Polo team, including co-founder Richard Tynan, and chief technology officer Conway, have remained on board.

After spending the last six months building the matching and discrepancy management functionality, the company is now integrating its solution into third-party tools such as Slack together with AI to handle human workflow management processes.

“We have now gone back to the roots of being a scrappy startup rather than try to pretend to be something that we’re not,” says Barnes. “We have a good relationship with a number of banks, and the goal is to partner with them to provide more value to their customers.”

“The true value to the corporate is in the open account automation process, where the bank is not involved at all, but the bank will pick up the payment and potentially financing at the end,” he adds. “Still, this is a big change in thinking for banks we are working with, but it is what their corporates are looking for.”

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