Trade Information Network launched by seven banks to transform trade finance
Seven large banks – namely ANZ, Santander, BNP Paribas, Citi, Deutsche Bank, HSBC and Standard Chartered – have unveiled a joint initiative to build a digital “Trade Information Network” by the end of 2018.
The consortium conducted an “extensive selection process” to find a technology provider and selected Canada-based tech heavyweight CGI. CGI’s offering in trade finance is Trade360, a Software-as-a-Service (SaaS) platform that counts ANZ among its largest global users, as well as a number of Canadian banks, such as Scotiabank, BMO and National Bank of Canada.
The pilot version of the network is now complete and CGI will continue to support the development of the Trade Information Network.
Once operational, Trade Information Network will become the first inclusive global multi-bank, multi-corporate network in trade finance, the organisers say. “It has the potential to transform international trade.”
Trade Information Network “aims to address the unmet demand for financing earlier in the supply chain by enabling corporates to easily and securely communicate trade information directly with banks of their choice”, the consortium says.
“To develop a new industry standard in trade finance, the network’s approach has been validated with extensive corporate and bank engagement. In addition to the founding banks, more than 20 additional banks from around the world are actively participating in developing the network and several corporates have already expressed an interest in participating in pilots,” it adds.
This is how it will work:
Corporates will be able to submit and verify purchase orders and invoices to request trade financing from the banks of their choice. By providing those banks with access to trusted trade information, the network will help to mitigate the risk of double financing and fraudulent trade information across the industry. This enables the relevant banks to better assess risks and provide trade financing earlier in the supply chain, including for small and medium-sized enterprises who have traditionally experienced difficulty in accessing trade finance. Banks will provide financing outside of the network using their existing systems.
The network has open architecture and standardised connectivity based on a governance model similar to Swift to achieve maximum adoption across the supply chain ecosystem.
Corporates will use a simple one-time registration process which will allow them to connect with all banks on the network.