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Could regtech bridge the trade finance gap in emerging economies?

By Sanne Wass

New technologies such as machine learning and blockchain could help solve the de-risking problem among banks globally and widen access to trade finance in emerging markets.

That’s according to a new study by Centre for Global Development, which assesses six new regulatory technologies – machine learning, biometrics, big data, know your customer (KYC) utilities, blockchain and legal entity identifiers (LEIs) – and their potential to address the de-risking problem.

De-risking has hit many emerging economies since the financial crisis. Amid fears of heavy penalties for breaching anti-money laundering (AML) regulations, the rising costs of conducting the requisite due diligence and the lack of confidence in the respondent banks’ risk control, financial institutions, particularly in the US and Europe, have pulled back from what they consider to be high-risk markets.

According to research by Accuity, a provider of compliance software that helps banks to reduce exposure to AML risk, the number of worldwide correspondent banking relationships, which are critical to cross-border financial transactions, has been in steady decline from 2009 to 2016, falling by 25% overall.

De-risking has had unintentional and costly consequences, especially in Africa, Central and Eastern Europe, and Asia Pacific. Among the biggest losers are small businesses that can’t access working capital or trade finance. As correspondents depart, they’ve left holes in the funding space, cutting credit lines and withdrawing finance.

The African Development Bank (AfDB) now estimates unmet demand for bank-intermediated trade finance of between US$110bn and US$120bn in Africa. De-risking is one factor behind the problem.

“Some policies that have been put in place to counter financial crimes have unfortunately had a chilling effect on banks’ willingness to do business in markets perceived to be risky – in part due to the high price of compliance,” says Vijaya Ramachandran, senior fellow at the Centre for Global Development and one of the study’s authors.

But, pointing to the new study, he says “regtech may be the solution to some de-risking woes”.

“What we’re seeing is that even as these policies are having an impact, financial institutions are coming up with solutions in the form of new cutting-edge technologies to help them comply better and faster with AML regulations,” Ramachandran says.

KYC utilities, for example, can reduce the amount of time correspondent banks spend on repetitive due diligence processes. Blockchain can improve the KYC data storage security.

Big data and machine learning can enhance correspondent banks’ ability to assess and manage risk through more sophisticated customer typologies and more accurate transaction monitoring. And biometrics can enable faster and more assured identification of individuals.

Over time, the study concludes, these technologies may alleviate some of the pressures on banks and “make holding correspondent banking accounts with clients in poor countries more likely”.

This enthusiasm about regtech is not new: GTR has previously reported on ways regtech can help the industry optimise compliance – a task that is still largely dominated by manual and mundane processes. A recent study found that banks could save £2.7bn a year by adopting machine learning and big data technology in their AML systems.

However, the argument that new regtech like machine learning and blockchain will bring banks back to de-risked markets is met with scepticism elsewhere in the industry.

“I don’t think technology is going to solve the problem. It’s a people’s, education and timing issue,” says Sean Norris, head of sales at Accuity.

He points to the fact that many of the de-risked countries, mentioning the likes of Afghanistan, Malaysia, Indonesia and Vietnam as examples, “haven’t got processes right for very basic things yet” and are still “far behind” when it comes to prioritising and implementing the Financial Action Task Force (FATF)’s guidelines and best practices for AML.

“When you’ve got a bank in Jakarta that is still relying of self-declaration of a person in a KYC process, how is that going to be acceptable for a western bank? I don’t think technology is going to solve a behavioural problem and different attitudes to AML controls,” he says.

Norris doesn’t deny the power of technology – after all, Accuity itself is a provider of AML software and is also exploring the use of machine learning to minimise the number of false positives. He also argues that de-risking is in fact driving the acquisition of better technologies by banks in Africa and Asia to upgrade their AML processes.

For example, more banks are looking to adopt Accuity’s sanctions screening solution to demonstrate that they are able to meet global standards of compliance and improve their ability to strike up new business relationships with financial institutions around the world.

But talking about the adoption of artificial intelligence and blockchain within banks in de-risked regions is “a stretch”, he argues, adding that the technologies being adopted are those that “have been around for a long time”.

“It’s really just to comply with the core aspects of AML,” he says. “Sanctions screening, for example, is something that England and the developed markets have been doing for the last decade, which they have now started to implement or operate in the emerging markets.”

New or old technologies, the industry may have to wait a bit longer to see the positive impact on the de-risking problem. But one thing is certain: those banks who take AML seriously have the best chance of re-establishing their broken relationship, Norris explains.

“The western banks are going to be a lot more comfortable when the banks are taking this seriously,” he says. “Compliance should never be a competitive sport, but when you’re talking about de-risking in these emerging markets, a lot of them are over-banked and so it becomes really hard for western banks to pick the right partner. They are going to pick the partner that is taking it seriously.”

Read the full study Fixing AML: Can New Technology Help Address the De-risking Dilemma?

The post Could regtech bridge the trade finance gap in emerging economies? appeared first on Global Trade Review (GTR).

Evergreen goes paperless as first shipping line to adopt Bolero’s e-bill of lading

By Sanne Wass

Evergreen Line has partnered with Bolero International to offer paperless bill of lading and dispatch documentation via its ShipmentLink portal.

The new partnership makes Evergreen Line the first container carrier to integrate with Bolero’s e-bill of lading (eBL) solution.

The two new services will “enhance connectivity for exporters and importers with banks, insurers, regulators, customs and port authorities” and “lower shippers’ costs while making data transfer more accurate, efficient, reliable and secure”, according to the two companies.

The e-bill of lading (eBL) application allows carriers to create, send and manage bills of lading digitally, which will lead to a more rapid issuance and transmission. This is particularly important for short-sea shipments, where a paper-based bill of lading sometimes arrives later than the vessel, making it difficult for importers to pick up cargo on a timely basis.

Going paperless also allows reviews and amendments to be carried out online, and speeds up cash flow by avoiding delays that often come with paper-based documents. With eBL, carriers will be able to release goods far quicker, thus speeding the payment process to shippers.

In addition to the eBL service, the new electronic dispatch function allows the exchange of a wide range of shipping documentation, including packing lists, commercial invoices, certificates of origin and other customs-related credentials, licences and inspection reports.

Putting everything online, the shipping firm seeks to prevent documents being lost in transit or fraudulently copied, and it enables the transmission to be done in an encrypted form when necessary.

Ian Kerr, Bolero’s CEO, says the partnership will “help transform” the shipping industry.

“Bolero’s eBL platform has already been proven in bulk cargo trades and initial container-based transactions by corporates such as Cargill, BHP Billiton and Reliance Industries, but now with Evergreen we are taking a very significant next step in the digitisation of world trade by putting our technology at the disposal of a wider community of container shippers and NVOCCs,” he says.

While companies worldwide have long been looking at ways to automate their business, shipping continues to be an industry largely dominated by manual, time-consuming, paper-based processes. In response to the urgent need for digitisation, platforms like Bolero and EssDocs have emerged to help electronify trade documents or remove paper from the process altogether.

Other shipping companies are taking a different approach, utilising new technologies to build their own platforms from scratch.

Maersk Line, for one, announced a joint venture with IBM in January, which will release a blockchain-powered digital platform for use by the entire global shipping ecosystem. It will utilise distributed ledger technology to give large networks of disparate trading partners – including manufacturers, shipping lines, freight forwarders, port and terminal operators, shippers and customs authorities – a single shared, immutable, real-time view of a transaction.

The joint venture is soon due to release two capabilities, one of which will go under the name “paperless trade” and will digitise and automate paperwork filings through smart contracts. The platform will also employ other cloud-based technologies such as artificial intelligence (AI), the internet of things (IoT) and analytics to help companies move and track goods digitally.

Meanwhile, Bolero itself is also looking at how to redesign its eBL service using blockchain technology, following the signing of a memorandum of understanding with fintech consortium R3 in October.

The post Evergreen goes paperless as first shipping line to adopt Bolero’s e-bill of lading appeared first on Global Trade Review (GTR).

OpenText and BlockEx to build supply chain finance blockchain platform

One of the world’s largest business networks has teamed up with a fintech startup to develop a blockchain-powered marketplace for supply chain finance.

OpenText, a Canadian firm that operates a business network of more than 600,000 companies, has partnered with UK-based BlockEx, a provider of a blockchain-based digital asset exchange, to explore the use of blockchain technology across the supply chains of the OpenText network and how it can help facilitate firms’ access to finance.

“Our partnership allows some of the world’s largest supply chains to simply opt-in to blockchain-based trade finance,” says Adam Leonard, CEO of BlockEx, calling the move “truly exciting”.

Also commenting on the new partnership in a blog post, Mark Morley, who is director of strategic product marketing for business network at OpenText, says the two parties will jointly develop solutions to provide increased visibility of the end-to-end supply chain information flow, which can help lenders monitor supply chain events, such as disruptions or late delivery of shipments, to evaluate vendor risk more effectively. Lenders will also be able to identify when assets have been pledged as well as extend their offering to pre-delivery financing. Finally, a blockchain-based solution can prevent fraudulent invoices from entering the supply chain.

“Blockchain is ideal for traceability use cases within the supply chain, especially where raw materials need to be tracked from source to final destination,” Morley writes. “Born out of the financial services sector, blockchain stands to transform the way in which companies engage with trading partners across a supply chain.”

As previously reported by GTR, blockchain is well suited for tracking and tracing the physical supply chain. The technology ensures that records cannot be duplicated, manipulated or faked, and because it allows data to be entered, shared and viewed across the supply chain, the goods’ journey from farm to plate is immediately visible and transparent to all parties. Some fascinating developments are already underway, including projects that use blockchain technology to trace diamonds, wine, coffee beans, cotton, avocados and fish.

The ability to monitor goods securely also makes blockchain technology ideal for managing the end-to-end supply chain finance process.

“Supply chain finance is a great use case for blockchain as the process needs to effectively manage the orchestration of transactions between buyers, suppliers and lenders, as well as other businesses such as third-party logistics carriers involved with shipping goods across the supply chain,” Morley continues. “It brings a new level of transparency to supply chain processes, something that lenders have typically struggled to achieve to date, especially for shipments moving across multiple country borders.”

BlockEx’s platform allows for digital asset creation, issuance and trading. The startup works with trading firms, institutions and governments, providing bespoke blockchain implementations and proof of concepts.

The post OpenText and BlockEx to build supply chain finance blockchain platform appeared first on Global Trade Review (GTR).

Hong Kong and Singapore Join Forces Over Fintech

By Darren Boey and Alfred Liu

25 October 2017 – Hong Kong and Singapore, which have vied for supremacy as financial technology hubs over the past couple of years, have now decided to join forces.

The cities’ central banks have signed a fintech cooperation agreement that will foster collaboration on business referrals, joint innovation projects, information sharing and the exchange of expertise, Norman Chan, chief executive of the Hong Kong Monetary Authority said Wednesday. The first joint project will be on trade finance, Chan said in a speech to open the HKMA Fintech Day.

Financial technology has added a new dimension to the decades-old tussle between Singapore and Hong Kong for the position as Asia’s premier financial center, with both cities throwing hundreds of millions of dollars to help fund startups and build ecosystems conducive to innovation.

“Traditionally as a financial center, there’s that comparison between Singapore and Hong Kong,” Roy Teo, head of the Monetary Authority of Singapore’s Financial Centre Development Department, said in a panel discussion at the event. “But when it comes to fintech, this is where we recognize that there’s a lot of need for collaboration between the regulators.”

The HKMA event is part of the Hong Kong Fintech Week, which organizers say is expected to attract more than 3,000 executives. Singapore holds its fintech festival on Nov. 13-17. Last year, both cities held similar conferences within a week of each other.

Chan said the regulators were in talks on cross-border infrastructure to connect the Hong Kong Trade Finance Platform with a similar structure in the Southeast Asian city. Seven banks in Hong Kong have signed on to the HKTFP — an HKMA-led initiative based on distributed-ledger technology — to digitize and share trade documents, automate processes and reduce risks and fraud, Chan said. He didn’t name the banks.

“Technology is a game changer for the future of banking and payment services,” Chan said. “It will differentiate winners from losers.”

Fintech investments in Asia are poised to set a fresh record this year, according to a CB Insights report released this month. Venture capital-backed startups raised more than $5 billion in 2017 through September, closing in on last year’s $6.3 billion, data from the research firm show.
Hong Kong Chief Executive Carrie Lam pledged several initiatives to boost the city’s innovation and technology sector in her policy address this month, including HK$2 billion ($256 million) to co-invest with venture capital funds in local technology startups.

Chan also unveiled fintech initiatives with the Office of Financial Development Service of Shenzhen in southern China, including a talent development program and a HK$7 million award for the development of “outstanding fintech products and solutions” for financial institutions in both cities.

— With assistance by Fion Li

This article first appeared on Bloomberg News.

MarketInvoice inks deal with Germany’s Varengold Bank

Business finance company MarketInvoice has signed an agreement with Varengold Bank AG to provide £45m funding annually on its invoice finance platform. This will fund working capital solutions for businesses across the UK.

20 September – Overall, sums advanced to UK businesses from institutional investors via MarketInvoice have increased more than 4-fold since 2014 from £27.8m to £116.3m in 2017. Cumulative funding from institutions stands at £296.2m which represents a quarter (26%) of the total funds advanced to UK businesses.

MarketInvoice has today reached the landmark milestone of providing £1.5b funding to UK businesses. The first £1b was achieved after 5 years of trading in December 2016 and just 10 months later, the company has reached £1.5b. Supporting 18,700 jobs at the businesses MarketInvoice serves, over 70,000 invoices have been funded to help ease cash flow and become an enabler for growth and expansion.

August 2017 was a record funding month at MarketInvoice since it launched. £74.1m worth of invoices were funded to businesses across the UK, a 109.4% increase on August 2016 (£35.4m).

The recent increase in interest from global institutions and rise in funding levels has come since the launch of MarketInvoice Pro and mirrors the up-take of the product by UK businesses. MarketInvoice Pro is a confidential invoice discounting facility, launched earlier this year, offering businesses a funding line against their outstanding invoices. This product upgrades the MarketInvoice offer from its long-standing invoice-by-invoice product called Select.

Dan Walker, Head of London Office, of Varengold Bank AG commented: “We have been looking at the fintech sector for some time. MarketInvoice and its peer-to-peer invoice finance platform presented a fitting opportunity for us. In particular, we were attracted by their products, approach to risk management and ambition for growth.”

Anil Stocker, CEO and co-founder of MarketInvoice said: “Institutions have played a significant role in our growth story and over the past few years. This commitment from Varengold is further proof of our ability to provide finance to high growth businesses across the country, we’re excited by their support of our mission.”

“We look forward to building on this relationship as we scale into larger funding lines through our new MarketInvoice Pro product. I’m sure we’ll see many more examples of this type of collaboration in the coming months.”

On reaching the £1.5b milestone, Anil Stocker added: “Our whole team is proud to be supporting the back-bone of the British economy – businesses doing great work in media, technology, design, construction, manufacturing, education, and many more. This is a huge milestone for us as a funding platform. We started the company to provide businesses with choice, flexibility and an easy-to-use funding solution. Companies have been able to access funding from £10,000 to £3 million against invoices, to fund their working capital, which is vital to the success of small companies dealing with growing orders and long payment terms. This funding has supported fast growing companies to launch new products, hire more staff, and export to new markets.”

MarketInvoice’s main strategic ambition is to broaden its reach to be able to support a wider range of businesses, from start-ups to larger businesses looking to scale up. The company aims to help even more companies get paid faster by financing their invoices, so business owners can save time and focus on running their business.

Source: MarketInvoice

FMO and above & beyond launch Fintech platform for African Banks to accelerate financial inclusion

The Hague, 18 September 2017 – FMO, the Dutch Development Bank, together with Miami based Fintech and digital transformation strategists above & beyond (a&b), today launch “ FinForward”, a marketplace where Fintech companies, Financial Institutions (FIs) and Mobile Money Providers (MMPs) in Africa are matched. After matching, they enter a testing environment where the banks and Fintechs can test and integrate new financial technology solutions in a safe and secure manner.

The objective of the new platform is to accelerate the digitization of the financial industry in Africa by supporting innovation of the core business with digital solutions. The matching and integration tool will make global Fintech companies accessible and top-of-mind to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs. FMO‘s Andrew Shaw, Senior Fintech Specialist, “We feel that the Fintech conversation is less about who is the disruptor and who is the incumbent, and more about the ecosystem and new partnerships and alliances. We want to stimulate collaboration where it makes commercial sense, and where we can improve financial inclusion.”
“FinForward is one of a kind initiative that facilitates collaboration between Financial Institutions, Mobile Money Providers and Fintech companies. We are building a thriving interconnected global ecosystem integrated through one single platform”, added Jorge Ruiz, Co-Founder & CEO, above & beyond tech.

Fintech as a game changer for emerging markets – reaching the unbanked 

African financial institutions recognize Fintech as a game changer that allows them to increase efficiency and expand their client/product base. However, they admit that they have difficulties finding, choosing, testing and implementing Fintech companies and their solutions.
The high demand for financial services in emerging markets provides a large market opportunity for innovative Fintechs using new financial technology such as block chain, data analytics, artificial intelligence and new distribution systems such as online, mobile and agent networks.

Fintechs for emerging markets are active in areas such as balance sheet lending, platform lending, payment solutions, software-as-a-service (SaaS), digital field applications, alternative credit scoring, predictive data analytics and transaction verification via block chain.

FinForward, a 9-month program

The 9-month program aims to link Fintechs worldwide with financial institutions in Africa. How does it work?

–  Outreach – Banks, Mobile Money Providers and Fintechs are invited to join

–  Fintech Opportunity Scan – Participating banks and mobile money providers define their problems and needs

–  Matching – Pairing of Fintechs based on problem definition

–  Acceleration & Integration – Testing of Fintech solutions in a sandbox and integrating the technology into the bank’s operations

–  Showcase – demonstrate success during showcase days

About FMO

FMO is the Dutch development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development, and has a more than 45-year proven track record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.0 billion spanning over 92 countries, FMO is one of the larger bilateral private sector developments banks globally. For more information, please visit

Access World to build a 3PL facility in Jebel Ali Free Zone

Access World Logistics L.L.C., a joint-venture between U.A.E. based Rais Hassan Saadi (RHS) Group and Switzerland-headquartered Access World Group (Access World) organized a ground-breaking ceremony at the site of their upcoming 3rd party logistics facility at Jebel Ali Free Zone.

The event was graced by Mr. Mohammed Al Muallem, Senior Vice President & Managing Director – DP World UAE Region and CEO – JAFZA, Mr. Asim Al Abbasi, CFO – JAFZA, Mr. Abdulla Bin Damithan, Director Commercial – DP World UAE Region, Ms. Madiha Salem, Director EHS – Trakhees, other officials from various authorities, key clients, service providers and leaders from the shipping & logistics fraternity.

Mr. Saleem Al Rais, Director – RHS Group, Mr. Peter M. Waszkis – CEO Access World, Mr. Peter Barnhoorn, Director – Access World Logistics L.L.C. and other distinguished members from the RHS Group as well as Access World were also present at the event.

During the welcome address, Mr. Waszkis said, “our vision is to deliver value to all our stakeholders by providing comprehensive logistics solutions in a competitive, safe and friendly environment”.

The multi-product warehousing facility scheduled to be commissioned during 2nd Quarter 2018, is being constructed at a strategically located plot of 40,000m2, with an overall investment in excess of AED40million, and shall include a contemporary warehouse of 15,000m2 with an apex height of 13.7 metres & eaves height of 11.5 metres; split into 3 chambers offering bulk-stowage and ambient-temperature as well as air-conditioned (at 220 C) storage with Very Narrow Aisle (VNA) racking systems. The logistics centre, which is expected to meet its power requirement largely through a roof-top solar-panel system, shall also have an open-storage yard of about 6,500m2; a road-weighbridge, ancillary facilities as well as an office block.

Recognized by leading Commodity Exchanges such as the London Metal Exchange (LME) and COMEX, besides global trade-finance institutions, producers, traders and consumers,   Access World ( operate a network of over 100 warehouses in more than 25 locations encompassing Europe & Middle East, the Americas, Africa and Asia, providing a range of services, including but not limited to cargo-handling, storage, freight-forwarding, customs-clearance, weighing, re-packing / processing and collateral management for commodities, and a wide range of general goods.

Formerly known as Pacorini Metals and operating in the U.A.E. since 2001, Access World are a subsidiary of the London Stock Exchange listed Glencore (
Founded in 1910, the Rais Hassan Saadi Group rank amongst the leading commercial enterprises in Dubai, with interests in ship agency, freight forwarding, NVOCC, , logistics,  warehousing & Bonded CFS, insurance, travel & tourism, trading, real estate and oil field support services. The RHS Group has an excellent network of own offices and agents in the Gulf countries, the Indian sub-continent and East Africa.

Mr. Kishore Natarajan, General Manager – Access World Logistics L.L.C. added that the upcoming facility shall be listed with the LME, DGCX and in addition to non-ferrous metals, steel, OCTG, polymers,  other industrial goods, the company shall provide efficient logistics solutions for soft commodities, FMCG / retail products, machinery & spares, project and general cargo.

The press release article Access World to build a 3PL facility in Jebel Ali Free Zone first appeared on Dubai News.


Singapore’s National Trade Platform wins international award

SINGAPORE: The National Trade Platform, a trade information management platform currently being developed in Singapore, has won in the e-business category of the World Summit on Information Society (WSIS) Prizes 2017.

The project is led by Singapore Customs and the Government Technology Agency, and the win represents the first digital initiative by the country to win in any of the 18 categories at the annual WSIS Prizes since these prizes were first introduced in 2012, according to a joint press release by the two agencies on Wednesday (Jun 14).

The NTP will replace the existing TradeNet and TradeXchange systems, and aims to support companies in the trade and logistics industry and adjacent sectors such as trade finance. It will be progressively rolled out from end-2017, the press release said.

The WSIS Prizes recognise digital projects worldwide which foster socio-economic development across categories such as e-government, e-environment, e-science and media, Singapore Customs and GovTech said in a joint news release on Wednesday. The winners were announced at the annual WSIS Forum in Geneva, Switzerland.

The project, named the National Trade Platform (NTP), will replace two current systems. Currently being developed, it will also support companies in the trade finance sector and will be progressively rolled out from end-2017, the release stated.

“The NTP will help businesses to streamline work processes, reduce inefficiencies of manual trade document exchange, and leverage data analytics for insights from their trade data, so as to be well-equipped for the digital economy,” according to the release.

This is the first time a Singaporean digital initiative has taken home an accolade from WSIS Prizes. The NTP beat four other projects to come tops in their category.

The article Singapore’s National Trade Platform wins international award was sourced from Channel News Asia.

Fintech startup brings blockchain and cryptocurrencies to invoice finance

New fintech startup Populous is introducing smart contracts, blockchain technology and digital tokens to the invoice financing space.

Having raised more than US$10mn in crowdfunding in just five days, the company has now started piloting its new platform, which lets firms and individuals sell or buy invoices globally.

The early support has been overwhelming, Populous’ founder and CEO Stephen Williams tells GTR. “We’ve been getting a lot of interest from other invoice factoring firms and financial firms that are not on the blockchain, wanting to join the project, including banks as well,” he says.

The platform is much like a conventional invoice marketplace, but the underlying blockchain technology brings a range of advantages, such as cheaper transaction fees, more efficient and faster processing, as well as improved transparency and security.

Williams says the startup aims to lower the barriers to entry for investors, allowing for far more accessibility to the invoice finance market. And with lower costs, it will bring increased liquidity to companies looking for financing.

Built on Ethereum, the platform takes advantage of smart contracts and a decentralised network, but none of its operations use or rely on cryptocurrencies like bitcoin or Ethereum’s value token ether, which are often described as volatile. Instead, it uses Populous’ custom stable tokens – called Pokens – being stable in that they are pegged with fiat currencies around the world (although they can also be bought with other cryptocurrencies).

“With the smart contract, we have created our own tokens, our own currency in a sense, which the contracts accept,” Williams says. “For example, a guy from India wants to finance an invoice from Sweden, so he would place his money into the platform, and it will get converted into kroner Pokens via the smart contract.”

When an auction is live, investors can bid on an invoice within a timeframe of 24 hours. Their tokens are held in the smart contract until the auction has concluded, after which the contract executes itself depending on the pre-defined criteria, and the invoice seller automatically receives his tokens. These can again be redeemed in any fiat or cryptocurrency.

The whole process, however, isn’t completely autonomous, as the platform administrator still needs to carry out know your customer checks, and approve and manage clients’ accounts and actions.

The use of stable digital tokens, Williams says, is more straightforward, quicker and cheaper than conventional methods, especially for cross-border activities.

“If you think about the complexity around different currencies and settlements and consolidation of payments, it’s a much more efficient strategy to use tokens, and it opens up the market to the rest of the world,” he explains.


Initial coin offering

Having lined up clients, Populous started piloting its platform this week and will release the beta version in November, before going live in January next year.

The final steps were made possible after having received an unexpected level of support as the company was about to launch an initial coin offering (ICO).

An ICO is an alternative way for a startup to raise funds – as opposed to seeking investments from venture capitalists or banks – by issuing digital tokens. It is similar to an initial public offering (IPO) in that a stake of the company is sold to finance new projects, but in an ICO it is – like a crowdfunding process – open to any supporters keen to invest, and funds are typically raised in cryptocurrencies like bitcoin or ether.

Early backers are usually motivated by a prospective return on their investment, as a startup’s success would often translate into a higher token value.

In Populous’ example, US$10mn+ was raised in ether by issuing so-called platform tokens – these are different from Pokens and are classified more as an asset. While Populous had announced it would issue these asset tokens in an ICO on July 16, it never got that far. Having initiated a pre-ICO a week earlier – in which the token was first offered to a limited number of potential backers – Populous sold out after just five days.

Williams says most investors were high-net-worth-individuals, who were especially keen on the innovative approach to traditional invoice financing. “A lot of the people have not invested in cryptocurrencies before and haven’t participated in any ICO before,” he says.

Ultimately, the big beneficiaries are the invoice sellers, primarily SMEs around the world, who will soon have yet another way to improve their cash flow, now with blockchain and digital money.

The post Fintech startup brings blockchain and cryptocurrencies to invoice finance appeared first on Global Trade Review (GTR).

SME international payment platform launched

Payments provider WorldFirst has launched World Account, a platform allowing small businesses and online sellers to open local bank accounts around the world and make international payments.

Presented as an alternative to UK banks’ international business banking services, the platform will be available in the UK and Europe on limited release in Q3 2017, online and through a mobile app, with additional functionality currencies expected to be added later this year.

It aims to help SMEs manage their cross-border payments by opening multi-currency (British pound, euro and US dollar) bank accounts at no cost in the various countries where they do business, therefore reducing foreign exchange expenses.

Jonathan Quin, co-founder and CEO at WorldFirst, says: “Our research shows that over 1.5 million SMEs are trading more than £78bn a month across international borders. This is a significant contribution to the UK economy. It’s time that small and medium-sized businesses enjoyed the same products, price and service that was only previously available to big businesses.”

“Our World Account should solve what is a pain point for many ambitious businesses who buy or sell internationally enabling them to manage their international accounts in one single platform wherever and whenever they want. We think this will be the world’s most flexible financial platform to support a new era of international business.”

The post SME international payment platform launched appeared first on Global Trade Review (GTR).

New partnership to expand alternative financing for African SMEs

African Capital Investments (ACI) and the African-focused asset manager Barak Fund Management have entered into a strategic partnership to expand their financing offerings for African SMEs.

ACI is a boutique merchant bank that helps raise equity capital for African companies, with offices in London, Dubai and Cape Town. Since being founded in 2013 it has closed over 14 individual transactions, resulting in more than US$300mn of investment into Africa.

Barak Fund Management, based in Mauritius and Johannesburg, manages a portfolio of six funds, which over the past eight years has expanded from short-term trade finance to the longer-term asset-backed lending space to fill the funding gap left my Africa’s commercial banks.

The new alliance will see the two parties co-locate in their representative offices in London and Johannesburg to collaborate on projects that can leverage Barak’s lending expertise and ACI’s equity know-how to offer a wider suite of services to their respective clients.

“ACI has built a sterling reputation in the African advisory world,” says Barak founder Jean Craven. “We want to leverage ACI’s expertise, origination capabilities and UK presence to achieve our goal of becoming a multi-billion-dollar asset manager in the next five years.”

ACI founder Rob Hersov adds that the collaboration kicks off a “new chapter in ACI’s story”.

“Barak’s track record speaks volumes,” he says. “They offer a creative approach to lending and provide African entrepreneurs with a viable and fast-moving alternative to commercial bank debt. Together, ACI and Barak will offer a suite of services that will give us an edge over the competition.”

The post New partnership to expand alternative financing for African SMEs appeared first on Global Trade Review (GTR).

Banks pull together for SME blockchain platform

Seven European banks have come together to develop a shared platform that aims to make domestic and cross-border commerce easier for European SME businesses through the use of distributed ledger technology (DLT).

Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit signed a memorandum of understanding (MoU) to collaborate on the development and commercialisation of the platform, to be called Digital Trade Chain (DTC).

The platform is based on a prototype trade finance and supply chain solution originally developed by Belgian bank KBC, that GTR has learnt is built on an Ethereum system.

“During a workshop organised by KBC with SMEs some years ago, we learned that SM’s could not be helped with the traditional trade finance products for mitigating their risk on the counterparty, or getting appropriate working capital solutions for their business needs,” a spokesperson for KBC tells GTR.

“That’s how we came to DTC: we saw the potential benefits to offer appropriate solutions for SMEs in Belgium.”

DTC, which is focused on open account transactions between SMEs across Europe, is intended to connect the parties involved in a trade transaction – the buyer, buyer’s bank, seller, seller’s bank and transporter – online and via mobile devices. It aims to simplify trade finance processes for SMEs by addressing the challenge of managing, tracking and securing domestic and international trade transactions.

KBC has so far spent around four months on development work and run some trials with customers, but declined to reveal any more details subject to confidentiality. By partnering with other banks and forming the consortium, KBC hopes to scale up the offering and make it pan-European.

“We are trying to create a trading community were we have an authorised network so that customers can initiate transactions online through mobile devices. The idea is to track every stage of this open account transaction all the way through to payment notification in order to accelerate the order to settlement process,” head of global trade and receivables finance at HSBC, Andrew Betts, tells GTR.

“In order to make it effective and to make it work we need to scale it within the industry and the SME population across Europe. We have taken proprietary technology from KBC and have shared it across the consortium and are integrating it into our systems and procedures in order to create a truly pan European proposition.”

The consortium aims to have solid case studies and testing completed within the year. The initiative is currently co-owned by all seven banks. Management and maintenance of it, along with the decision on whether it will stay on an Ethereum base, will all be up for discussion through the course of the year as the project progresses.

The post Banks pull together for SME blockchain platform appeared first on Global Trade Review (GTR).

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