(18 October 2018 – Global) The Trade Information Network is a platform being developed by several of the world’s largest banks to cover an unaddressed $1.5 trillion gap in the coverage of global trade finance.
ANZ, Banco Santander, BNP Paribas, Citi, Deutsche Bank, HSBC and Standard Chartered will co-operate on the project.
The digital platform would give access to all banks and corporations to directly exchange and verify trade information in the hopes of lowering risks, and the cost, of financing small companies currently ignored by large banks.
“What this platform will do is allow our clients to connect and provide information on to that network, and to make it much cheaper and effective to deal with our own clients,” said Michael Vrontamitis, head of trade in Europe and the Americas at Standard Chartered. It would also enable the banks to take on new clients Mr Vrontamitis added.
The system plans to allow trading companies to submit purchase orders and invoices to request trade financing from banks. The information can be verified within the system and will help banks better assess the risks of double financing and fraudulent trade. This can help lower the cost of taking on clients and help banks accept smaller companies.
The addition of companies left out of the formal banking sector is projected to be lucrative for the banks with the Asian Development Bank estimating a $1.5 trillion shortfall in trade financing.
Unlike many of its competitors in digital trade finance platforms, the Trade Information Network will not use distributed ledger technology however it would be able to connect to other, blockchain-based platforms.