For the deal in question, HSBC India and ING Bank Brussels successfully executed a blockchain-enabled Letter of Credit (LC) transaction between the India-based conglomerate Reliance Industries (RIL) and Tricon Energy USA, a global leader in the distribution of petrochemical derivatives. The end-to-end transaction was completed on R3’s Corda blockchain platform, slashing the amount of time when compared with conventional paper-based processes. It involved a single shared application, rather than requiring multiple isolated digital systems across various counterparties, located around the globe.

This is an important first for the industry, as the Corda platform integrates Bolero’s eBL solution for the issuance and management of eBLs. This allowed title to the goods in this transaction to transfer digitally from Reliance (the seller) to Tricon (the buyer), with full visibility to the banks, enabling the underlying trade to be fully digitised.

The transaction is one of the first fruits of Bolero’s partnership with R3, the enterprise software firm with a goal to deliver new, easy ways of connecting supply chain participants, simplifying and advancing digitisation trade documents.

In its partnership with R3, Bolero is extending the reach of its eBL Title Registry based solution across the supply chain by developing an oracle on Corda, which enables carriers to connect with corporates and other supply chain participants. Relevant parties will be able to endorse and verify an eBL’s title without needing to revert to paper.

The success of this RIL/Tricon Energy transaction is a major step forward as we continue to focus on industry collaboration and interoperability right across global trade. This is allowing us to fulfil our mission to make trade safer, smarter and faster , delivering major efficiency gains for all our banking, corporate and supply chain customers.

Save

The post Bolero’s vital role in a ground-breaking international trade transaction using blockchain appeared first on Bolero (WiseTech Global Group).

Natural calamities such as the current COVID-19 coronavirus demonstrate how reliance on paper trade documentation continues to expose the global supply chain to disruption.

The International Chamber of Shipping estimates COVID-19 is costing the industry $350 million each week. Container spot rates are down, and idle capacity in the world fleet on the increase, while boxes stack up on Chinese quaysides. The impact of the virus has caused some carmakers to suspend operations and there are warnings of falls in Apple smartphone production.

Adverse events such as COVID-19 almost always have complex ramifications for international trade. However, digital technology has now given us the means of alleviating many of the problems – especially in relation to the paperwork that is essential to export/import transactions.

The electronic transfer of critical documents such as bills of lading, letters of credit and letters of indemnity in digital format delivers huge advantages. Think about what happens to paper documents. They have to be couriered either by people using land or air transport crossing physical borders. If there are restrictions in travel and the movement of people  (as there is in China and South Korea)  in force to prevent the spread of infection, then documents stay put and the transaction they support cannot proceed. Similarly, if office staff (at either end) are absent for prolonged periods because of a virus outbreak, all the creation, checking and dispatching of these documents are subsequently halted.

Now consider what happens if we digitise that paper flow. Automation takes care of the data uploading necessary to create digital trade finance documents. The transfer between parties is at the click of a mouse across secure digital networks, which is all a huge advantage in offices short of staff. Compliance checking, too, is automated.

End-to-end visibility on an advanced digital platform also means documents do not disappear, as paper versions frequently do in transit. Encryption and audit trails, meanwhile, reduce the many opportunities for fraud and forgery with paper documents, as they are never out of sight.

One feature of supply chain disruption is that carriers under pressure to achieve fast turn-around are sometimes tempted to release cargoes without presentation of the bill of lading, causing significant problems. The sheer speed of electronic transfer reduces the chances of this happening. Electronic bills of lading (eBLs), letters of credit, packing lists, guarantees and letters of indemnity all transfer at the speed of the internet. There is no waiting around for documents to arrive.

Research has revealed that electronic bills of lading (eBLs) require a tenth of the time it takes to process their traditional paper equivalents. Even without delays caused by acts of god and disease outbreaks, cargoes often sit in port awaiting the arrival of the paper documentation, heightening the potential for demurrage penalties. This is especially true on shorter routes.

Transferring eBLs so swiftly is critical during a time of great disruption. Bills of lading are documents of title and confer ownership of cargo. Without a bill of lading or, where necessary, a letter of indemnity, shipowners may be unwilling to release the relevant cargo. Yet the shipment that has all the correct documentation attached to it is most likely to be released first, especially when normal operations resume.

Digitisation also alleviates many of the difficulties in the financial supply chain connecting exporters, carriers and importers. When bank branches suspend operations to reduce the spread of infection, for example, letters of credit may not be issued in time to meet the payment requirements for goods.

As we move into an era of more powerful storms, increased trade friction and unpredictable virus outbreaks, corporates, banks and carriers all need to think harder about digitising their trade finance documentation if they want to avoid severe delays.

In an article on the COVID-19 difficulties, the Financial Times said the outbreak had prompted a surge in the use of remote working solutions in Asia.  Now is the time for global trade to undergo a similar digital transformation and end the dependence on paper.

The digitisation of trade finance documents cannot eradicate all the problems of epidemics or regional disputes, but it will make trade safer, smarter and faster, abolishing the reliance on out-dated methods that only increase the level of risk.

Save

The post Paper is a liability when global trade is under stress appeared first on Bolero (WiseTech Global Group).

Global trade is on the cusp of a major digital transformation. Exporters, importers, banks and carriers are continuously trying to streamline paper-intensive operational processes, seeking safer, smarter and faster digital solutions.

While the industry is buzzing with options such as distributed ledger technology, AI/NLP, RPA etc., in reality most organisations still find digitisation a bridge that is difficult to cross. The industry in itself has come a long way with governments and trade bodies taking steps to create and foster trade ecosystems. Yet the lack of ubiquity and interoperability in these disparate initiatives still remains a challenge for businesses.

We at Bolero, are pleased to announce the launch of Galileo, our brand new platform for digital trade that seeks to solve some of these key challenges. Galileo has been designed to keep the customer experience central, enabling seamless interactive digital conversations. It is truly open and ecosystem-ready; the only digital platform that enables the convergence of physical and financial supply chain by incorporating multi-banking capability with eBL flows.

In the new platform, corporate clients will be able to access all Bolero services through a single user interface, get end-to-end visibility of their transactions and connect with their counterparties and multiple banks.

Banks will have a consolidated view of transactions across different clients and will be able to connect the new platform with their back-office systems through APIs.

With Galileo’s modern and open architecture, Bolero will provide value-added services to clients through pre-integrated partner solutions. Document pre-check is one such service that we are adding in partnership with Traydstream. As trade technology evolves, clients can expect new services to be added much in the same way as an app store.

Galileo has been designed in collaboration with our customers spanning corporates , carriers and banks and brings together the collective mindshare from over two decades of trade experience and industry-wide expertise. It redefines the user experience and promises to deliver much more  functionality.

With the new Galileo platform, we have future-proofed digitisation to make it more accessible, more connected and fully capable of integration with critical third-party applications. Galileo will provide access to the best of the world’s evolving trade eco-systems, where interoperability opens the door to new solutions and new services.

Personally, working on Galileo has been a very fulfilling experience. You can read the exclusive interview that Global Trade Review did with Andrew Raymond and myself. Inviting more conversations around Galileo at anchal.tiwari@bolero.net

Save

The post Bolero’s new Galileo platform is the future of trade digitisation appeared first on Bolero (WiseTech Global Group).

Blockchain and the distributed ledger technology (DLT) on which it is based, are now regarded as having the potential to eliminate painfully slow, error and fraud-prone paper-based processes in trade. This is great news for Corporates, carriers and freight forwarders.

The ledger at the heart of blockchain can be open to public scrutiny or closed (requiring permission) and its hash technology promises great security. It should allow for the faster and safer transfer of authenticated trade documents, reducing opportunities for fraud.

Yet while many very promising blockchain-based solutions have emerged, there are a number of hurdles that still need to be overcome in terms of infrastructure, tapping into existing networks, standardisation, acceptance and legal enforceability. It is important these are addressed before we see a viable, standalone blockchain trade documentation platform on which all parties feel comfortable transferring a bill of lading.

Think of the hybrid car

A good comparison would be with the electric car. We all know that the super-efficient, low-emission electric car is the future of the automotive industry, but even today the number of such vehicles on our roads remains relatively small. This is due to a variety of reasons including lack of charging points, the time they take to charge and the range the battery provides.

What has happened, however, is that tried-and-tested internal combustion technologies have been improved and combined with more efficient batteries to create hybrid vehicles that achieve hugely greater MPG and reduce emissions without requiring a vast new infrastructure.

Similarly, we know that blockchain technology will have a major role to play in the exchange of trade documentation, yet we could be waiting a while before organisations can reap the benefits.

As with the development of a hybrid vehicle, is there a hybrid trade documentation equivalent for blockchain where existing digitisation platforms, for example, can work together to provide a practical solution today?

The necessity for network-building

For starters, digitisation platforms, have a ready-made trading network already in place, connecting banks, corporates, carriers and other trading counterparties. These are rapidly expanding because of the established security and efficiency of their systems and their understanding of trade mechanisms.

Standardisation in digital trade documentation is also another area where blockchain will benefit. For a document as important and versatile as a bill of lading, standardisation offers huge advantages for everyone, supercharging interoperability of systems around the globe. But without critical mass, blockchain solutions are unlikely to make any headway on their own. They will need to link up with solution-providers who have achieved adoption and credibility among exporters, carriers and banks.

The advantages of using a legal framework

The use of ‘Smart contracts’ is a central part of blockchain transactions, but do they provide sufficient security on the legality and enforceability of those transactions? While smart contracts can be used to effect and record the performance of contractual undertakings on the blockchain, they are of limited value when it comes to the formation of those contracts which require some form of master agreement that participants agree to abide by. Without clear legal infrastructure, achieving adoption is likely to be extremely difficult. How can legal disputes be resolved, or counterparties have any confidence in transactions? Being able to interoperate with an existing digital trade ecosystem for example, however, eliminates this obstacle when the solution is based on an internationally accepted legal framework underpinned by the jurisprudence of, for example, English law.

There is a wider point here, which is that for digitisation to be successful, it must not just match, but look to radically improve day-to-day working processes in international trade. This is not easy when there are multiple parties using multiple documents in different time zones and jurisdictions. A real understanding of how international trade works and the trusted and legal execution of transactions is required before a solution can be designed and implemented which operates to everybody’s advantage.

Technological innovation on its own will not be enough, which is why we need the best of both worlds – the practical benefits of today’s digitisation platforms that are tried-and-tested and built on real-world trade processes – and the advanced efficiencies and security that blockchain will deliver.

The hybrid combination of trusted B2B networks and DLT

By combinging established and trusted digitisation solutions with distributed ledger technology, the efficiency and security benefits could flow right through the supply chain today.

Interoperability of this order provides rapid access to significant gains just as corporates need to respond rapidly to new opportunities and challenges. The result? Greater availability of working capital and vastly improved efficiency and productivity for all parties.

Instead of waiting for blockchain-based solutions to achieve global acceptance, companies could instead adopt a hybrid approach that will deliver safer, smarter and faster digitisation immediately, along with all the gains they rightly envisage.

Save

The post The direct route to blockchain starts with established, trusted B2B networks appeared first on Bolero (WiseTech Global Group).

On a BA flight from Delhi to Heathrow I was thinking about the week’s meetings and the extraordinary things that are happening in India. It is an amazing country that is changing quickly.

The Prime Minister Narendra Modi engaged on a platform of modernisation when he was elected in 2014 with a vision of taking India from its unenviable position as the world’s largest bureaucracy into the 21st Century.

The country has subsequently benefited from some bold initiatives such as Digital India, which aims to provide wider internet access to government and other services and to broaden the understanding of all things digital among the population. Aadhaar is the world’s largest biometric identity system that has provided every citizen with a unique 12-digit ID, while TReDS is India’s Trade Receivables Electronic Discounting System. All of these initiatives are evidence of a clear government drive towards a digitised future.

In addition, the whole population seems to live on mobiles (OK I guess the younger generation in the UK are no different). The Jio mobile network, a subsidiary company of our customer Reliance Industries, now has more than 250 million subscribers from a standing start just three years ago.

Progress has come rapidly to India and the country has made a lot of money providing outsourced IT services for many years which means there is a sustainable generation of people who have grown up with digital technology. Along with government support they are now changing their own companies.

At Bolero we have been at the forefront of this trend. We have been working with Reliance, one of the country’s largest and most forward-thinking companies, to digitise India’s export business. Starting in petrochemicals, Reliance is on-boarding increasing numbers of customers, carriers and banks. The company was also a high-profile participant in the recent R3 Voltron transaction that broke new ground by executing a Letter of Credit on the Corda distributed ledger supported by a Bolero electronic Bill of Lading (eBL). This was an important first in the practical application of blockchain technology to the digitisation of trade finance and it was symptomatic of Reliance’s appetite for innovation founded on practicality that they gave it their backing. Because it was so innovative, it created a lot of interest and generated many inbound enquiries from other companies.

Being a nation that is now far more integrated into global trade than at any time since independence, India’s banks and established international institutions are also embracing digitisation with a degree of urgency. The country’s customs authorities, for example, are much more open to the electronic submission of documents and see the benefits of gaining access to shipping documents of title that have been created in a secure and accredited platform.

The ingredients and the culture of change are now in place that enable the world’s largest democracy to take advantage of the digitisation of trade.  It presents many exciting opportunities and we at Bolero are stepping up our focus on India as a market.  I am looking forward to seeing how this develops.  India, once synonymous with foot-dragging, paper-shuffling bureaucracy, has the potential to be a leader in moving the world to a more digitised future.

Save

The post Helping India blaze a trail from paper elephant to digital tiger appeared first on Bolero (WiseTech Global Group).

Have we finally reached the tipping-point in trade digitisation?

For so long any practical application of technologies such as blockchain has been little more than a pipe dream. Yet at Sibos 2018 in Australia we heard discussions about real, grounded applications such as the Voltron platform, pioneered by Bolero’s partner R3, that hold out the promise of meeting the requirements of organisations immersed in world trade.

Sibos is the premier business forum for the global financial community where  all aspects of payments, securities, cash management and trade are debated. This year’s event in Sydney attracted more than 7,600 delegates and 166 exhibitors on two showroom floors. We were there four days and none was wasted, with a number of new company contacts and many more informal conversations of potential value.

Standards are holding back digitisation

It was great to see that Bolero was frequently cited as an important innovator and participant right across the trade digitisation movement. We saw genuine recognition that the Bolero platform is delivering the gains of digitisation for corporates, banks, forwarders and shipping liners.

Yet in many sessions, despite the optimism about how digitisation of trade documentation delivers real benefits in speed, cost and security, the question of standards was repeatedly aired. Speakers talked of how bodies drafting standards move at a glacial pace and have failed to keep up with digital technology, with the result that digitisation is held back, and the benefits denied to more organisations.

Banks, shippers and corporates looking to streamline workflows are hampered by lack of interoperability of many new solutions due to the absence of common legal or data standards. The substantial amount of debate on this topic at Sibos was striking, but not surprising, given the growing levels of frustration. Some speakers were very forthright about the need for updated standards for bills of lading, invoices and shipping documents so we can all extract the substantial efficiency gains from digitisation and electronic presentation. The feeling was that too many heels are being dragged at present.

Bolero in key blockchain initiative

We saw a number of key initiatives being launched at Sibos including R3’s Voltron, of which Bolero has been an integral part.  This launch delivers an open platform for documentary trade, targeting production on R3’s Corda Enterprise blockchain platform in 2019. Founding members of Voltron include Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB and Standard Chartered. Voltron’s initial aim is to use blockchain technology to bring significant efficiencies to transacting letters of credit. Bolero’s eBL solution will be integrated onto the Corda platform for the issuance and management of eBLs allowing title of the goods to transfer digitally.

Bolero helps underpin the UK-Australia FinTech Bridge

Bolero was also pleased to be invited to be part of the British delegation to the UK-Australia FinTech Bridge event prior to Sibos. The Bridge was established earlier this year by the two governments to foster cooperation. Our invitation to attend the event in Sydney is a mark of how Bolero is increasingly building awareness and a strong customer base in the region.

Overall, Sibos has been a very encouraging event for Bolero. Trade digitisation is continuing to gain momentum and Bolero is at the heart of the changes that are taking place.

Save

The post Concern about lack of standards highlights the benefits of Bolero at Sibos 2018 appeared first on Bolero (WiseTech Global Group).

Changing world trade by making processes faster and more efficient was a constant theme at GTR Asia Trade & Treasury Week in Singapore.

Held at Marina Bay Sands, from September 4 to September 7, and billed as the “The world’s largest trade and treasury gathering”, this very well-attended and organised event was impressive in the array of opinion-leaders and top business people it attracted.

On the second day I took part in a popular panel debate relating to alternative funding providers. This addressed where they fit into providing trade finance and how technology is part of the picture. We know that the weight of global banking regulation has encouraged many banks to limit their overseas commitments and concentrate on their home markets, where they can more easily assess who they are dealing with to achieve compliance. This has left a gap where smaller and medium-sized businesses find it increasingly difficult to gain access to trade finance.

We shared the platform with big name banks and with NR Capital, the Singapore-based alternative commodity trade finance solution provider which is using Bolero’s multi-bank trade finance solution to facilitate crucial investment support to companies in the bulk physical commodity markets around the world.

In a presentation, colleagues from NR Capital explained how they use Bolero to provide SME firms around the world with access to essential transaction support, investing in asset-backed transactions. Bolero is providing the automation, particularly for electronic bills of lading, and presentation of trade documents or for receipt of letters of credit from banks.  The point made by NR Capital was that businesses should automate from day one in order to be handle growth in the most efficient way possible.

I was able to stress how our cloud-based Bolero platform is crucial to all this, enabling businesses that want to engage in trade to gain better access to trade finance at a time when big name banks are becoming more reluctant. Bolero’s auditable processes and automated, error-free checking, provide lenders with strong evidence that a business is compliant with Know Your Customer and anti-money laundering rules (AML).

The quality of the discussion and the number of people attending indicated a how digitisation of trade processes is already high on the agenda for many organisations. There was particular focus on the benefits of using electronic bills of lading (eBLs). Everyone understands the huge benefits of digitising trade documentation and dropping the centuries-old use of paper, but many are hanging back, waiting for greater certainty about the outcomes of different solutions.

Yet it was clear that many participants in the debate were in no doubt about the big advantages of digitising an important document such as the bill of lading. The problem may still be that many businesses involved in international trade remain unaware of how using eBLs could transform the efficiency of their entire operation. With that in mind, the panel debate was very useful in getting across the message about the benefits of digitisation to a very focused user-group.

Aside from these important aspects of international trade, the event was a useful barometer of opinion on some of the macro-economic challenges confronting everyone involved in trade, such as protectionism and how it will affect South East Asia and global trade with China.

Throughout the entire event, audiences for the various discussions and debates were consistently large, which is a sure sign of a well-organised conference and of the escalating interest among banks, corporates and carriers in using technology to make international trade more efficient and profitable.

More broadly, as the debate on digitisation is getting louder and has more voices clamouring for attention, Bolero is being well-heard.

Save

The post Singapore event proves global trade community is eager to digitise appeared first on Bolero (WiseTech Global Group).

“A complete no-brainer that has given us a massive advantage” is how Parag Gudka, director of London-based Aprirose Trading describes the adoption of Bolero’s ePresentation. “Since we started using Bolero’s ePresentation to exchange electronic bills of lading, invoices, certificates of analysis and other documents, Aprirose Trading has eradicated all demurrage charges and removed several days from the process compared with our previous use of paper documents.”

In the past, Aprirose experienced delays with almost every shipment, but now all the risks associated with couriering paper bills of lading from India to the UK have been eliminated.

From the beginning of 2018, Aprirose has conducted more than 70 transactions with ePresentation. This will eventually facilitate 90 per cent of Aprirose’s business.

The previous costs and bottlenecks experienced by Aprirose Trading

The company, which has a turnover of $53 million, trades between 1,500 and 3,000 tonnes of polymers per month with East Africa as the authorised distributor for a large Indian conglomerate. For Aprirose these shipments typically require 45 bills of lading.

Previously, using a courier would add two to three days to the time it took to exchange documents, causing bills of lading to arrive later than the time it takes the cargo to arrive in East Africa, often leading to substantial demurrage costs and indemnity payments.

Using digitised documents on ePresentation, Aprirose is now able to administer all the documentation in advance, using a quarter of the man-hours previously required.

“Whereas two full-time employees would administer the paper documentation, one employee can now achieve more accurate results in half the time” said Parag.

As soon as the cargo is loaded, documents are raised within 24 hours on ePresentation. The digital process allows Aprirose to receive the title documents much quicker. On average, ePresentation saves three to four days per shipment, cutting out demurrage and courier charges and the time-consuming wrangles associated with the loss of bills of lading.

The end of 20 years of frustration with traditional paper processes

Aprirose was encouraged to enrol on Bolero by the Indian exporter 18 months ago, after they themselves started using ePresentation to support major transactions in its worldwide export business.

“The exporter knew about my 20 years of frustration with paper bills of lading and so I did not take a lot of persuading,” said Parag. “Almost every shipment used to get delayed by the documentation, leading to frustration among clients. It was absolutely crucial that we removed the bottlenecks. The way technology is moving we need to move with it and there are massive advantages not only in speed and efficiency gains but also in reducing fraud.”

“Bolero is a simple system to use and implement. All the staff have found it easy and we have had no problems at all.  Since our banks are connected to the Bolero ecosystem, we have considerable reassurance that the solution is secure.”

“It’s the speed of the transaction that makes Bolero the obvious solution. Click, click and it’s done,” says Parag.

“It is a massive advantage and adoption was a no-brainer”.

Save

The post UK trading company finds Bolero a “no-brainer” for shipments to East Africa appeared first on Bolero (WiseTech Global Group).

A case involving sheepskins exported from Australia to China is yet another demonstration that paper bills of lading are open to all manner of manipulations.

In this case, which was before the courts of New South Wales in Australia, a freight forwarder was found to have engaged in misleading and deceptive conduct for issuing house bills that appeared to be the original negotiable bills. The bills named the consignee as “To order”, were stamped “Original” and were signed by the freight forwarder, “as agent” for the carrier.

By issuing the bills, the freight forwarder had, in effect, “put into the world two sets of documents of title” as the ocean carrier had also issued negotiable bills for the same shipment.

When the shipper defaulted on a loan obtained on the basis of the house bills, the finance company could not take possession of the cargo as it already had been released using the original bills. Understandably, the finance company became the plaintiffs in the New South Wales court action.

The case was heard in November last year and illustrates once more how paper bills of lading, which are still heavily in use, are so vulnerable. Quite apart from the details of this case, which are obviously disputed, tampering with paper documents remains the most common type of fraud, either to legitimise a fraudulent transaction or to use false information to raise finance.

Bills of lading are all right on paper? – No chance

Fraud is certainly on the increase. The newly-published biennial PWC report into fraud, found that almost half (49 per cent) of global organisations have been hit by “economic crime”, which was an increase of a third on the last survey in 2016.

Trade documentation has been used in fraud for a very long time, but in the contemporary world, there is really no excuse for continuing to use paper bills of lading. Three years ago (in 2015), the marine indemnity insurance provider ITIC issued a warning to shipping intermediaries to check bills of lading and associated documentation after a Belgian shipping agent released six containers of castor oil valued at $270,000 against a fraudulent bill of lading. The containers were to be shipped from India to Belgium and, although the bill of lading against which the ship agent released the cargo to the consignee appeared to be genuine, it turned out to be a forgery.

A better solution

Imagine by contrast if bills of lading were constantly visible to everyone who is party to the transaction and nobody else. A rulebook based on English common law and to which all parties subscribe, would only allow access by the legitimate holder and all amendments would be immediately revealed, thanks to a comprehensive, automated audit trail.

Of course, this is not an imaginary scenario at all. Carriers, , exporters, importers and everyone else involved in international trade are already solving the problems of fraud or unauthorised amendment of bills of lading by exchanging documents over a digital platform. Not only is this infinitely more secure, it also generates substantial cost-savings. Its speed of execution is constrained only by the internet and it pretty much eliminates couriering and storage charges by virtue of its secure, cloud-based digital operation.

On a digital platform, tampering becomes extremely difficult because authentication and traceability are integral to the technology. In addition, thanks to a high degree of automation, every participant is also relieved of the burdens of Know Your Customer protocols, vastly increasing the likelihood of compliance with anti-money laundering requirements around the globe.

eBLs deliver security that paper cannot match

Electronic bills of lading (eBLs) are at now the centre of digital change in international trade because of their advantages in speed, cost and especially – security. Issued by a contracting carrier to a shipper just like its paper equivalent, the eBL serves three basic functions. It is a receipt from the carrier for the goods it describes, as well as the contract for carriage, bearing all the necessary details. Its third function is as a document of title, entitling the rightful holder to claim delivery of the goods.

The eBL fully replicates the functions of a paper bill of lading, containing as it does, the specific data such as a description of the cargo, the ports of loading and discharge, the date of shipment and so forth, along with the terms and conditions of carriage.

While the eBL can be used to obtain letters of credit and documentary collections, the in-built security of the platform ensures it is only the holder who can use the eBL for this purpose and is the only party permitted to demand delivery of the cargo from the carrier.

The bill of lading has been a mainstay in global trade for centuries and is likely to remain so for much longer. In digital form it is now at the forefront of introducing new levels of security for all involved in international trade, a fact that the Australian sheepskin trade should appreciate.

Save

The post Fraud or deception using bills of lading can be eliminated through digitisation appeared first on Bolero (WiseTech Global Group).

The rise of more technologically-powered funders is now allowing SMEs to secure funding otherwise unavailable to them, due to the strict regulations placed upon traditional lenders.

Restrictions from such regulations has meant that SMEs mostly do not fit the criteria for banks to justify lending. The demands of anti-money laundering (AML), Know Your Customer (KYC) rules, sanctions and other banking provisions have been deemed too time-consuming and too costly where smaller exporters and importers are concerned.

The result has unfortunately been detrimental to the success of SMEs and unfavourable for international trade. In 2016, the ICC Banking Commission’s report found that 58 per cent of trade finance applications by SMEs were refused. This was a major factor in hampered growth, the report noted, since as many as two out of every three jobs around the world are created by smaller businesses.

There is a growing realisation, however, that if digitisation makes sense for corporates seeking big gains in speed of execution, transaction-visibility and faster access to finance and payment, it will for SMEs. The ICC Banking Commission report of 2017 estimated that the elimination of paper from trade transactions could reduce compliance costs by 30 per cent.

Over the past few years, for example, many trade digitisation platforms have emerged offering innovative business models for supplying trade finance and liquidity, while optimising working capital, and enhancing processes for faster handling and cost savings. Progress is under way, but it requires knowledge and expertise.

Fintechs in trade hubs such as Singapore, where there is huge emphasis on innovation, are taking the lead, transforming the availability and access to finance for SMEs. By making the necessary checks so much faster and easier and opening up direct contact with a greater range of banks, digital platforms enable customers to gain approval for financing of transactions that would otherwise be almost impossible. Not only that, they enjoy shorter transaction times and enhanced connectivity with their supply chain partners.

However, the fintechs cannot do it alone, they need to be part of a network of networks that operates based on established trust and digital efficiency. No technology can work unless it can satisfy the raw business need of bringing together buyers, sellers, the banks into transaction communities. This requires the building of confidence and the establishment of relationships, along with – very importantly – a real understanding of trade transactions and the processes of all involved.

Nonetheless, it seems pretty obvious that digitisation, the market for SME financing in international trade is set for real expansion.

Save

The post Digitisation is paving the way for SME access to trade finance appeared first on Bolero (WiseTech Global Group).