TradeTech

TradeTech | ICC, TFG and WTO Guide

TradeTech

Welcome to the TFG TradeTech hub. International trade and trade finance is going through rapid innovation, thanks to the advancement of both developed and brand new technologies. In the TFG TradeTech hub, we focus on how technologies affecting the digitalization of freight and transport, trade and customs and access to finance. TradeTech can help reduce some of the biggest challenges when it comes to paper documents, access to MSME finance and getting goods from A to B would be easier.

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Videos – TradeTech

TradeTech Podcasts





Featured Insights

Bank of America Tradecast Sibos Live – Bank of America to speak live on the state of global trade TFG announce a Tradecast with Bank of America, covering the impact of the pandemic on international trade and trade finance, as well as a future-looking view on supply chains.
Veridapt Q&A ESG, fraud and managing risk: How Veridapt is using tradetech to change commodities for good TFG’s Joana Fabiao, had the opportunity to sit down with David Thambiratnam, CEO of Veridapt, a global force in commodity management for over 15 years.
Trade Finance talks Deepesh Lies, Damn Lies, and Tradetech/ESG – What’s next for the future of trade finance? Deepesh Patel, Editor at TFG summarised the key themes discussed during ICC Mexico’s three-day virtual event on The Digital Future of Trade and Supply Chain Finance.

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TradeTech – Layers

TradeTech – Frequently Asked Questions

What is the definition of TradeTech?

Trade finance technology, often abbreviated as TradeTech, refers to the use of technology, innovation, and software to support and digitally transform the trade finance industry. It is often considered to be a subcategory of the more widely used term, FinTech. TradeTech, which can include several technologies, puts a particular emphasis on the application of technology and software to modernize trade finance.

These technologies include but are not exclusively limited to cloud computing, optical character recognition (OCR), internet of things (IoT), big data analytics, artificial intelligence (AI), quantum computing, distributed ledger technology (DLT) and application programming interface (API).

Who uses TradeTech and what is its role in global trade?

TradeTech can be used by any firm in the international trade ecosystem. While TradeTech applications are often developed by large banks or innovative technology companies, the applications themselves are not limited to this demographic. 

Many micro, small and medium enterprises (MSMEs), however, are often under the impression that technology is simply not for them and view it as complex and costly. This may be due to the idea that some digital trade technology solutions focus more on trying to explain the technology itself rather than simplifying the explanation and service offering to MSMEs, leading to a lack of audience engagement. Continual efforts to make MSMEs aware of the plethora of opportunities available to them are important. Governments may have a role to play in this respect to raise awareness and provide education for MSMEs.

How has the COVID-19 pandemic impacted TradeTech?

The COVID-19 pandemic has rapidly accelerated the development and adoption of many TradeTech applications. Largely, these have come about as a result of a lack of physical employee presence at the usual places of business, coupled with the inability to print and transport documents. Operating under “normal” processes has not been an option. To cope, banks have been forced to create or scale up ad hoc digital processes.

Despite this firm-level acceleration, there have also been indications that many banks have not received significant meaningful support from government authorities to facilitate trade on digital terms. Nevertheless, the desperate necessity for paperless workarounds has set the industry on a digital course.

Does TradeTech include data security?

Absolutely. Given the vast amounts of data that exist today, data security must be treated as a top priority and subsequently exists at the heart of nearly every TradeTech application. For some, like distributed ledger technology, the security of data is at the core of their reason for being. 

For many firms, using TradeTech applications will go a long way towards boosting their data security. This is because TradeTech providers generally operate internationally. In order to do so effectively, the data security standards that they use to protect consumer data must meet the stringent requirements of every region they operate within. For most end-users, this means that their data will be protected to a standard greater than that legally required in their own jurisdiction.  

What is the most prominent technology in trade?

There is a complex interplay between all of the technologies used in trade. Each technology relies on the capabilities of others to deliver its most powerful benefits. Some of them work to collect and deliver data, others analyse and interpret this data, and still others provide the infrastructure which allows this communication to occur. Take, for example, the role of the internet of things (IoT) in this relationship. IoT devices and sensors on their own provide minimal value. However, when they are combined with the secure transmission capabilities of distributed ledger technology (DLT) and the analytical capabilities of big data analytics tools enabled by artificial intelligence (AI), they are able to deliver meaningful and actionable information.

To name one technology as the most prominent would be like deciding which part of a car is the most important. One could argue the engine, or the brakes, or the tires – but it is safe to agree that the car is just better when it has all of these combined together. 

Why is technology in trade so underdeveloped relative to other industries?

Many of the cumbersome processes that exist in trade today have been developed to allow parties to a transaction to trust the outcome of the transaction even if they do not trust their counterparties. Considering that the counterparties are often on opposite sides of the globe and operating in vastly different legal systems, it has been critical to thoroughly develop robust instruments that both parties trust to facilitate these transactions. 

Until recently, the technological tools that could be used simply did not suffice in facilitating this trust – meaning that they were just not good enough to replace the paper processes that were already in place. This led to several decades of technological progress in other industries that effectively bypassed international trade.  

Today, however, with advancements in technology such as distributed ledger technology (DLT), it is finally possible to trust digital mechanisms in lieu of their paper counterparts that have been in use for so long.  

How can TradeTech help inform trade policy?

Most current national regulations do not allow most TradeTech solutions to be widely adopted. This stems from legal concerns, such as the ambiguity of Uniform Customs and Practice for Documentary Credits (UCP) rules, which do not specify whether digital tools such as artificial intelligence (AI) can be used in lieu of humans. As increased developments and proofs of concept demonstrate the efficiencies and power of TradeTech, policymakers around the globe will be forced to modernize their nation’s policy or sit idly by as the global economy moves on without them. 

The United Nations Commission on International Trade Law (UNCITRAL) has already developed a model law that would create an enabling regulatory framework recognizing e-signatures and e-documents – the Model Law on Electronic Transferable Records (MLETR).  The UNCITRAL MLETR has already been adopted by 2 countries – the Kingdom of Bahrain and Singapore. Its adoption by the broader global community is critical to the continual development of TradeTech solutions. 

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Contents

Access trade, receivables and supply chain finance

We assist companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.
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Latest TradeTech News

22Nov

PODCAST: Getting SaaS into surety and credit insurance – Tinubu’s co-founder talks insurtech

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As the trade finance industry shifts towards more digitalised ways of doing business, new niches are opening up within the… Read More →

19Oct

VIDEO: The F Word – ITFA’s Andre Casterman on helping banks and fintechs work together

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Banks and fintechs have not always been the closest playmates, but ITFA’s Andre Casterman is on a mission to help… Read More →

11Oct

Sibos Live – Bank of America to speak live on the state of global trade

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TFG announce a Tradecast with Bank of America, covering the impact of the pandemic on international trade and trade finance,… Read More →

11Oct

TFG Weekly Trade Briefing, 11th October 2021

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Your morning coffee briefing from TFG. Inflation concerns intensify as cost of energy soars, Boris Johnson reluctant to issue more… Read More →

06Oct

PODCAST: Italy perspective – The future of open banking: automatic IBAN, PSD2 and APIs

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The current banking landscape is going through a makeover. PSD2 and open banking have it’s advantages, but there are also… Read More →

05Oct

Disruption in trade finance compliance

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AI, internet of things, robotics – what do they mean for trade finance, particularly in the efforts to combat trade-based… Read More →

01Oct

Is trade digitization the answer to commodity trade finance fraud?

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Commodity trade finance fraud and losses, along with trade finance digitization, have emerged as common themes in trade finance recently…. Read More →

30Sep

The digital transformation of demand guarantees and documentary credits

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The digital transformation of the banking operations of guarantees and documentary credits to shift from the paper-based and labour-intensive models… Read More →

19Sep

MOOR Holding invests in Enigio’s international expansion

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Enigio Time AB has raised EUR 2.7 million lead by MOOR Holding AB and followed on from current shareholders, including… Read More →

10Sep

Announced: Optimizing the chain: supply chain 4.0 Tradecast

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The TFG / Finastra’s tradecast will explore how corporates are reacting to new levels of volatility, and ultimately, how technology… Read More →

03Aug

ESG, fraud and managing risk: How Veridapt is using tradetech to change commodities for good

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TFG’s Joana Fabiao, had the opportunity to sit down with David Thambiratnam, CEO of Veridapt, a global force in commodity… Read More →

08Jul

Lies, Damn Lies, and Tradetech/ESG – What’s next for the future of trade finance?

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Deepesh Patel, Editor at TFG summarised the key themes discussed during ICC Mexico’s three-day virtual event on The Digital Future… Read More →

05Jul

The IMDA TradeTrust interoperability framework: Road to achieving cross-border, paperless trade

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A session by Loh Sin Yong from Infocomm Media Development Authority (IMDA) at TXF’s Global Trade Virtual 2021, explored one… Read More →

29Jun

Singapore and UK start negotiations on digital trade to cut red tape on e-transactions and e-signatures

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Singapore and the UK begin negotiations this week, aiming to help exporters enter new digital markets and ease the barriers… Read More →

28Jun

Breakdown of the new ICC eRules: eUCP & eURC

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Owing to the pandemic, eUCP Version 2.0 and eURC Version 1.0 rules created by the ICC have received increased interest… Read More →

About the Author

Deepesh Patel is Editorial Director at Trade Finance Global (TFG). In this role, Deepesh leads efforts in developing TFG’s brand, relationships and strategic direction in key markets, including the UK, US, Singapore, Dubai and Hong Kong.

Deepesh regularly chairs and speaks at international industry events with the WTO, BCR, Excred, TXF, The Economist and Reuters, as well as industry associations including ICC, FCI, ITFA and BAFT.

Deepesh is the host of the ‘Trade Finance Talks’ podcast and ‘Trade Finance Talks TV’. He is co-author of ‘Blockchain for Trade: A Reality Check’ with the ICC and the WTO, alongside other industry research.

In addition to his work at TFG, Deepesh is a Strategic Advisor for WOA, and works closely with ITFA. He also sits on the Fintech Working Group of the Standardised Trust.

Prior to TFG, Deepesh worked at Travelex where he was responsible for the cards business and the Travelex Money app in Europe, NAM, UK and Brazil. Deepesh is Chair of Governors and co-opted LA Governor of the Wyvern Federation, which has responsibility for 5 primary schools in South London.

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