Pensions Age: The strongest link? Trade finance as an option for pension funds
Christoph Gugelmann comments on pension funds looking at trade finance as an alternative investment for diversification.
Euromoney: Trade finance is an asset class for private credit funds
Nils Behling comments on the work Tradeteq have been doing to promote the tokenisation of real assets.
Comment: FSB warns of crypto risks
Christoph Gugelmann comments on the Financial Stability Board's warning of emerging risks from crypto assets.
Treasury Management International: Welcome to London
Christoph Gugelmann, our CEO and co-founder, writes about the predicted influx of financial institution into the UK's capital
Could AI finally help close the trade finance gap for SMEs?
Artificial intelligence (AI) is a very popular buzzword these days. And you might be living under a rock if you haven’t heard about these devices which aim to aid the everyday lives of us “Lazy humans”. However, if you were unaware, the technology usually relies on large volumes of data or sophisticated models to help understand the best ways to make sense of all the information.
Why London’s Fintech Scene is Largely Unfazed by Brexit
The UK capital’s vibrant fintech scene has all the right ingredients to shine, writes Nils Behling, Co-Founder of Tradeteq
Trade Finance: Hidden Treasure in the Hunt for High Yields
Ask an investor which asset class they see as the most attractive and trade finance may not necessarily feature in the mix. This little understood asset class is one of the oldest and most profitable forms of institutionalised credit, yet remains an untapped investment opportunity.
The trade asset information investors really want
Article featured in the Trade Finance Distribution Initiative newsletter - June 2019
Investor interest in trade finance is growing rapidly
Investment in trade finance assets has made a number of headlines in recent months, denoting the growing awareness of the benefits of such assets in the investment community. The first crypto wallet that allows users to invest in trade finance assets from multiple markets will go live in October. Also Federated Investors launched the first sovereign energy trade finance fund in the world.
AI for investors: Potential applications
Artificial intelligence is widely expected to become commonplace within institutional investors by 2020. What specific applications can we expect?
How will investors leverage trade finance growth?
A new study by Technavio came out at the end of May, stating that the global trade finance market would grow at a compound annual growth rate of 3.75% between 2018 and 2022. The prediction is based on market analysis with inputs from industry experts including key financiers like BNP Paribas, Citigroup and HSBC, amongst others.
Technology and Regulation: A chicken and egg situation?
Last month, the International Federation of Accountants (IFAC) and the OECD’s Business and Industry Advisory Committee (BIAC) published adamning reporton the cost of regulatory divergence in the financial sector. The survey of over 250 experts and business leaders revealed that financial institutions on average lose 5% to 10% of their annual turnover because of having to reconcile different legislations in their transactions. This amounts to no less than US$780bn a year.
Emerging markets will benefit most from finance distribution
Access to trade finance is crucial to SMEs’ internationalisation, particularly in emerging markets, yet they often struggle to get bank support due to their limited collateral. Making it easier for banks to distribute trade finance risk with institutional investors has the potential to change this dynamic and revive trade growth on a global level.
Asia really is the trade finance innovation hub
The ASEAN-Australia Digital Trade Standards Initiative is yet another proof that Asia is one step ahead when it comes to innovation in trade finance. Announced last month at the ASEAN-Australia Summit in Sydney, the initiative aims to “provide a framework for Australia and ASEAN countries to cooperate in developing, adopting and using international standards that promote digital trade and support inclusive economic growth in the region”. It is the first multilateral government initiative to standardise the booming digitisation of trade.
Why hasn't trade asset distribution taken off yet?
It has been presented as a miracle solution to help banks free up liquidity under Basel III regulations, and as a great way for investors to diversify their portfolios, so why isn’t trade asset distribution more commonplace? Around this time four years ago, Bank of America Merrill Lynch organised its first Trade Risk Distribution Investor Forum in Singapore. It was attended by about 50 executives from 30 global banks, all there to discuss why redistributing trade finance assets made sense in light of new capital regulations and leverage ratio requirements.
Funds need to wake up to the trade finance opportunity
Technology has finally caught up on banks’ desire to distribute trade assets - and it has never been easier for investors to get involved. The trade finance sector has been trying to raise awareness on the relevance of investing in trade assets for years. In fact, the International Chamber of Commerce (ICC) Banking Commission releases an annual report analysing the default risk presented by these assets, which has repeatedly confirmed their low risk profile.
The evolving role of AI in trade finance
Artificial intelligence (AI) is changing the way trade financiers do business, making trade assets investable at last. The first applications of AI in the trade finance sector are fairly recent, and mostly focused on compliance and due diligence such as natural language processing to create comprehensive profiles of individuals or businesses involved in a transaction, based on extensive web searches. Other compliance applications scour trade finance documents to find anomalies - for example discrepancies between the price per unit of a product and the final invoice value.
SME trade finance gap can be filled by institutional investors
Year after year, the Asian Development Bank’s (ADB) Trade Finance Gaps, Growth, and Jobs Survey comes to the same damning conclusion: Small and medium enterprises (SMEs) are still facing a significant trade finance gap. In 2016, it stood at US$1.5tn.