In a discussion that I recently witnessed, a participant wished to know the best and the latest technology initiative that any bank has undertaken in Trade Finance and the benefits that they got out of it.

The question set me thinking.

There is nothing like end-to-end digital trade as yet. There are no fintechs that distribute traditional trade products (LC/Guarantees) today and there are no banks that just stick to manufacturing while leaving the distribution to Fintech or Non-Banks.

Trade finance continues to be largely paper driven and manual. For Digital Documents, the standards (international and domestic), rules/regulations and mechanisms to resolve legal disputes are still evolving.

In case of Trade finance, adoption of technology like OCR/AI or Blockchain is still at a nascent/experimentation stage.The sheer variety of documents and document templates makes it difficult for technologies like OCR/AI to work to the best of accuracy.

I know of at least three big (in terms of TF revenue) Trade Finance banks that have initiatives running to

1. Modernize legacy product processors - Build or Buy

2. Improve UX through channel transformation.

3. Automate pre-processing - APIs/Document Check Automation/Digital Contract Management etc.

These multi-year initiatives are focused on reducing the cost of processing, improving UX/self-service, functionality additions and upgrading to a future ready systems architecture. The changes are incremental and non-disruptive with fintech playing a role in some pockets (say Document Check Automation or Digital Collaboration).

These technology interventions have just begun and the benefits of these changes will accrue over the years

So, what is the best technology intitiave in trade ? I would say, the best is yet to come. With ICC and Governments working to set a framework/rules for Digital Trade, the diruption is yet to begin. Thus, statements like "Bank-A witnessed 50% improvement in productivity after implementing AI in trade pre-processing" have to wait - simply because trade digitalization is "work-in-progress".