Trade Out to Help Out: Government help for SMEs

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Our client, Tradeteq, was recently featured in an exclusive article in Global Banking and Trade Finance Review. In the piece, Tradeteq CEO Christoph Gugelmann, explores a more surgical approach to helping SMEs stay afloat during the current pandemic.

Recent months have seen a variety of different measures to help small businesses, ranging from loans, the furlough scheme, to the increasingly popular ‘Eat Out To Help Out’ programme. However, these initiatives only address the problem at the surface level. Instead of giving cash to individual businesses, looking to help entire supply chains can allow governments to take a more surgical approach with a lasting impact.

Increasing government help for SMEs

SMEs represent 90% of the world’s businesses, and more than 50% of employment worldwide, meaning their stagnation would be felt in every region and across every industry. It’s here that governments can lend a hand.

Governments help for SMEs should encourage banks to open up this market and parcel trade finance loans into assets smaller investors can buy. This way, entire supply chain get access to the funds they require. The distribution of trade finance assets to alternative investors is one of the best ways to help these businesses.

Trade out to help out

This approach is similar to the Eat Out to Help Out scheme as the government would be encouraging increased investment into these smaller businesses – only from a more macro level. However, instead of looking to support businesses by eating, we’re helping businesses by trading. Through using a method that addresses an entire supply chain, the positive impact of this investment will be felt for far longer and help many more businesses.

To find read the full article and find out more about how Tradeteq are enabling trade finance distribution, click here: https://www.globalbankingandfinance.com/trade-out-to-help-out-how-governments-should-be-supporting-sme-supply-chains/ 

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Tradeteq calls for government action to improve trade finance distribution

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Tradeteq has published a whitepaper titled Trade Finance in 2020: Asset Distribution – A Macro-economic Necessity.

Read more

Trade finance distribution poised to grow to $3tn market for investors

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“The distribution of trade finance assets to nonbank investors could to grow to a $3 trillion market in the next seven to 10 years, according to Tradeteq Ltd, a digital trade finance exchange.” – S&P Global discuss banks seeing growth opportunities for their trade finance distribution business and collaboration with the Trade Finance Distribution Initiative. Tradeteq’s co-founder and CEO, Christoph Gugelmann, also comments on the growing interest.

Read the article in S&P Global.

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Tradeteq and Pragma win American Financial Technology Awards

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We’re delighted that two of our clients, Tradeteq and Pragma, have been recognised in this year’s American Financial Technology Awards, run by Waters Technology.

Tradeteq, the electronic trading platform for institutional trade finance, picked up the award for the ‘Best Collaboration Initiative’. The accolade recognises their efforts to work with over 20 banks, financial institutions and trade associations to close the $1.5tn trade finance gap through the Trade Finance Distribution Initiative (TFD Initiative), for which it is the distribution technology provider.

Additionally, Pragma has won the ‘Best Front-Office Initiative’ accolade for its innovative multi-asset, broker-neutral algorithmic execution platform, Pragma360. The platform enables front-office professionals to create a unique algorithmic trading suite under their own corporate brand.

Christoph Gugelmann, CEO of Tradeteq, commented: “Winning this award recognises the transformative change Tradeteq is bringing to the trade finance market. By partnering with some of the leading trade finance banks, we hope to transform this market into one that is operationally efficient, scalable and easily distributable. Through the use of our credit scoring AI and electronic trading platform, the TFD Initiative’s members can boost trade finance distribution and contribute to closing the trade finance gap.”

David Mechner, CEO of Pragma, was extremely pleased to win the award, stating: “In recent years, the front-office has focused on regulators’ calls for more transparency around execution quality and market impact. Winning this award is recognition of Pragma’s efforts to help front office professionals respond to this mandate using the most-advanced trading and execution tools.”

For more information about some of the great work we do for our clients, click here: https://www.chatsworthcommunications.com/work/

Five more banks and financial institutions join the Trade Finance Distribution Initiative

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Commonwealth Bank of Australia (CBA), ABN Amro, London Forfaiting Company, Crown Agents Bank and Natixis have joined the Trade Finance Distribution Initiative (TFD Initiative).

They join ANZ, Crédit Agricole CIB, Deutsche Bank, HSBC, ING, Lloyds Bank, Rabobank, Standard Bank, Standard Chartered Bank, and Sumitomo Mitsui Banking Corporation as members.

The TFD Initiative is an industry-wide drive to use technology and standardisation for the wider distribution of trade finance assets. Since launching earlier this year, a growing number of banks, institutional investors, trade associations and trade finance service providers have joined as members.

Trade finance presents a compelling multi-trillion dollar investment opportunity for institutional investors seeking sources of long-term, low-risk returns based on the tangible flows of goods and services. However, there is no scalable market infrastructure in existence to facilitate the exchange of trade finance assets between banks and institutional investors.

This has led to the creation of the TFD Initiative. Its members will work together to utilise and adopt a common infrastructure powered by Tradeteq, the global trade finance distribution platform. Tradeteq’s technology allows banks and institutional investors to efficiently connect, interact and transact. It uses machine learning technology for supply chain predictive analysis, transaction level credit scoring, risk management, reporting and portfolio composition.

Anne-Cécile Delas, Global Head of Trade & Treasury Solutions at Natixis, said: “The distribution of our trade finance assets is key to better serving our clients. Networks like the TFD initiative, gathering banking, regulatory and buy-side sectors, will help to make trade finance assets more accessible to a wider range of investors, in a standard and processed way.”

Sylvain Labattu, Executive Director in Global Commodities & Trade team at CBA, said: “We view the TFD Initiative as a crucial process in the opening up of risk distribution in the trade finance asset class. Staying at the forefront of industry-wide technological and process developments enables us to better connect with and serve both our domestic and global corporate client base through excellence in structuring and distribution, access to data and analytics, and best in class corporate digital offering.

Simon Lay, CEO at London Forfaiting Company, said: “We are pleased to become a member of the TFD Initiative and help shape the use of enhanced technology in our industry. The interest in this forum signals that there is growing interest to establish trade finance as a liquid and scalable asset class to a new investor pool. We all stand to gain by increasing collaboration, leveraging new technologies and adopting standardised processes in the trade finance space.”

Robert Pothoven, Associate Director at ABN Amro, said: “We look forward to collaborating with other members of the TFD Initiative and believe bringing the industry together offers a great opportunity to drive forward adoption of more efficient technology throughout the trade finance market.”

Duarte Pedreira, Head of Trade Finance at Crown Agents Bank, said: “The TFD Initiative has the potential to reshape the trade finance market. By opening up the asset class and making it more accessible outside of the traditional banking world, the TFD Initiative is, in essence, creating a fairer playing field, where non-bank investors can also benefit from the excellent risk/reward opportunities presented by trade finance assets. Crown Agents Bank is proud to work alongside our peers to optimise the benefits of trade finance to our clients.”

André Casterman, Board Member at Tradeteq and Chair of the Fintech Committee at the International Trade and Forfaiting Association, adds: “We are pleased to welcome our latest members. The existing trade finance infrastructure that institutions rely on is outdated, and the industry is on the cusp of change. This is a truly international, collaborative effort that includes the banking community, institutional investors, trade associations and other service providers.

“Our members have told us how the benefits of greater trade finance distribution will be felt along the entire trade finance supply chain, from issuers providing letters of credit right through to corporations seeking cross-border funding. By working together, we are one step closer to achieving our objectives.”