Insight

Digitized Trade Banking? A Sight for Sore SME Eyes

But there is light at the end of the tunnel. Digitization of paper-based manual processes and the rapid evolution of new technologies are beginning to impact areas such as identity verification, distributed ledger technology, smart contracts and even tracking of goods in transit.

This all helps to reduce friction, simplify the process and reduce the cost of trade finance. But many of these solutions only focus on a small part of the overall supply chain and struggle to "talk" to each other.

Delivering big solutions at great speed

Many mainstream banks are signing up to consortia such as Marco Polo or we.trade, a blockchain-based digital trade finance network, in an effort to address the challenges. But there’s still a long way to go.

Anglo-Gulf Trade Bank (AGTB) is one company leading the way.

Together we rapidly built a new digital trade bank from scratch. The company aims to disrupt the UK–UAE trade corridor before expanding into other geographies, outpacing incumbents by putting the needs and expectations of businesses at the centre of its thinking. Here are a few of the key lessons we learned along the way:

1. Avoid digitizing legacy systems and processes
   Instead, reimagine your offering for example from the business owner’s, Finance Director or Treasurer’s perspective to unlock new ways of operating.
2. Technology-enabled collaboration shouldn’t stop at FS providers
   Be sure to collaborate with logistics and storage providers, ports, customs authorities, etc. to help customers connect to multiple trade ecosystems.
3. Don’t forget your colleagues
   Empower them with modern and secure digital workstyles. Provide data-driven insight into compliance and risk management. Transform products with open systems and digital processes.
4. Select a core banking system that’s lean, open, modular and flexible
   It must pull in data at critical points along the supply chain and meet evolving customer expectations by integrating quickly and securely with preferred partners.
5. Create a single source of truth to avoid multiple teams reconciling data
   This enables analytics, powerful machine learning and AI-driven decision making. Intelligent use of data improves risk management, offers transparent pricing, deepens understanding of clients and optimizes compliance processes.
6. Start small and build in increments
   Offer simple, functional client journeys from onboarding to transacting. Provide intuitive user interfaces and delivery channel choice including fully digital propositions.
7. Keep your eye on the deliverables at all times
   Focus on operational readiness and MVP launch to deliver immediate goals and support future growth. Challenge unnecessary customization and use out-of-the-box functionality from vendor products. Co-create with real clients, iterate with a wider target audience, then scale. 
8. Own the experience
   Your experience is your brand so protect your primary touchpoint. This also allows you to swap out vendors in the future, with limited impact on your customers.