Some ventures, particularly those involving a step change in industry practice, are best executed by collaborating with industry partners. An excellent example is the Trade Information Network, a consortium that Citi helped found in 2018, together with five other banks1. As an inclusive global multi-bank, multi-corporate network in trade finance, it seeks to transform open account trading by digitizing it creating an inclusive and open industry-standard network that is open to both banks and corporates.
It allows corporates to communicate trade information to banks easily and securely (for instance by digitally submitting and verifying purchase orders and invoices), and to request trade financing directly. Buyers and suppliers are in control of their data, designating who can access it. Having reliable information assists banks and can help reduce errors and fraud. Having information earlier in the supply chain can help unlock earlier financing.
By deploying open architecture, standardized connectivity and governance principles modelled on SWIFT, the Network aims for maximum adoption that eases access to trade finance for a wider range of companies, including small-medium size enterprises (SMEs). The fundamental purpose is to address the persistent industry issue of the global trade finance gap estimated at US$1.5 trillion2 which affects SMEs, thereby helping such businesses, and global trade, to reach their full potential. Citi will use the network to offer additional financial support to suppliers earlier in the supply chain cycle.
1 ANZ, BNP Paribas, Deutsche Bank, HSBC and Standard Chartered
2 https://www.adb.org/publications/2019-trade-finance-gaps-jobs-survey
Source: citigroup.com
