The new decade of 2020’s has just started. The last years of the previous decade were astonishing in terms of new technical opportunities emerging. Also the Financial Services industry started to adapt into the new technology both from regulative and strategic grounds enabling better Financial Service process support for other industries’ digital transformation.
When the other industries build up their new business models based on the fourth industrial revolution (4IR) where everything will be and is connected, the management of Supply Chains and financing of Global Trade will need to be transformed as well. Existing, tedious and paper-based processes will not be anymore usable. Global Trade will be faster, electronic, platform-based, more inclusive and therefore even more complex. The counter-parties still need to gain better and more automated trust to each other as the challenges exposed by fraud will expand as well thanks to digitalisation.
Many challenges at new, digital Supply Chain and Global Trade processes are said to be solved with the good properties of Distributed Ledger Technologies (DLT) and Blockchains. This tech still has a lot of challenges not being the Holy Grail as the one and only solution. We still have seen that many Trade Finance area bottlenecks can be helped and dismantled with DLT yet it is not one-size fits all. But when we look with more holistic view on the new tech opportunities, we will find out that tracking with Global Positioning System, Internet of Things, Cloud, Indisputable Digital Identities (persons, corporations, personas and things), Robotics, Artificial Intelligence / Machine Learning, Robotics and Application Programming Interface based integration offer together capability to start creating end-to-end business processes for the Trade and Supply Chain Finance on requirements of the fourth industrial revolution.
Digitally connected and validated counter-parties will be able to trust each other. Connectivity and integration of various Supply Chain and Global Trade platforms will need common language, semantics to make them interoperable. This has been now realised also by one of the key stakeholders in Trade Finance, the International Chamber of Commerce (ICC), creating a new operational Digital Standards Initiative (DSI), aiming to create this interoperability rule set starting on the 1H 2020 from Singapore. Also ICC’s new Uniform Rules for Digital Trade (URDT) initiative will deliver and support common standardisation starting as well in 2020.
What will be then role of our Standardised Trust community. In relatively short time (starting in spring 2019) our Guarantee semantics definition team has reached a solid basement to define usable semantics for bank and non-bank Guarantee application. The basement enables continuation with faster pace on the other Guarantee life-cycle stages with innovative access to any internet based free resources on code lists and text templates. This semantic model will be a basement for smoother integration of any technical and functional solution in the future. And most of all, it will be freely available for any interested party to reuse.
In year 2020 and further the Standardised Trust community will continue its well started and balanced collaboration of various stakeholder groups and, of course, will follow-up and align with other market initiatives of same basis and goals to avoid any double effort spending. On the other hand, the Standardised Trust team will welcome any voluntary and passionate resource to join the group and contribute. Let us make true Trade Finance digitalisation happen together! Next possible opportunity to discuss and learn more is the ITFA event in Helsinki, Finland on the 27th of February, 2020. See you there!