More financial institutions join the Trade Finance Distribution Initiative

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

The TFD Initiative is an industry-wide drive to use technology and standardisation for the wider distribution of trade finance assets. The project launched earlier this year, attracting number of banks, institutional investors, trade associations and trade finance service providers. Some of the members of the initiative include ANZ, Crédit Agricole CIB, Deutsche Bank, HSBC, ING, Lloyds Bank, Rabobank, Standard Bank, Standard Chartered Bank, and Sumitomo Mitsui Banking Corporation.

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.

TFD Initiative’s 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.

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, commented:

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, explained:

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 scaleable 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, shared:

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, added:

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, concluded:

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.

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