Global banking giants have joined forces to create the Trade Information Network, which they say will accelerate the digitisation of traditionally paper-based processes, including letters of credit (L/Cs) and provide trade finance needs currently unmet in the early links of the supply chain.

The consortium of ANZ Banking Group, Banco Santander, BNP Paribas, Citi, Deutsche Bank, HSBC and Standard Chartered reckon the digitisation of L/Cs and other paper-intensive instruments will unlock billions of dollars of funding for global exporters.

Once operational, the banks say the Trade Information Network will become the first inclusive global multi-bank, multi-corporate network in trade finance.

Unmet demand

The network aims to address the unmet demand for financing in the early links of the supply chain. It will do this by enabling corporates to easily and securely communicate trade information directly with banks of their choice.

Corporates will be able to submit and verify purchase orders and invoices to request trade financing from banks. By providing those banks with access to trusted trade information, the network aims to help to mitigate the risk of fraudulent trade information across the industry.

Risk assessment

According to the consortium, this would enable banks to better assess risks and provide trade financing to earlier links in the supply chain, including for small- and medium-sized enterprises that have traditionally experienced difficulty in accessing trade finance.

As well as the founding banks, over 20 more banks globally are actively participating in developing the network and several corporates have already expressed an interest in participating in pilots.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.