This TechChallenge was a joint initiative of the BIS Innovation Hub (BISIH) and the Hong Kong Monetary Authority (HKMA), designed to showcase the potential for new innovative technologies to resolve problems in trade finance (TradeTech). It was supported by the Asian Development Bank (ADB), the International Chamber of Commerce (ICC), the International Institute of Finance (IIF), the People's Bank of China (PBOC) and the Wolfsberg Group.

In this TechChallenge, the BISIH published three problem statements and invited private firms to develop technology solutions.

Problem statements

Trade finance platforms operate as networks where participant banks have access to customer data that are stored on the platform. However, the existing trade finance platforms run on different applications and technology solutions and have different participants - thereby becoming akin to "digital islands". This in turn is hindering the formation and maximisation of network effects. The aim of this part of the TechChallenge is to connect trade platforms, enable the interchange of information or make them more interoperable to increase network effects, but also to explore other means to increase network size. Possible technology solutions include amongst others:

  • connecting trade finance platforms through secure, authenticated exchange, accessibility, or portability of standardized data;
  • increasing bank participation on trade finance platforms through technology approaches that can reduce the liability risk of banks for data corruption and cyber risks;
  • facilitating access of corporates to trade finance platforms through portable blockchain/ DLT enabled digital identity, enabling KYC;
  • facilitating access for corporates to trade finance platforms through digitisation of company registries featuring APIs and connection to LEIs that platforms can leverage for KYC.

SMEs still have only limited access to trade finance, mostly as a result of data gaps or data silos. Increasingly, technology-driven approaches are being developed to bridge these gaps and reduce these silos, and thereby improve SME access to trade finance. The aim of this part of the TechChallenge is to improve trade finance inclusion for SMEs through technology, including through tech-driven SME risk-profiling, trade authenticity verification and fraud risk assessment. Possible technology solutions could include or combine amongst others:

  • novel technologies such as those based on internet of things (IOT), artificial intelligence (AI), machine learning (ML), federated learning, blockchain/ DLT or quantum computing;
  • leveraging non-traditional data such as logistics data (e.g. IOT data for trade authenticity), e-commerce data (e.g. trust scores), mobile payment and other transactional data;
  • a platform-based approach connecting different data sources (e.g. credit, accounting, banking, transaction, and non-traditional data) enabling public and private sector participants to improve SME risk-profiling, trade authenticity verification and fraud risk assessment;
  • a platform-based approach connecting SMEs to the financial institutions in the LEI database or connecting SMEs to large counter-parties to increase access to trade finance.

The trade finance gap is particularly acute in emerging markets. Many such markets do not yet benefit from tech-driven trade networks and platforms. Accordingly, these markets could greatly benefit from low-cost or open-sourced technology that leverages common standards (e.g. ISO20022, UCP600, etc.) to deploy trade finance applications. These applications could connect to jurisdictional infrastructures, such as automated single windows or implementations of the ASYCUDA software developed by the United Nations Conference on Trade and Development (UNCTAD). The aim of this part of the TechChallenge is to develop technology solutions that support trade finance functionalities for emerging markets. Possible technology solutions could include amongst others: 

  • low-end mobile devices with intuitive user interfaces that feature connectivity to public and private trade infrastructure; 
  • technology solutions that facilitate the development of open data and API standards
  • a platform-based approach that leverages the automated single window of one or more jurisdictions to connect to B2B services, such as trade finance; 
  • open-sourced technology solutions that support the establishment of national trade finance platforms.

The TechChallenge was administered by the Deloitte Asia Pacific Blockchain Lab.

Solutions were judged by a panel comprising representatives of the public and private sectors, including experts from the partnering organisations listed above and leading global TradeTech platforms. The winners were announced on 2 November 2020.

BIS Innovation Hub and the Hong Kong Monetary Authority announce TechChallenge winners

2 November 2020