GlobalTrade Corporation (GTC) has announced that it is developing the Trade Finance Exchange Platform (TFX). The platform is designed to simplify the price discovery process between corporations and financial institutions and create a digital trade finance marketplace for trade assets. TFX will be integrated with GTC’s existing @GlobalTrade Multi-bank Trade Finance Management Platform used by corporates and financial institutions globally since 2004 for management of payment instruments used in international trade. TFX is being developed in consultation with three global corporations: Baker Hughes, Lindner Group and Siemens AG, and three global banks: CA CIB, HSBC and Standard Chartered.
"[Our clients] wanted request for proposal (RFP) functionality to be integrated with our trade finance management platform that they are using daily for processing guarantees and export documentary credit business," said Jacob Katsman, GTC's founder and chairman. "The idea of a web-based platform, where corporates can submit to financial institutions requests for pricing on trade finance instruments, was originally introduced by LC Connect in the United States in 2002. In recent years, several trade finance marketplaces emerged with a similar idea. The problem for corporates using these marketplaces is that they are stand alone and are not integrated with a trade finance management system. This is where the GTC solution will be different."
Siemens has joined two other corporates and three significant bank partners as a member of GTC’s initiative. In 2012 already, through extensive research, Siemens identified several relevant key factors that are essential for the success of an RFQ platform.
"At its core, of course, an RFQ platform must be driven by corporations with a large volume of transactions and should contribute to internal and external process optimizations, as well as provide a system-integrated audit trail," said Gerhard Heubeck, head of Trade Finance Advisory at Siemens. "But on top of that, it needs to offer value-added services also to financial institutions that would encourage their cooperation. According to the criteria we’ve defined in our research, the tight collaboration within this initiative fulfils the needs of both corporate and financial institutions."
TFX is scheduled to go live in 2020.
Like this item? Get our Weekly Update newsletter. Subscribe today