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Trade platforms wars; Swift TSU service future: RMB progress

The trade services market continues to evolve at a rapid rate as the new blockchain based trade platforms sign up new members. While Swift ponders the future of their TSU service and reports on RMB progress.

LBBW joins Marco Polo Network

LBBW (Landesbank Baden-Württemberg)  has announced that it has become a founding member of Marco Polo, the largest and fastest growing trade finance network powered by Corda blockchain technology, which they claim, will bring significant efficiencies in financing trade.

Digitalization is one of LBBW´s strategic priorities, and therefore the bank is among the pioneers in using blockchain technology in Germany. In 2017, LBBW has set benchmarks in the market through issuance of a digital Schuldschein together with Daimler. Becoming part of the Marco Polo Network is the next step in improving banking services for LBBW’s customers by technological innovation.

LBBW joins Marco Polo as the first member of the German S-Finanzgruppe. By joining Marco Polo, LBBW becomes part of a growing list of banks including BNP Paribas, Commerzbank, ING, Standard Chartered Bank, Natwest, Natixis, Bangkok Bank, SMBC, DNB, OP Financial Group and Anglo-Gulf Trade Bank.

(Marco Polo is a bank focused network of platforms offering corporate facing applications. These ERP-embedded and standalone Working Capital and Trade Finance Apps give corporate clients access to multiple working capital and trade finance solutions directly from within their ERP system, reducing integration costs and risks. The Marco Polo Network also provides banks and corporate customers digital access to the broader working capital and trade finance ecosystem participants such as insurers, logistics providers, non-banks, and information providers as well as connectivity with other business networks.)

SWIFT TSU service

Global Trade Review reported on 23 November that SWIFT is in talks about the future of their trade services utility. Apparently, “Swift says it is “in discussions” about the future of its trade services utility (TSU), the centralised matching and workflow engine that operates as the backbone for the bank payment obligation (BPO).”

GTR report that “Commercialised by Swift in 2007, the TSU was originally created to improve the flow of information in the supply chain. The service matches data in items such as orders, invoices, and transport documentation, allowing banks to re-intermediate across the value chain in open account trade. Adoption, however, was initially slow, and it was not until the introduction of the BPO in 2013 that the inter-bank matching application seemed to have found its raison d’être.”

Speaking to GTR, Marc Delbaere, head of corporates and trade at Swift, says: “TSU is, at its core, a matching platform. It is the only matching engine run by Swift, and it is currently only used in trade finance and only for the BPO, so we believe that looking at partners with further adjacencies can only strengthen its value proposition.”

Apparently, essDocs could be one of their partners.

RMB falls to #6 in currency rankings

In October 2018, the RMB has dropped one position to #6 in the currency rankings for domestic and international payments by value, with a share of 1.70%.

Swift believes that, “This month’s decrease is likely due to seasonal effects following the Golden Week holiday in China in October. The Canadian dollar has overtaken the RMB as the fifth most active currency with a share of 1.79%. Overall, RMB payments value increased by 0.12% compared to September 2018, whilst in general, all payments currencies increased by 10.92%. In terms of international payments only and excluding payments within the Eurozone, the RMB still ranks eight with a share of 1.01% in October 2018.

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