Frankfurt and London – Tradeteq together with Commerzbank AG, AKA Ausfuhrkredit-Gesellschaft mbH, and Texel Finance Limited have announced that following a successful proof of concept phase, Tradeteq Connect, an expansion of the firm’s existing platform to support distributing bank risk resulting from trade products such as letters of credit (LCs) and guarantees, has been implemented by Commerzbank AG, AKA, and the Texel Group and shall become the new technology standard for trade asset distribution.
By establishing this new technological link between them, Commerzbank, AKA, and the Texel Group form the nucleus of the Tradeteq Connect network of grantor and participant banks as well as insurance carriers and brokers. Additional banks and credit insurers will now be selectively invited to join Tradeteq Connect.
Tradeteq Connect provides trading automation, limit system, and network-as-a-service for participants to trade within their own private network with counterparties they choose. Where previously this process relied on spreadsheets, Tradeteq Connect is a single system that can handle the full distribution chain end-to-end in one place.
It’s the first tailor-made bank-to-bank and bank-to-credit insurer distribution tool and it offers Tradeteq’s global network of users the ability to seamlessly and securely connect, interact, and transact. Tradeteq Connect reduces the dependency on manual workflows and error-prone processes, eliminating friction for streamlined distribution. An intuitive dashboard highlights the most important information. Automated notifications make sure institutions are fully in control of opportunities, events, and deadlines. And with full API integration, which should always be the ultimate goal of the implementation, users can continue to work in their familiar environment.
Tradeteq Connect runs on Microsoft’s Azure cloud, the world’s leading cloud platform. Tradeteq Connect gives institutions the same security, privacy, and compliance protections that are used by global banks and 95% of Fortune 500 companies. By holding data in their own dedicated ‘Tradeteq Pod’, located in one of 61 regions across the globe, Tradeteq Connect users can meet even the most demanding data residency, compliance, and resiliency requirements. Tradeteq Connect allows users to stay fully compliant with their country’s or region’s legal and regulatory requirements on location of their data.
Tradeteq Connect not only vastly improves bank-to-bank distribution of core trade but it also enhances the capability of distributing other trade finance products such as receivables and supply chain finance to other investors. This will help to close the USD 3.4 trillion trade finance gap, that was highlighted in a 2020 ICC study, thereby supporting smaller businesses that previously would have been unable to receive the finance they need.
Nikolaus Giesbert, Divisional Board Member Institutionals at Commerzbank, comments:
“In line with our published strategy, we continuously seek to automate and digitise our processes. Our collaboration with Tradeteq will allow us to achieve these goals and thereby to reach a broader, deeper and more differentiated investor base for trade finance risk.”
Mario Messerschmidt, Head of Structured Finance & Syndication at AKA, adds:
“Cooperation and empowering our partners as a complementary, non-competitive enabler and solution provider was the reason for AKA’s foundation in 1952, and still is today.
“Our agenda: facing the challenges, but even more using the chances and opportunities the digitalisation has to offer. Within an international network of strong trade finance banks and companies, we are serving our partners by developing and supporting digital solutions like SmaTiX and the Tradeteq platform, but also investing our risk capacity in ventures of our partners.
“The pandemic crisis discovered very clearly shortfalls in efficiency due to the lack of digitalisation in trade finance. The Tradeteq solution is able and ready to solve the risk distribution task by providing a high efficient platform solution. AKA is very proud to become a part in this new standard in trade finance risk distribution, with an outlook that goes far beyond that.”
Simon Bessant, Global Head of Insurance at the Texel Group, said: “The credit insurance market can provide banks with a deep pool of risk sharing capacity to help them manage balance sheet concentrations and capital adequacy, but inefficiencies in the traditional insurance processes need to be overcome to truly scale the support available from the credit insurance market. Connect allows banks to distribute trade finance assets to insurers in real-time, with insurers able to manage their exposures using rules and eligibility-based controls bespoke to each bank. Texel’s opinion is that Connect will help to remove current credit insurance market inefficiencies and allow banks, credit insurers and brokers to build deeper and more dynamic relationships with each other.”
Nils Behling, Co-Founder and CFO of Tradeteq, said: “Innovations in trade finance technology are making transactions easier to conduct, more efficient, and less reliant on error-prone manual processes. Through Tradeteq Connect we help close the trade finance gap, providing greater connectivity between banks and other institutions. We look forward to working closely with Commerzbank AG, AKA, Texel, and other forward-thinking institutions to continue to evolve the trade finance sector for the better.”