The digitalisation of trade is a term that I'm sure we have become highly familiar with, especially over two years. I always find it interesting how times of adversity often breed periods of dramatic innovation and transformation. Once again, over the last three years, we have found ourselves facing unprecedented challenges on a myriad of horizons, which, from a Trade and SCF perspective, has placed banks, practices, and technology vendors under significant pressure to adapt and has accelerated the adoption of advanced technology-driven solutions. Adoption is a keyword here as the reality is that many of these solutions, or variations, were already in play, albeit to a lesser extent.

To recap on a memorable example of pressure-breeding ingenuity, let's go back in time to another significant tipping point in transforming the digital landscape for trade and SCF at least. Before the advent of the financial crisis in 2008, global trade was expanding at close to 10% per annum. The trend for the pricing of commodities was for prices to remain high. This meant that banks in emerging commodity-driven markets generated significant profits from trade finance operations and consequently needed to foster growth and had large budgets available to invest in the most flexible, reliable, and scalable trade finance processing systems. This overwhelming growth placed Banks and, once again, vendors under pressure to scale and adapt.

This pressure mandated our company and other Trade Finance vendors alike to innovate and grow. The key variables back then were “reliability” and “flexibility,” and to a large extent, this remains true. Trade finance processing is highly complex, relying on international messaging standards and often complex international trade rules: robust system architecture and the capability to do what was asked differentiated the winners from the losers.

By virtue of the pressure in recent times, which guided our aforementioned strategy, I am incredibly proud of the figurative diamonds that China Systems has produced, namely, the integration with numerous promising technologies that can streamline digital banking operations through optical Character recognition, intelligent document checking, digital representation, proof of originality and ownership of documents and through the functional and technical enhancements of our applications that allow more than 100 customers worldwide to run their Trade operations across a multitude of jurisdictions.

I see all of this as a journey, with the speed of travel accelerating and the final destination constantly changing. In closing, I recall the words of one of the legends of trade finance, Bernard Wheble, a former Chair of the ICC Banking Commission and drafter of the UCP400 rules for letters of credit.

“There is no need to reinvent the wheel - we need to fit it with new and better tyres.”

It is clear to me that these tyres function optimally when they are exposed to sufficient pressure.