FRT welcomes Mike Hogan (MUFG) and Richard Chenga-Reddy (Standard Chartered), discussing Trade Finance as a business that’s ripe (or overdue) for innovation.
Mike and Richard highlight many of the opportunities to modernize the Trade business, while noting that its inherently cross-border nature creates unique challenges in implementing. Distributed ledger technology offers demonstrable technical benefits in connecting counterparties more efficiently, but implementation needs progress in global and regional frameworks, and addressing legal and regulatory requirements.
The use of smart contracts and digitized tracking of traded goods is already underway, with Mike highlighting a fascinating case study on a domestic basis in Japan, and the challenge then for how this model can be exported where different legal and regulatory systems apply. Future developments in tokenization (in various potential forms) may also impact the Trade business, and how we view the risk and regulatory profiles.