Technology giant IBM is once again venturing into the realm of trade digitisation, armed with lessons learned and a revamped strategy following the high-profile failures of two of its flagship initiatives.

The IBM Connected Trade Platform, unveiled during the Sibos event in Toronto, is based around an ‘as a service’ business model that integrates capabilities from a range of fintech players into a mix-and-match offering that banks and corporates can consume as a one-stop managed service.

This co-operative ecosystem approach stands in contrast to the more siloed models of, a blockchain-based platform for open account trade owned by 12 European banks and IBM, which collapsed in June last year after failing to reach scale, and TradeLens, an IBM and Maersk joint venture that struggled to achieve buy-in from the competitive world of containerised trade and closed its doors in November 2022.

The development comes as the remaining trade digitisation projects in the market continue to grapple with incentivising adoption, ensuring a proper product-market fit and creating a sustainable business model.

At Sibos, GTR sat down with Ravesh Lala, IBM’s head of business development for hybrid cloud solutions, to understand the motivation behind the company’s re-entry into the digital trade space and learn more about its attempts to create more successful and resilient initiatives moving forward.


GTR: During your ‘Digitalisation of trade and supply chain finance’ workshop at Sibos, you said IBM is seeking to become the “orchestrator” of trade digitalisation. What does that entail, and why is trade important to IBM?

Lala: IBM might not be the first name that springs to mind when considering trade finance, but many trade finance banks already utilise our software and infrastructure across various IBM businesses.

Trade, as a business process, is perhaps one of the last areas yet to be digitised, and the complexity arises from the variety of stakeholders involved. On one end, you have buyers, and on the other, suppliers, with banks, logistics and insurance firms nestled in between. Each of these entities operates with their distinct processes.

No single bank can unilaterally digitise the entire trade process from end to end since each bank typically focuses on specific segments of the process.

Banks have begun their transformation journey in trade by collaborating with fintechs, but working directly with a small fintech can be quite challenging since they often lack the necessary bandwidth and capacity to engage with banks effectively, primarily due to the lengthy and rigorous certification and compliance processes instituted by the banks.

We have made a significant upfront investment in this area by introducing the IBM Cloud for Financial Services, which is designed explicitly for the financial services sector from the get-go and incorporates all the necessary security, compliance and regulatory obligations that fintechs would need.

When applications are built on our infrastructure, they inherently acquire all its attributes, which is our primary value proposition to fintechs. Secondly, in the realm of trade finance, no single fintech is fully digitising trade from end to end. By uniting various fintechs under a common platform and architecture, an end-to-end digital solution effectively comes into existence.

GTR: This approach of developing an infrastructure upon which others can build applications to digitise trade is not new: R3’s Corda platform has been used in a similar way for initiatives such as Contour, for example. With trade digitisation solutions struggling to achieve scale, what makes your approach different?

Lala: This structure isn’t solely about the infrastructure; it also involves AI, automation, integration and process management, which collectively constitute the operations layer. While each of these are discrete technologies within IBM, think of a scenario where a buyer in Brazil is engaged with 200 suppliers and interacts with two or three different banks. Each bank has its distinct format for receiving invoices from these numerous suppliers, leading to extensive paperwork and complexity.

We have the integration technologies capable of receiving messages from various sources, discerning their destinations, converting them as necessary, and forwarding them to the appropriate banks. This system ensures that banks receive invoices and purchase orders digitally, facilitating a smoother, more streamlined flow of information and paving the way for true digitisation. Working in tandem with significant partners like SAP, this approach allows for the automation of transactions and a more efficient process overall.

We aim for our clients to consume this as a managed service. The key issue here is how to lower the barrier of adoption, considering that no one is prepared to invest US$100mn into trade digitisation anymore and executing individual contracts for each service isn’t feasible.

This is where we at IBM come into play. We are creating a vertically integrated stack for trade finance, utilising the different layers of IBM’s offerings, and presenting this as a managed service to end clients through our consulting arm. By packaging various technologies and services together and offering an end-to-end solution, the cost of adoption for the individual fintech or software vendor is significantly reduced. We can be the front end for all of them.

GTR: Which fintechs are you working with, and what is the business model? Are you investing in these entities?

Lala: We are working with various independent software vendors, including Cleareye, Finastra, Kanexa and TradeSun. These fintechs didn’t initially build their businesses on our platform; they developed their own application stacks, but now that they understand the power of our ecosystem strategy, they are beginning to migrate towards it.

We aren’t taking stakes in these companies. While we might have invested in one or two companies three years ago, it’s not a strategy we’re pursuing actively. These companies collaborate with us because they understand and appreciate our platform and ecosystem strategy. Our focus is not on pushing specific products; instead, we are committed to solving the complexity of trade digitalisation, bringing along an ecosystem of partners to achieve this objective.

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