Tiidan, an Israel-based fintech company, is rolling out an artificial intelligence-powered solution to help importers, banks and insurance companies better assess risk on Chinese trading partners.
South Africa’s Standard Bank is among the first financial institutions to implement the application.
Founded in 2017, Tiidan spent last year building and piloting its new solution and has now started deploying it in production with clients.
The tool helps companies around the world assess the probability of default on suppliers in China, and soon also other countries in the Far East.
Speaking to GTR, Yaron Shapira, CEO and co-founder of Tiidan, says the startup is seeking to provide a technology-driven alternative to traditional business intelligence companies.
“The biggest problem for importers is not with the operations or procurement phases,” he explains. “We understood that a huge gap in the market today is in the data itself – the inability of customers to get information about their business partners. One of the options would be to go to business intelligence companies, but in the Far East, especially China, their ability to deliver is limited: it will be an expensive process, it will take about two weeks and the data received would be limited and not up-to-date in many countries.”
Instead, Tiidan’s AI tool automatically collects, scans and structures data from a large number of web-based sources: anything from information on shareholders and capital to legal cases, media coverage and certificates. A user will only have to put in the name of a potential Chinese trading partner. In return, the solution will provide a report with information on potential risks associated with the supplier and set up automatic alerts for any future changes to this risk profile. Tiidan’s AI algorithm has also been trained to predict the probability of a supplier to fail or succeed. All of this in less than an hour.
Tiidan is targeting importers who wish to use the platform to assess the risk of new trading partners, as well as financial institutions and insurers supporting cross-border trade with the Far East. Among its clients is Bunzl, a UK-based multinational distribution and outsourcing company, and Pernambucanas, one of the largest retailers in Brazil.
Shapira says Tiidan has now expanded its remit to work with companies based in the Far East who find it equally challenging to access information about counterparties in neighbouring countries.
One of the fintech startup’s first bank clients is Standard Bank in South Africa, which has been piloting the solution with selected companies and is now planning to roll out the product to all corporate customers.
“We are specifically targeting clients importing from China,” Darren Segal, executive, personal and business banking innovation at Standard Bank, tells GTR. “Particularly smaller businesses – where suppliers typically demand a deposit from them pre-shipment – they don’t have the expertise and capabilities to go and understand and manage the risk. We do a lot of outward payments and have started analysing that data by putting it through the pilot engine, and we are seeing that there is a percentage of Chinese suppliers being paid deposits pre-shipment where we believe there is risk. We are now thinking about what we do with that information. As we get more confident with the technology, we can be more proactive and take more action.”
Currently, Standard Bank is offering Tiidan’s solution as a value-added service for its clients, but the bank will now be looking at how it can use the data to optimise its own processes and products, including trade finance.
“If we can use this information to extend credit or more finance to a client, we’d love to do that,” Segal says. “It’s too early to say if we can or can’t, but that is exactly the sort of thing that we will be exploring as we learn the power of the technology.”
According to Shapira of Tiidan, the idea is that banks can use the service in their own risk assessment and onboarding processes. This should ultimately give them confidence to support more cross-border business than they do today.
“When a bank needs to transfer money to or receive from China, for example, compliance requires the bank to do KYC and to prove where they get this data,” Shapira says. “Getting this information today is a very long and painful process for the bank and its clients. The bank asks for documents, the clients need to provide the documents, sometimes they need to ask their business partner in China to provide documents. It is not just a pain, but also very slow and expensive.”
Apart from targeting importers and financial institutions, Tiidan will also be launching an insurance product within the next few months, which specifically seeks to help insurance companies underwrite risk in the Far East.