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UAE Trade Connect (UTC), a trade finance platform to address the risk of double financing and fraud across the United Arab Emirates, is slated to go live in the upcoming quarter and expects a “few more” global banks to join the consortium.

Backed by eight local banks, the platform was developed by telecommunications firm Etisalat and tech company Avanza Innovations, together with First Abu Dhabi Bank (FAB), a collaboration that was formed in 2017.

The banks that have joined the consortium are Abu Dhabi Islamic Bank (ADIB), Commercial Bank International (CBI), Commercial Bank of Dubai (CBD), Emirates NBD, FAB, Mashreq, National Bank of Fujairah (NBF) and Rakbank.

“Several activities are progressing in parallel,” Anirudha Panse, managing director and head of trade product management at FAB told GTR at the GTR Mena conference held in Dubai last month.

“The working team of banks and Etisalat are working on a suitable structure that will operate the solution, which is in testing phase now. There are eight banks which have joined the consortium and we are expecting a few more global banks to join in soon,” he said, adding: “Once the testing phase is over, we intend to go live in Q2 2020.”

GTR understands that Etisalat will be the lead shareholder in the structure that will operate the solution, while a UAE-based group will take a stake and a portion will be available to banks to invest as shareholders.

Panse says that the development of UTC is predominantly driven by the eight banks and based on their jointly agreed requirements. “One of the thought processes that was very clearly defined when we came together as banks is that we need to be working together continually because we’ve got diverse experiences and views in terms of knowledge of the market – it gives us a much wider perspective about how UTC should be designed, built and operated.”

UTC allows banks to send invoice information into a private permissioned blockchain network through a node on the blockchain. This information is then run through Etisalat’s fraud detection system, which uses AI to check invoice data against other invoices and external sources for duplication and fraud. The solution could, for example, estimate whether the price of a certain good matches market prices.

“One of the nuances in the UAE is around SMEs, where there have been a lot of frauds happening within the banking sector withduplicate invoices being financed. The challenge for the banks is to detect this fraud,” Manoj Menon, head of global transaction banking at FAB, told GTR recently.

Panse says that the governance model is being reviewed by all eight banks. “There is a steering committee which meets on a regular basis and that steering committee makes decisions as required.” The committee will decide on pricing and each bank has one representative that sits on it.

GTR understands that UAE Trade Connect could connect to the Digital Silk Road, a smart platform being developed by Dubai Chamber in co-operation with port operator DP World and Dubai Customs, and is expected to go live in 2020.

The UAE has been ramping up its trade strategies as it prepares to host Expo 2020, which is scheduled to take place in Dubai from October until April. Touted as a global stage for business and with expectations climbing, there are fears, however, that the event could be delayed over Covid-19 concerns, which could prove a blow to UAE trade plans.

At GTR Mena, several attendees emphasised the attention the event would bring to the region’s business activity. Speaking on a panel, Svitlana Skrypnyk, general director at Kogex DMCC, said: “Expo 2020 is a chance for Dubai and the UAE, to create awareness and publicity around the region and inform the world of what we already know, that Dubai is a great place to do business.”

However, not everyone is convinced by Expo 2020’s potential to be a game-changer for trade, as the UAE already has established trading partners and performs a lot of transhipment. “The nature of these events is that they don’t tend to have a very long-term impact,” says Laura James, senior analyst for the Middle East at Oxford Analytica.