Bolero is making changes to its strategy in a bid to fulfil its original goal – set two decades ago – of dematerialising trade.
Bolero was launched back in 1998 as an EU-funded research initiative to enable the dematerialisation of cross-border trade processes. GTR speaks with its new chairman, Dani Cotti, who has big plans for Bolero’s future, through a process he calls “the most serious attempt ever to digitise trade”.
GTR: How is the new strategy different to the company’s historical approach?
Cotti: At the moment, Bolero delivers a secure, cloud-based messaging platform.
We have five key assets to build from in executing our strategy. Number one is obviously the secure cloud-based messaging platform. Number two is the title registry. Number three is the matching engine. Number four is the rulebook, which all of our members have signed up to. It clearly outlines all of the legal rights and obligations of all of the parties. Number five is that we have over 100 XML trade document definitions that we exchange in our system.
If you look at trade, there are four activity areas. You have the physical goods, the trade instruments and documents, the networks and service providers, and the whole financial arena with risk transfer, funding, liquidity and payment. We are providing connectivity and messaging around all of this for buyers and sellers. At the moment, we are actively involved with LCs, guarantees and e-presentation as well as functionality supporting open account document matching. Our vision is to become active in the whole trade circle. There are e-collections, e-settlements, e-finance, e-goods release/ownership and, ultimately, an e-trade exchange. It is a very different world.
Whoever wants to digitise trade has to deal with these facts and build some of this. The good thing about Bolero is that we have the supporting components that we can combine to deliver solutions.
We are going to build this out over the next three to four years: this is obviously a long-term, strategic push.
We have two solutions to start with. One is called electronic collections. With documentary collections, you can ask any bank around the world and they will tell you it is more or less all done manually. Physical documents are being put in an envelope and sent, either directly to the collecting bank, presenting bank or via the remitting bank. We can do this electronically. It is the same principle as in e-presentations. The seller comes with electronic documents. We pass them over to the remitting banks, the presenting banks and the buyer.
The other is electronic contract settlement. The buyer loads up purchase orders and these are presented to the seller. The seller submits an advanced shipping notice which we match against the purchase orders and produce supporting trade documents.
GTR: What is the ultimate goal?
Cotti: Over the last 15 years, various attempts have been made to digitise trade. Progress has been made. A network, and assets, have been built, which did not exist before. Now is the time to leverage these assets, together with the new world of digitisation and the new technologies. Whether you use distributed ledger technology for this or not is a secondary thing. It is an enabler. It does not change the commercial aspects of it.
Our ultimate goal is the digitisation of global trade by taking a buyer/seller-centric approach to the settlement of commercial contracts. We see the integration with banks, adjacent space applications, networks and technologies as being pivotal to the achievement of this vision. Bolero has unique attributes that enable this to happen and we are working to bring this to market.
GTR: In what ways may your efforts be hindered?
Cotti: Teaming up with the wrong parties. Bolero is a small company but growing from the current base of around 30 people. We are opening a branch in Shanghai, and we have invested in growing our team in Singapore and the UK. Our success will come from having the right people and partnerships in the right places to execute the strategy.
GTR: How will you measure your success in the future?
Cotti: In five years, my vision is that we have signed up B2B networks to substantially grow the Bolero ecosystem and deliver end-to-end contract settlement capabilities. We are starting from a strong domain expertise in some assets, and we are building up solidly as we go along. We know that we cannot do it alone, so we need partnerships with complementary organisations and especially the banks. What we know is that we do not want to become a payments processor or a supply chain funder, we will inter-operate with these adjacent services. Trade is made up of a whole series of trigger events and alerts that can be digitised and routed to the right parties to facilitate transaction completion. There are solutions that are excellent and state of the art. But ask anyone the question: ‘What happens after it? What is the output?’ I guarantee you that the output is an email, or a fax or somebody keying the data into another system. We are combatting that. We are connecting the parties, without taking away anything from anybody. I think that is the key strategic and philosophical approach that I would like to get out there.
We are a non-threatening partner in this digitisation role. The banks do what they do. Insurance companies do what they do. Buyers and sellers do what they do. We are just connecting them and making the process more efficient. Basically, the value proposition is improved cashflow and working capital, whilst increasing efficiency, quality and security. The security aspect is obviously important and we continue to invest in the Bolero platform in this area.