With the rapid evolution of trade finance, banks know they must adopt new technologies or be left behind, with no room for error. This is the reason LiquidX has rapidly become the fintech partner of choice for top trade finance banks, writes CEO Jim Toffey.


At LiquidX, we spent three years and US$50mn developing the best tech in fintech. We launched our next-generation platform during the pandemic, and in just nine months since the launch we have won mandates from leading banks, as well as corporates and trade credit insurers. When these players looked at the fintech market, they found LiquidX to have the most comprehensive tech platform, ready to help them solve their challenging problems.

How did LiquidX leap ahead? We started by visualising the future of the financial supply chain and quickly realised that participants in trade finance – banks, corporates, insurance companies, and others – are missing information, productivity, and time because they are not connected. Taking it further, it was clear that to productively interact, an end-to-end digital ecosystem was required. It was time for a paradigm shift.

Our developers and data scientists, working in tandem with business specialists from the worlds of banking, corporate treasury and trade credit insurance, mapped out a way to digitise and automate the entire working capital lifecycle and connect it to funding and insurance. Particularly for banks, our industry-leading technology allows them to overcome the limitations and inflexibility of legacy systems that cannot keep up with the speed of technological change. Banks face an uphill battle and impossibly long rollout calendars for digitising their trade finance businesses, reducing back-office costs and incorporating AI and data to enhance business intelligence. LiquidX has been a boon for bank innovation teams looking to keep pace.


The power of our InBlock digital platform

In order to create a platform where all participants in trade finance and working capital can interact with confidence and visibility, our first step was to connect suppliers and buyers through digitisation.

Game-changing digitisation is not easy. What is required is to take a “dumb” invoice, insurance policy or other asset that is static, and turn it into a living piece of software that knows what it is and where it is supposed to go. Using blockchain and modular digital automation tools, we convert these static, one-way inputs into interactive, smart data that can securely flow between counterparties for updating and processing. This is the real way to automate, and it is the future of e-invoicing.

This technology became the basis for our InBlock platform. InBlock ingests, digitises, and automates the management of purchase orders, invoices, insurance policies, loans, or any other trade finance assets, linking relevant parties via custom workflows for updating, modifying, servicing and analysing these assets. In the case of an invoice, InBlock can automate and validate it as it moves through the order-to-cash process, even connecting to monetisation and insurance. A bank lending against or purchasing the invoice would be able to know that it is valid and see all related activity. This level of visibility and transaction comfort is currently lacking for banks that participate in trade finance transactions.

In addition to invoice management, InBlock offers modules for payment reconciliation, cash forecasting, monetisation, and position and risk monitoring, each of which adds value to a trade finance operation. Bank front offices have a better view of the business and eliminate the need to manage with spreadsheets and email. Middle offices can clear trades easily via seamless connection into risk management. Back offices can originate and distribute more efficiently.


LiquidX 360 takes bank trade finance to the next level

InBlock enables digital connectivity between trade finance bank clients and their vendors down the supply chain, but that is only half the equation. On the other side is the need to distribute or protect these smart assets. This is accomplished on our LiquidX 360 platform, which empowers funders to transact with corporate clients in AR, supply chain finance, or inventory finance in a single platform, either as a complete white label solution or in a private environment. Funders welcome the platform’s proprietary legal framework, which gives participants access to all counterparties with a single master agreement.

For banks that utilise credit protection products, LiquidX 360 integrates with trade credit insurance and receivable puts. We automate quoting, cross-reference policy terms and conditions, authenticate the eligibility of endorsed buyers, and manage policy reporting requirements to help ensure compliance. Our platform provides insight and transparency into a policy, or portfolio of policies, on one centralised platform, regardless of geography, product or broker.

With digitisation and a fully connected trade environment comes an immense amount of data. To capitalise on this new view of the entire trading network, including insurance coverage, we developed a Position and Risk Monitoring module enabled by PowerBI, the most comprehensive cloud-based business information platform available.


More than tech

We are confident that we have the best tech in fintech, but it takes more than technology to be a great solution provider. In this regard, LiquidX has the know-how, stability and flexible structure that makes us an ideal fintech partner. Our team has deep bank and trading expertise, with experience in aligning product, tech and relationship management to achieve goals and launch new services. Our lead investor is Broadridge, a global leader in technology and operations solutions for the financial services industry. LiquidX follows the same Infosec protocols as Broadridge, which processes over US$10tn payments per day and counts 20 of the 24 primary dealers as clients.

Our modular “building block” design allows LiquidX to provide turnkey solutions with no development for our clients. For example, a bank can add new product functionality such as inventory finance or supply chain finance by customising the workflows already built into our existing tech. Finally, banks have the flexibility to choose how to implement our services. Our white label programme allows banks to build custom solutions that operate in the background, or we can be a resource for banks to purchase or sell AR, access secondary distribution, integrate credit protection, and reduce legal costs through our LiquidX 360 platform. We also partner for onboarding and servicing, depending on each bank client’s specific requirements.

Our fintech architecture has the advantage of being forever up to date and can be implemented in ways that complement a bank’s offering. This eliminates concerns about diluting or competing with client servicing. It also helps banks achieve their API strategy by creating the connectivity between banks and their clients. On the business side, we are helping banks remain competitive, establish new revenue streams and exceed client expectations.


Take a look

We often hear that we have the best tech in fintech. If you would like to see how our scalable tech can solve difficult problems or help you launch entirely new products to grow your trade finance operations, please contact me for a discussion and demo.

Jim Toffey is CEO of LiquidX, a provider of fintech solutions for financial institutions, corporations, and insurers to automate and optimise working capital, trade finance, and trade credit insurance. Jim can be reached at jim.w.toffey@liquidx.com.

Learn more at liquidx.com