From traditional lenders to emerging fintechs, the pace of trade transformation is rapid and accelerating. In this virtual roundtable discussion, leading supply chain finance fintech Demica invites a group of influential experts from the global banking sector to discuss what is driving technological investment in trade, strategies for successful projects and partnerships, and how to align the interests of competing stakeholders within an institution.


Roundtable participants:

  • Leonardo Baccala, global head of trade product development, trade and working capital solutions, Citi
  • Maurice Benisty, chief commercial officer, Demica (chair)
  • Mencía Bobo Aritio, global head trade and working capital solutions, Santander
  • Madhav Goparaju, managing director, global head of digital transformation, Global Transaction Services, Bank of America
  • Dominique Honore, global head of products and structuring, cash management and global trade finance, Crédit Agricole CIB
  • Oliver Petersen, global head of trade advisory and structuring, ING
  • Bhriguraj Singh, chief product officer, global trade and receivables finance, HSBC
  • Michael Sugirin, managing director, global head open account trade, Standard Chartered
  • Rogier van Lammeren, managing director, head of trade and working capital products, Lloyds Bank


Benisty: The theme of this discussion is trade transformation. At Demica we’re a part of that, and we work mainly with large trade banks across the full suite of open account, or supply chain finance, products. These include structured and unstructured receivables, payables and distributor finance. We’ve been fortunate to work with many of the banks joining today and have seen what we believe is a wave of trade transformation initiatives. Why are we seeing more of these transformation projects coming about? Is trade making its way up the agenda in terms of investment priorities for banks?

Sugirin: The speed that trade as an industry has moved is amazing. Just a couple of years ago we were talking about Covid-19 and disruption of supply chains, about data as the new gold, and now generative AI has taken centre stage.

All these events essentially force us to think differently about trade.

Our clients are telling us that they are seeing the sea change too, because trade has changed from moving boxes into moving ones and zeroes. My favourite example is from a receivables transaction a couple of years ago, for a movie studio that was selling content through streaming and its need to accelerate its receivables. This was not an industry 10 years ago and is an example of how our clients’ requirements are changing.

Clients, regulators and internal stakeholders are also pushing us to transform. The usual answer is to try to go digital, move from paper to electronic, but really we’re all looking forward to the day that the entire client journey becomes completely intuitive and seamless.

Honore: Investment is central to developing digital solutions and we have a dedicated investment budget for trade transformation. We started a few years ago on traditional trade; the idea was really to have a single back-end system across the whole network, a unique golden source of data so that we could provide clients with a harmonised view of their trade finance operations across the globe.

The project to provide access to centralised data on all trade finance activities is now completed, and it has changed the way we operate and interact with clients. Of course, we also have an enhanced focus on value-added services compared to normal operational business; we have benefited from having a harmonised and open architecture, to connect additional new services on top of a strong back end.

This project has been prioritised because it was a strategic development for the management of our clients’ working capital. CACIB has strongly pushed the decision to move forward into that transformation.

Singh: Client needs have been changing – where they trade, how they trade, how they respond to disruptions – and clients expect us not just to respond but to deliver based on this, consistently across our network, and to be able to drive change rapidly.


Benisty: If commercial benefits and growth are top of the list, what would be a close second? Do you think that by driving trade transformation and broadening capabilities, you are able to access new markets, and that in itself drives trade up the priority list for a bank?

Bobo: I think embracing trade transformation leads of course to opening new markets and new segments of clients that we may not have been covering before, so trade transformation is also contributing to closing the trade finance gap. And even within our traditional pool of clients, there are emerging needs that we need to tackle, for instance, the boom in B2B e-commerce.

However, to me, being committed to lead the trade transformation is not only a driver for growth, but an absolute necessity for the survival of our trade finance business. Clients’ needs have changed, the environment has changed, and if we are not able to anticipate these changes and take the lead in this transformation, we will be sentencing our business to death. So yes, it’s an opportunity for opening up new business, but it’s also the only way to keep the trade finance business running.

A second priority for many of us is capital efficiency. At Santander, investing in trade transformation also comes with a focus on being more efficient around capital use, which is a scarce resource for all banks. And this means having the right risk models in place, which is all about getting and understanding the data, for which the digitisation and automation of our internal process is key.

Honore: Being able to accompany our clients in their own transformation would definitely be a second benefit. Large corporates are focusing on efficiency, seamless processes and how to optimise their scarce resources, which explains the greater adoption of working capital solutions. CFOs and treasurers are looking to improve their cash position and reduce financial costs, especially with the current high level of interest rates.

The main corporate focus is also to operate in a safe environment. It’s crucial for companies to avoid fraud, international sanctions and anti-money laundering risks, so any solution that helps in achieving this will be welcomed by the clients.

We have seen during the Covid period that procurement is key and an increased need to secure the supply chain has emerged; supply chain finance programmes, during and after implementation, achieve this goal by reviewing internal approval processes, ERP invoice management and supplier validation, making the investment totally relevant.

New regulations are also triggering digital changes. In France, there is a new obligation for companies to issue and accept electronic invoices, which should be up and running next year. This is a huge transformation that companies have to make, which will lead to the development of additional services around supply chain finance and receivables finance, and accelerate the digitisation of trade.

Baccala: Several industries are working on their transformation to address the market changes and financial services is no different. There has been a huge transformation in the market. Customer behaviour has changed dramatically in the past few years and customers want to take the same experience that they have in their personal life, with e-commerce for example, and bring it to their organisation.

Transformation in trade is related to growth, revenue and managing capital more efficiently, but looking at those KPIs from a different perspective, you can also consider they are consequences of having customer experience at the centre of the transformation.

We need to ensure we can respond to the challenges our clients are facing.

The geopolitical situation is a challenge, supply chain flows are changing to accommodate recent issues, emerging technologies are coming up, and the pace of adoption of new technologies is completely different even from just a couple of years ago.


Benisty: In some ways, there’s a temptation to rebuild what you have, but patching up legacy technology is unlikely to drive new outcomes for customers. What measures of success are you deploying, and are you starting to see some of the returns come through?

Baccala: There are some important drivers to watch when measuring the results of a transformation project. You need to have the customer experience at the centre of digitisation, otherwise you’re just spending money without focusing on returns. You can measure the results on business drivers like revenue, operational efficiency and capital management.

You can also track the efficiency of your transformation project from an investment strategy perspective. There are some questions you must answer such as what is the percentage of your investment that is building out new infrastructure? What’s the percentage of investment in new products and customer experience? The strategy of your technology investment is another way to measure the execution of transformation.

Van Lammeren: We spend a lot of time with our clients, both the buyers and suppliers we onboard as part of supply chain finance programmes, for instance, and take onboard their feedback. Whether it’s qualitative or quantitative feedback, pre-change or after-change, that means we can understand how we’re doing and whether the change that we’ve implemented has had a positive effect on them.

We’re also thinking in terms of processes, and the time it takes us to do things. Before we went on that transformation journey with the Demica team, it could take us up to 45 days to onboard a supplier onto one of the supplier finance programmes. Now, provided we have all the information we need, we can do it in a day.

Of course, improving that efficiency is to the benefit of our clients, but it also benefits ourselves in terms of the operational headcount and the resources that we put into trade products. Ultimately, if we can better support our clients, then existing and new clients will be more interested in talking to us about their needs.

Petersen: We have to be very mindful that in order for our clients to take on additional services, they need to have the capacity to do that. Sometimes you can have a great idea, but our clients may not have the bandwidth to go and actually engage in it.

In improving the quality of our existing services, and potentially also restructuring some of our programmes or enhancing some of the underlying structures, our clients can be more efficient, meaning that they can take on more products, more services, and we can both grow.

It becomes mutually beneficial.

To give an example of where we see better services that have a slower pace of adoption, sustainability is near and dear to our hearts, and we’ve rolled out a number of successful sustainable programmes in the SCF space, the receivables finance space and the traditional trade space. But adoption is still not at the level one would expect, and the reason why is clients also need the capacity and the internal alignment to make these programmes successful. More and more clients are realising that, and so it’s crucial to improve the quality of service.


Benisty: We’ve talked about the commercial drivers of these transformation projects, but you really do need operations and procurement technology on board, and you can end up with quite large project teams. How do you balance these functions, and manage potentially competing interests within a bank?

Baccala: This is not a new problem. This dilemma, on how you manage expectations from different areas is very common and you need to be clear on what the goals are. I’d highlight three main ways to manage that. First, as mentioned before, you need to have your customer at the centre of the transformation, and make sure you have every player in this transformation completely aligned to that.

Second, you can’t just talk about technology without discussing your organisation, and you can’t talk about your organisation without thinking about process efficiency. These pillars – people, process and technology – are critical in any kind of transformation.

Third, you need a structured line of thinking and a methodology to apply, so you can implement your project with a good level of engagement across different areas. In the past, there was a gap between commercial teams and technology teams, and that is something that is changing. That’s not going to happen overnight; it needs a change in terms of culture and mindset, and a methodology can help with that.

Bobo: This dilemma affects not only projects but also our day-to-day business. To tackle this, at Santander CIB we have created business lines that cover processes end-to-end, with a designated person that is responsible for the entire business line and thus has to ensure that all the different parties are aligned during the project. Therefore, we have all the different areas involved in a project – IT, sales, risks, regulatory affairs – all aligned in the same business line so that we can work as a real organisation and not as silos.

Thanks to this new model, we’ve got people working in the same direction and avoided conflicts of interest between the different stakeholders. The challenge is that you need a certain scale to implement this setup. We cannot replicate it in small business units, but we are implementing it successfully within wider areas such as receivables finance, supply chain finance, and so on. And it is really working for us.


Benisty: Moving onto fintech partnerships, what works and what doesn’t? Can you give some colour on how the journey has evolved, and what do fintechs need to have at front of mind when entering into partnerships with banks? 

Petersen: Within the trade unit, we work with various fintechs across the globe, both from a technology and a sales perspective. The key driver here is trust and understanding their strong points and their weak points. That means no over-promising, on both ends, and how you handle setbacks is key. Instead of finger-pointing, it’s about how quickly can you sit down and really get to the issue at hand.

As your overall traction and track record builds, so does trust. We’ve worked together with Demica for the past 10 years and recently had great success migrating to the new platform on the supply chain finance side, which we use as the front end for some of our global cross-border solutions. If there are tidy-up points that emerge after the fact, that’s where the trust comes in.

Van Lammeren: I would talk about trust and confidence as well. It’s amazing to see the large number of fintechs that are active in the trade space. Trade is in effect ancient, some of these products go back hundreds of years – promissory notes even back to Babylonian times – but clearly the way in which they are delivered has changed, and needs to change more going forward. That’s really what we are focused on.

In the past, we’ve always tried to solve that alone, so build a new platform ourselves. We’re not a technology firm, and we’re subject to different processes, governance, constraints and so on. Going forward, we’ve adopted a shift in mindset where we would much rather partner with someone we know well, whom we trust, and who can choose to be by the side of our clients just as we are. That has helped us deliver successes, not only in the supply chain and receivables finance space but also on the traditional trade side where there is a lot of paper-based activity at play.

Baccala: We cannot avoid partnerships especially in transformation initiatives. We’re seeing more and more partnerships that can really help to transform our business.

You need to make sure you have a balance, by having vendors and partners which help you build new capabilities while transforming legacy infrastructure. Integrating those different worlds is not an easy challenge, and it’s going to move as we go along, but there is no way of doing transformation without looking around and bringing partners together.

Honore: There is plenty of choice in the fintech world today, so the difficulty for a bank is to find the right solution and the right partner. We have seen examples of multi-bank platform solutions that have not really been successful, and not found their market. We absolutely need to have pilots and trials to really test the benefits of any new vendor or fintech because not all the solutions will fit in with the bank.

All solutions might seem like they are adding value and you can make mistakes if you are engaged in an innovation dynamic. Spending resources and time piloting a solution will help in making the right choice. Our position at CACIB is primarily to follow clients’ choices, which can be multiple. This requires an open environment or architecture to be able to plug in a large number of solutions and try them out. We did that with Demica’s supply chain finance platform and it was successful.

Then, in some niche areas, we can go further in the co-operation and invest in solutions, because we are confident it will bring value to our business. This is what we’ve been doing with Komgo in the commodities sector – and now in the wider trade finance sector – and it has also proven successful.

Goparaju: You have to approach trade digital transformation holistically. At Bank of America, our objective is to create operating leverage that is sustainable and commensurate with the growth of the business. Supply chain finance, being a growth area, is where we see the value of introducing new product innovations that will drive revenue. With traditional trade finance, there are numerous inefficient processes that are inherently costly since many involve redundant and manual work.

Technology can help reduce if not eliminate those inefficiencies and improve operating leverage.

The challenge, however, is that there’s no single technology partner – and likely never will be – that can deliver everything we need for every interaction. We ended up having to bring together mature technology partners and younger fintechs to create an end-to-end digital experience for our clients and related partners.

We went into our transformation efforts knowing that it was an extremely high probability – given our desired time frame and the proliferation of new technologies – that we’d be looking to acquire the technology and not build it ourselves. What we’re aiming to achieve requires a scale of technologists, new innovations and skillsets that only exist in the tech sector.


Benisty: Switching to delivery of trade transformation, how do you drive stakeholders to an end state, and what are the stakes in terms of what they are looking to achieve? How do you think about that journey internally?

Sugirin: For me, it starts with the problem statement: what is it we’re looking to solve? As mentioned, the client is at the heart of everything we do, and looking at transformations large or small, what really works well is putting this into bite-size steps rather than trying to tackle everything at once.

So you can look at what is going to give the biggest bang for your buck, then underpin that with the real voice of the client. With the technology available to us now, we’re able to drive a lot more real-time feedback and get more insights as part of the development cycle, and that’s helpful throughout the execution of a project.

Stakeholders across different siloes must sign up for this, since if you have one loose end, one weak link in the chain, it could fall apart. You might have technology teams that believe they can build it better compared to taking in a vendor, and that is challenging.

If you can create these integrated hives, for instance having someone from the commercial side, someone from the technology side, from a channel, from operations, then you will achieve success quickly. Along the way, you need to make sure you celebrate successes and take the entire organisation along with you.

Goparaju: Internal stakeholder alignment is a challenge in itself. For a project of this scope, you’re pulling in people who have other full-time jobs. Therefore, you need to be adept at building a framework where you can effectively drive the project, reach milestones and generate ownership. We’ve had the best results in fact when the stakeholder teams come up with the ideas themselves. It’s much more powerful to have them proposing ideas rather than us – as perceived outsiders – having to push them down.

To make that happen, you need to have a common understanding of what the end state looks like. Everyone agrees on the need to transform, but there are obviously many ways you can do that. We dedicated a lot of time to building consensus around the project’s design. That upfront investment has paid dividends and built a strong sense of ownership.

That’s essential for a large bank like ourselves where there are built-in speed bumps to ensure we are meeting the respective governance, compliance and risk management tollgates. It’s not possible or desired to suddenly change tack. It takes time to get moving, so building a commitment to the task and path is foundational to the project’s success.

One other lesson we’ve learned is the need to build momentum – after all, trade transformation is a marathon. So how do you ensure people don’t ‘turn off’ and lose interest or the desire to push through? We discovered that celebrating incremental wins was the way to do that, like when we finalised the design of the solution, and when we successfully got our vendors through governance. Each win has built on the momentum.

Singh: We see three important skill sets in our transformation programme. You need technology people, of course, you need transformation people to project manage it, but you really need business people as well. One of the big changes we made was to embed people from the business into the programme, so a lot of people with serious subject matter expertise were put into the programme, creating a cross-functional group.

That was important because it’s not just a technology transformation. You’re starting with the client at the centre, but you’re thinking about challenging your current way of working, your current set of risk controls, and so on.

That means you need strong people who understand the business to drill down into what is absolutely necessary. And because you need to build in an agile way, you will come across things that you didn’t initially come to when you were specifying requirements. You need people who are empowered to take decisions and respond to changing requirements. Finally, that means you have people in the business who own the outcomes, and that’s fundamental.

Bobo: It’s all about having the right combination of profiles. We, for instance, have people coming from business, who might be experienced directly in trade or have a consultancy or strategy background, but we have also hired people from the support areas, such as operations, legal, risk, etc. Depending on the necessities of each of the business lines, we will have to look for one skill or another.

To give an example, in the documentary trade business, where there is a strong focus on going paperless and becoming more electronically integrated, someone with a deep understanding of the operational processes and the technology involved, is probably more useful than someone with a consultancy background.


Benisty: There is no shortage of conviction that there is more growth to be had in the market, both as a function of the economic environment changing and the trade finance gap, but the flow of new talent into trade banking hasn’t always been the same as other lines of business. Do you think trade transformation will change that, and drive new talent into this business?

Sugirin: It can certainly be a catalyst towards that. It’s an opportunity to take your fastest, brightest and most adaptable talent and give them the opportunity to rise to the challenge. Trade transformation is highly complex with many different moving parts and a lot of different factors, internal and external.

We are putting a lot of investment and human capital behind this. It is a large-scale project and it is fairly disruptive, so obviously the possibility of failure can be quite high. You want to make sure that the best talent is there; that is going to have the ability to adapt to change and resist the pitfalls. These guys are absolute warriors for us and will be the new leaders within the organisation.

Singh: As trade becomes more digital, and as we move towards embedded finance as opposed to traditional letters of credit and guarantees, people will become more attracted to this business. Some of the solutions we are building require completely new, digital skill sets, and that forces us to go out and look for different kinds of talent.

The core technical expertise is still very relevant, but how can you surface that in a more digital way? Sometimes you have to go out and find that talent, perhaps not from within trade but from outside, and then marry existing subject matter expertise with these new skill sets. Then, when the business transforms and is seen by the market as being more digital, that in itself will bring more talent into this space.

Petersen: I completely agree with the fact that the more dynamic you are, the more of a transformation you have and the more you are visibly growing in the market, the easier it is to attract talent.

The only flip side is that for our most knowledgeable salespeople, who have a strong understanding of an end-to-end process, it’s essential they are involved in these overall transformation processes. When you think about keeping clients at the centre, this is really keeping that in check, by understanding internal needs and balancing them with client needs.

Van Lammeren: There will be more interest, but this is not something we can take for granted. Collectively, as a group of trade practitioners, we need to continue investing in young and emerging talent, across industries, and make sure we consider talent from a wide and diverse range of backgrounds.

We have hired a lot of people from different industries, backgrounds and skill sets, and that has brought some great experience to our team in terms of fresh ideas and new ways of thinking. It is allowing us to come up with things we would not have been able to do otherwise.