Five more banks and financial services firms have joined the Trade Finance Distribution Initiative (TFDI), an international effort to use technology and standardisation for the wider distribution of trade finance assets.

TFDI announced that Commonwealth Bank of Australia (CBA), ABN Amro, London Forfaiting Company, Crown Agents Bank and Natixis have joined the likes of Crédit Agricole CIB, Deutsche Bank, HSBC, ING, Lloyds Bank, Rabobank, Standard Bank and Standard Chartered Bank as members.

The trade finance market - private financing that helps businesses cover mismatches between payment obligations and receipts - is worth in excess of $25 trillion. TFDI said the industry presents a compelling multi-trillion dollar investment opportunity for institutional investors seeking sources of long-term, low-risk returns based on the tangible flows of goods and services.

However, there is little to no scalable market infrastructure to facilitate the exchange of trade finance assets between banks and institutional investors, according to TFDI.

Using machine learning technology for supply chain predictive analysis, transaction level credit scoring, risk management, the TFDI said its members will work together to utilise and adopt a common infrastructure powered by Tradeteq, the global trade finance distribution platform.

The technology aims to enable banks and institutional investors to efficiently connect, interact and transact.

André Casterman, board member at Tradeteq and chair of the Fintech Committee at the International Trade and Forfaiting Association, stated: “The existing trade finance infrastructure that institutions rely on is outdated, and the industry is on the cusp of change.

“This is a truly international, collaborative effort that includes the banking community, institutional investors, trade associations and other service providers.”

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