It seems hardly possible these days to read an article about Trade Finance without references to FinTech.
To be honest, we have used it a lot ourselves. But what actually is FinTech?
Simply put, it is new technology for the delivery of financial solutions and services.
A broader definition has been provided by the FSB (Financial Stability Board), stating: "technologically enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services." http://www.fsb.org/what-we-do/policy-development/additional-policy-areas/monitoring-of-fintech/
The European Commission defines FinTech as technology-enabled innovation in financial services, which is spurring new business models, applications and processes, such as payment applications for mobile devices.
In fact, the European Commission has recently issued a useful FinTech Action Plan which has the aim of a more competitive and innovative European financial sector. The Action Plan has three main objectives: to support innovative business models to scale up across the single market; to encourage the uptake of new technologies in the financial sector; and, to increase cybersecurity and the integrity of the financial system.
In the world of trade, we will see increased FinTech influence on our business - this will encompass both front and back office, impacting upon everything from basic document checking to KYC to understanding clients needs in greater depth.
We have examined many of the approaches in previous blogs, but these include, but are not limited to:
With the advent of FinTech into our industry, this is a very exciting time to be involved in Trade Finance. And from a personal perspective, it is pleasing to see figures - produced by Pitchbook for promotional agency London & Partners - which evidence investment into the UK's tech sector reaching an all-time high in 2017 at almost double the £1.63 billion invested in 2016.
This even prompted the Mayor of London, Sadiq Khan, to state: "Today's record investment figures are further proof that London is the undisputed tech capital of Europe and I am committed to ensuring we take over from Silicon Valley as the world's leading tech hub."