Commodity trade finance, the digital age

At BNP Paribas, Blockchain, Big Data and Artificial Intelligence are not the latest corporate buzzwords, rather concrete and meaningful projects aiming at transforming further and deeper customers’ journey.

Discover three digital initiatives dedicated to commodity trade finance.

From tradition to modernity

Commodity trade finance today is a very traditional business where:

1. Paper is everywhere: think about bills of lading that are physically circulated – in several versions – among many participants (seller, vessel captain, intermediaries, banks, buyer…);
2. Interactions are mostly through phone, fax and heavy emails: which can become – given the large number of parties involved – rapidly time consuming;
3. Information is shared sequentially by all parties, leading to very long processes;
4. Data capture is redundant and reconciliations are performed manually, thus increasing operational risk;
5. Tasks are often repetitive and labour-intensive, which is not the best way to engage employees in their work.

In today’s world, people are expecting more transparency, more efficiency, more security, quicker delivery, and reduced costs. Digital is the best way to address all these challenges.

Beyond Buzzwords

Using Blockchain technology, BNP Paribas has developed MyCollat, a solution enabling real-time monitoring of goods used as collaterals by banks. Built in collaboration with BNP Paribas clients, MyCollat is accessible through a web portal and promotes the sharing of information used in commodity finance. All parties to a contract have access to the same verified transaction records, available through a distributed shared database. Each participant can then update the status in real time, thus enabling fast, simple and accurate follow-up. This solution allows a quicker processing of the transactions, increased security and transparency and progressively reduces the volume of papers and emails exchanged.

Using Big Data, BNP Paribas is working hard to understand better the commodity ecosystem and to bring more added-value services to clients. The idea is to better understand the links between clients and suppliers to be more proactive and relevant in the bank’s propositions. The goal is to be more knowledgeable and expert on the whole value chain. This project – Commo Connect – is already live and being continuously improved. Note that the objective of Commo Connect is not to make an extensive and systematic use of collected data. This is out of question. As a bank, BNP Paribas values the preservation of the confidentiality for its clients and complies with the most stringent regulations. On that aspect, clients can be reassured.

Another part of the on-going digitalization process is Artificial Intelligence (AI). On that topic, BNP Paribas has put in place a dedicated AI lab in Paris to develop knowledge and solutions. There are currently no dedicated solutions for commodity players but it is also a lever on which we want to keep working on. Taking into consideration the usages already in place in the retail trade, it has brought a lot of comfort and relevancy to clients. For instance, chatbots may bring answers to simple and recurring client’s questions, 24/7. The stake, however, is to feed the AI engines with enough relevant data for better results.

Transforming Customer journey

These three initiatives illustrate BNP Paribas ambition: to provide a distinctive experience for clients thanks to digital technologies. To do so, the bank is committed to transform customers’ journey to meet their true needs, with a clear focus on global experience. In the digital age, the question is not What to offer to clients but How to offer it. With all these digital initiatives, BNP Paribas is working hard to transform customer journey and offer the same levels of satisfaction, clients are receiving in their private life from the likes of Amazon, Apple and Google. The journey continues!