“A lot of these [trade] platforms are digital islands not because they choose to be, but because of the enormous challenges required to open them up. What we’re fundamentally going to do is not introduce a new platform necessarily, but produce the standards required for interoperability … I don’t believe we’ll be creating a silo, we’ll definitely be creating some standards,” he said.
Kuyler was speaking on a panel during Sibos today.
The ICC launched its Digital Standards Initiative in April following a push from market participants to foster more efficient digital trade. According to new Swift findings referenced during the panel, the use of the company’s digital trade channels for corporates saw a double digit increase during the pandemic while overall trade fell – an indication that trade digitisation is on the rise.
Panellists highlighted the importance of government involvement in achieving interoperability.
“The biggest enemy of digitisation is a rubber stamp, which still exists in many parts of the world. How do you put a rubber stamp on a digital code? That’s depending on governments being able to adapt,” said Daniel Schmand, global head trade finance, Deutsche Bank.
“At the same, geopolitical tensions make it much harder to agree on something … We need to have interoperability between systems and we need to have somebody like the ICC to set standards because it cannot be on the national basis. I don’t see at the moment the Middle Eastern, the Russians, the Chinese and the Americans agree on a common standard and platform by tomorrow. We will have to live with different standards.”
Wai Yee Choo, director, national trade platform within the Singapore government’s finance ministry agreed that governments play important roles in digitisation.
“There are two big roles governments have to play. First is putting in place some of those tools like digital signatures, digital identities, digital standards working with international bodies. The other thing we have to do is governments come together to enable parties in both of our jurisdictions to be able to transact digitally,” she said.
The panel agreed that multiple trade platforms may have to coexist before a phase of consolidation occurs. But while large banks and corporates could be able to support several networks, uncertainty remains for smaller banks.
“For the smaller banks, being able to make investments into multiple platforms is going to be a challenge. It’s going to be an investment challenge, it’s going to be a resource challenge,” said Ebru Pakcan, global head of trade, Citi.
“And they are going to then have to make their choices about either being part of a network which is then through its interoperability connecting with others, or it is the good old corresponding banking network … Over time, you can assume that there’s going to be some level of consolidation. I don’t think we’re necessarily going to continue with many platforms out there, but there’s definitely going to be multiplicity.”