Learnings from the PNB Saga: Control Fixes at Banks

The following article was written by industry experts at Traydstream, the Fintech company that has recently established its centre of Development and Operations in Mumbai, India. This is an attempt to demystify and debunk some of the myths that have emerged around the mechanism of the fraud that has been unearthed at PNB, and that has attracted such attention across India, and the global financial services community.


Reams have been written about who, whom, and how the fraud was perpetrated in the PNB story and it’s likely that the fraud will become a case study in business schools, and part of credit training at banks and Financial Institutions, regarding the Do’s and Don’t’s when lending. While the fraud itself is best left to the investigating agencies to explore, there are a number of learnings for bankers even at this early stage of investigations.


Here are a number of measures that could be introduced in the banking system, to help prevent the occurrence of fraud, as in this instance:

  1. Recognising and tallying all unfunded liabilities

An undertaking is an unfunded liability which could crystallise into a funded liability at any time. It needs to be recognised and recorded accordingly. All unfunded liabilities like letters of credit, guarantees, etc. should be tallied with the SWIFT / SFMS / secured stationery on which the bank has issued these instruments to be fully updated on all contingent liabilities.


  1. Balance confirmation at periodic intervals

On the banks’ credit systems, LoU’s should be given the same status as Financial Guarantees and accounting entries should be accordingly booked at the  time of issuance of the LOU. The lending banks against LoUs need to take care of their interests and it necessitates that the banks as well as their auditors insist on balance confirmation of the LoUs from the issuers.


  1. Integrate books of accounts as much as possible with the transactional flow

All transactions need to be fully integrated with the accounting records in the core banking system so that there is no transaction outside and the possibility of mismatch between the transaction movement and the accounting records is mitigated.


  1. Enhanced due diligence for higher levels of exposure

Automated higher levels of due diligence at a transactional and exposure level, mitigates the risk of higher amounts of transactions or higher exposure being fraudulently or inadvertently taken by officials at the operating level. The due diligence on a transaction should not be restricted only to the onset, but needs to extend to all stages of a transaction, such that if the credit quality of the client deteriorates, or market conditions change, the bank can initiate preventive steps to save its interests. It doesn’t seem in the case at hand, that  any such constant monitoring was being undertaken, allowing the perpetrator to make full use of the lack of attention or controls.


  1. Tighter audit and control processes

All products require comprehensive very tight policy and procedures in place, and new products / processes should requires sign-off from all the control teams in the banks. This will bring to surface any inherent risks in the product / process and enable sufficient controls being laid down in the process document / risk / audit checklist. One of the big problems in banking worldwide, is the lack of proper systems and policies to record all exposures – real and contingent. With large banks it’s possible that branches, units far flung from each other, could be operating under a different standard from the one laid out for the head office. This requires constant communication and audit to ensure the same processes are followed.


  1. Due diligence on the lenders against LoUs

While it is obvious that the risk of lending against a LoU is with the bank issuing the LoU, it cannot absolve the lending bank of performing due diligence on the customer to whom the amount is being disbursed. Ultimately, any lending has to be reviewed and accounted from a perspective of the worst case situation. What’s the worst that could happen? In this case it would very quickly have led to the scenario where the LoU’s were called and hence PNB would have had to pay. Not lending directly, does not mean not lending or not being exposed. Having an intermediary in the lending, makes it even more important for the credit analysis to be done thoroughly since the intermediary might not have the same standards as yourself.


  1. Analytics on funds’ flow

We are unaware as of now whether the amounts were directly disbursed to the borrowing entities or it was disbursed into the nostro accounts of PNB. If was indeed in the nostro account of PNB, a tighter analytics on the nostro funds flow, as is required for good AML checks would have brought to light such huge flows on behalf of a customer, without sufficient limits. This is equally applicable to the lending banks against the LoUs. What strikes one as odd is that the sums credited to PNB were, it seems, transferred by the overseas lending banks, as exposures to PNB and not to the final obligor. As bankers, that’s a sure sign of the money being lent to PNB and not the obligor. If that is indeed the case, then these funds were never lent to the obligor but were lent to PNB for the funds to be returned. However, if the accounting entry from the lending banks was to the obligor, the LoU’s were the support under which the lending was predicated and hence were a  full credit exposure for PNB. It should have then been recognised and recorded accordingly.


  1. Culture of adherence to norms

This should be set as an example from the top. There should be zero tolerance to deviation from norms, including sanction of credit limits to the high and mighty, change of roles, documentation norms, etc., irrespective of the rank of the official within the bank. Any instances of wrong doing should be met with appropriate disciplinary measures, to set an example for all others.


  1. What seems to be “too good to be true” is likely ‘not true’

Like all industries, bankers also have revenue targets to be met. However, if someone is willing to pay you a lot of money for almost next to nothing, it should raise a big red flag. The age old truth in finance, high risk / high return has never been so true.


  1. Relationship Banking

One of the fundamental of banking has always been maintaining a tight relationship with your client, such that you are aware of everything that’s happening to his business. It’s called ‘know your customer’ or KYC. In this case it seems, KYC norms were not adhered to at all. In fact, in some of the more prudent banks worldwide, KYC does not only restrict itself to the client being lent to, but to the secondary industry sources and surrogate checks such as D&B etc. That seems to have been missed totally here.  Specially for such a specialised industry like Diamonds, where to the untrained eye, the difference between glass and a precious stone is very difficult to ascertain. As the adage goes ‘Easy credit, uneasy creditors’, one has to be very careful when lending to have done one’s complete homework.


  1. Grow slowly, Lend slower

One of the other principals lending is based on, is grow the credit limit slowly. Do not proceed to increase your exposure, exponentially within a short period of time. Experience a few cycles with the client and only with a thorough analysis of the client’s financials should one consider an increase in lending.


  1. Need Based Finance

Lending to a client should always be provided only for the amount and duration required, never for more than that. Why tempt the obligor into diverting funds that he probably did not deserve and desire, into extraneous uses, that can only come to hurt? This was one of the fundamental learnings from the Sub prime crisis in 2008, but seems to have been completely forgotten or overlooked in this case.


  1. Refresh and Call Back

Ongoing client businesses require ongoing funding. Their cash flows are constantly coming in and out and hence banks need to fund them constantly. While the predominant businesses around the world, are genuine and build safeguards and controls to monitor the ‘ins’ and ‘outs’ closely, banks have for decades followed a policy of call back. What that requires is for the client to pay back all his working capital dues for at least a week to 10 days to the bank. The net outstanding to the client comes down to zero and hence permits the bank to get itself comfortable that the client has the ability to return the funds and is not using successive borrowings to pay back the earlier ones.


  1. Credit Bureau

Smart fraudsters are also adept at moving funds between lenders and hence central banks need to a) ensure a regular recording of the exposures that banks have to the obligor and b) banks need to review these exposures to analyse their own lending vs the overall lent to that client. This ensures that a client has not over borrowed from the industry and his exposure is within his client limits.


  1. Large debtor reviews

One of the other prudent checks that’s prevalent in banking industry is the constant review of the large exposures that the bank might have. At the least it might surface the clients where revenue might be at risk, if the client moves on. But the other purpose of such a review is any of these hidden risks that the bank might have been exposed to. For if a client is making a lot of money for the bank, but does not have a corresponding capital allocated to the exposure or a requisite reason for the inordinate earning, it should serve as a red flag.


  1. Governance

Finally, any industry, and specially banking where billions get lent and traded daily, is dependent on governance. A tightly governed organisation has multiple avenues for such risks to be fleshed out. Whether it be a business review, a risk review, and controls check or a transactional audit, it’s critical to ensure that Governance is extremely tight for the bank to rely on. It’s usual for things to go back to normal as time passes, and the worst thing possible would be not to learn from the incident. Institute processes such that it never occurs and conduct a thorough check such that no other such hidden exposure is lurking in the books. For the others who have not been impacted, this is a great learning ground so that one can mitigate any such issues without having to go through the painful experience of living through the loss.


In today’s day and age, with a plethora of technologies at our disposal, it’s paramount to automate systems, connect platforms, be networked and have best in class solutions that support processing, while remaining constantly alert to evolving environmental conditions.


About Traydstream Platform:

Traydstream is a machine learning based financial technology (Fintech / Regtech) platform designed to automate Trade Finance processing for banks and large corporates, reducing operational overheads and improving the accuracy and speed of error and fraud detection in transaction documents. The platform digitises processing and constantly connects with checks and controls around the world, online and real-time, to verify the genuineness of transactions, keeping banks and lending safe.

Fintech firm Traydstream names head of India entity

As seen here on Global Trade Review (GTR)


Traydstream, a UK-headquartered fintech company whose platform digitalises and automates trade finance, has hired Jayan Menon as its new country head for India.

The official appointment of Menon follows the firm’s announcement in January that it had opened its first subsidiary in Mumbai.

In his new role, Menon will be in charge of building a team of trade specialists who will help expand Traydstream’s fintech platform. He will work closely with the company’s vendors in India and Ukraine to ensure consistent global client delivery as the firm begins to onboard new clients and carry out more pilots. He will be a director of the Indian operation and be part of Traydstream’s wider management.

Menon brings more than 25 years of experience in the banking industry, particularly in trade services and treasury. He joins from Tata Consultancy Services, where, as director of operations, he headed the trade operations of a large UAE bank. He previously worked for ICICI Bank and Yes Bank, among others, in India.

Launched last year, Traydstream’s fintech solution digitalises trade documents and automates regulatory compliance screening using artificial intelligence (AI) and optical character recognition (OCR) technology.

The company is currently in varying stages of discussions, including undertaking pilots and proofs of concept, with almost 50 banks and corporates around the world. Around 15 of them are based in Asia.

“The application of the functional knowledge in trade to transform the trade services in banks with the latest technology applications is what excited me to join this fantastic team,” says Menon in a statement.

According to Achille D’Antoni, Traydstream co-founder and chief sales officer, the company has been targeting Menon “for a while”. He adds: “We are delighted to have Jayan on board. Our goal is to keep attracting first-class professionals who relish the challenges of product innovation as well as effectively managing global client delivery in a new innovative environment.”

Traydstream arm in India to service Global Banks and Corporates as Centre for Trade and Technology Expertise

As seen on Global Trade Review

Traydstream, a UK-based fintech company that aims to digitalise and automate trade finance, has opened a new office in India, its first global servicing hub for its trade, technology and client service operations.

The entity will house experts in the disciplines of trade and technology to support the ongoing development of Traydstream’s proposition, as well as servicing clients around the world.

Launched last year, the fintech firm’s solution digitalises trade documents and automates regulatory compliance screening using artificial intelligence (AI) and optical character recognition (OCR) technology.

Traydstream’s CEO, Sameer Sehgal, tells GTR the company has been talking to a number of industry seniors and is looking to announce its director of operation and the office’s executive team soon.

He says the creation of an India entity was a “natural decision” for the company.

“Over the last few decades India has firmly established itself as a leader in the tech and software industry and as a primary offshore processor for trade for organisations around the world. It’s got a deep bench strength of trade and banking professionals focussed on operations, something which we found extremely attractive,” he explains.

Based in Mumbai, the new entity will be able to serve clients 24/7, together with the office in London, Sehgal adds.

Traydstream’s solution consists of three key modules: an OCR engine, which uses AI to read, scan and instantly structure and store paper-based information digitally; a rule-checking function; and a compliance engine that utilises machine learning algorithms to verify and scrutinise for compliance with international trading rules and regulations.

The company is currently in varying stages of discussions, including undertaking pilots and proofs of concept, with almost 50 banks and corporates around the world. Around 15 of them are based in Asia.

Traydstream Wins Award for Best UK Digital Experience in Financial Services & Fintech


Traydstream Wins Award for Best UK Digital Experience in Financial Services & Fintech 

Trade technology firm Traydstream has taken home the award for best Financial Services & Fintech in the UK Digital Experience Awards 2017.

Celebrating the very best in organisations that offer exceptional digital experiences for their valued customers, the awards were hosted at the famous Wembley Stadium in London on 22nd November 2017, in conjunction with the UK Business Awards. The ceremony was host to over 500 contestants, including industry leading firms like Lloyds Banking group, Three UK, GlaxoSmithKline, Virgin Money, Thomson Reuters, and many others.

Entrants were scrutinised by a judging panel featuring some of the sharpest industry minds, examining the businesses’ digital contribution to the sector, disruptive ability, and innovation of solution. Scoring accorded to strict criteria aligned with the Cranfield School of Management.

Traydstream is marked by its holistic approach to the digitalisation of trade finance, with a focus on the automation of key processes like document discrepancy-checks, due-diligence, and regulatory and compliance screening, as well as the initial stages of converting data to digital format – a process achieved by their proprietary Optical Character Recognition (OCR) technology. Designed and built by seniors within the banking and technology communities, Traydstream is making headway in an industry increasingly aware of its need for reform. In fines alone, banks globally have paid ‘USD $321 billion in fines since 2008 for an abundance of regulatory failings from money laundering to market manipulation and terrorist financing’, according to data from Boston Consulting Group.[1]

Co-founder and Chief Operating Officer at Traydstream, Uzair Bawany, said of their recent accolade: “It’s been a challenging and fascinating journey to date; receiving this award is wonderful recognition of our efforts to reform a sector crying out for change. It is only the beginning of Traydstream’s future impact on the industry.”

On the increasingly high value placed in Digital Experience, Awards International CEO Neil Skehel said of the awards: “Digital Experience is fast becoming one of the most important fields for businesses right across the globe. Today’s customers expect a lot from firms when it comes to offering a digital pathway, and if they can’t keep up they will be left behind.

These awards are a way of showcasing the most innovative and exceptional firms, whose Digital Experience for customers is second-to-none at a time of rapid change and ruthless competition.”


[1] Bloomberg, ‘World’s Biggest Banks Fined $321 Billion Since Financial Crisis’, <https://www.bloomberg.com/news/articles/2017-03-02/world-s-biggest-banks-fined-321-billion-since-financial-crisis>.

UK Digital Experience Awards 2017: Finalists Revealed

The UK Digital Experience Awards 2017 are to take place at London’s Wembley Stadium in what promises to be one of the most thrilling industry events this year.

Celebrating the very best in organisations that offer an exceptional digital experience for their valued customers, the awards will now be hosted earlier than planned at the famous London venue on November 22, in conjunction with the UK Business Awards

Finalists will compete in 18 categories for awards including best Omni-Channel Experience, best SEO, and best Mobile Strategy.

Entrants will be scrutinized by a judging panel featuring some of the sharpest industry minds, who will be examining the businesses’ digital experience portfolio and scoring according to strict criteria.

The gala event – which is being held by Awards International with the valued support of partners Barnardo’s, CXM, and Cranfield School of Management – is also shaping up to be one of the calendar’s key networking opportunities, ensuring that every attendee walks away with something valuable, even if it’s not one of the sought-after awards trophies.

Following the announcement of this year’s finalists, Awards International CEO Neil Skehel said: “Digital Experience is fast becoming one of the most important fields for businesses right across the globe. Today’s customers expect a lot from firms when it comes to offering a digital pathway, and if they can’t keep up they will be left behind.

“These awards are a way of showcasing the most innovative and exceptional firms, whose Digital Experience for customers is second-to-none at a time of rapid change and ruthless competition.

“It’s also fantastic to be able to bring the DX Awards to a new and bigger venue, the world-famous Wembley Stadium. It’s going to be a hugely exciting day for celebrating what makes UK businesses among the best on Earth for communication with their customers.”


Financial Services and Fintech Award:

Brilliant Basics

Divido Financial Services Ltd


Tempcover Ltd


Not for Profit and Charity Award:

GRIT Digital on behalf of The Association of Independent Museums

RHP Group

Xaxis on behalf of GlobalGiving

Yoyo Design on behalf of England Athletics

Best Online User Experience B2B:

Orange Bus

Sage in partnership with Valtech

Lloyds Banking Group (AO&O)

Thompson Reuters

Best Online User Experience B2C Award:

Absolute Design Association Ltd on behalf of 3P Direct Ltd


Foundit on behalf of Amara

Hallam Internet on behalf of Virtual Runner

Virgin Money

Business Transformation Award:

Business Stream in partnership with Cap Gemini

Cardiff and Vale College, Wales in partnership with PwC UK

Sage in partnership with Valtech

Vortex Commerce Ltd on behalf of AKW

Business Transformation Award:

Business Stream in partnership with Cap Gemini

Cardiff and Vale College, Wales in partnership with PwC UK

Sage in partnership with Valtech

Vortex Commerce Ltd on behalf of AKW

Business Change Award:


Lloyds Islands Community Bank

Royal Bournemouth and Christchurch Hospitals Trust Outpatients Department in partnership with Social Facilitators and Humap Software

Sagittarius on behalf of Contiki

Thomoson Reuters

Virgin Trains

Cloud Service Award:

SignStix Ltd


Nobly POS

 DX Innovation Award:

Draper and Dash


Rachel Dalton Communications on behalf of Ieso Digital Health


The BIO Agency on behalf of British Airways

Three UK

Mobile Strategy Award:

Aston Barclay Group


Nobly POS

Three UK

Virgin Trains

Omni-Channel Experience Award:

Business Stream

Divido Financial Services Ltd


Lloyds Banking Group

Severn Trent

Vizolution in partnership with O2

Use of SEO:

Banc on behalf of Gazprom Energy UK

Three UK

Virgin Money

Digital Team Award:

Absolute Design Associated Ltd on behalf of 3P Direct Ltd

B&Q plc in partnership with Digits Industries Ltd

Digital Transformation Service Northern Ireland


Severn Trent

Beyond the Blockchain – The Role of Traydstream within End-to-End Transactions


A lot has been made recently of the advent of blockchain in financial services, and banks must be applauded for their commitment to change; consortiums like R3 are clearly positive initiatives that demonstrate the industry-wide desire to innovate. With global trade finance revenues reaching their lowest level in seven years, with a 5% decline year-on-year announced for the first half of 2017, as reported by GTR[1], this desire has reached a tipping point.

Trade Finance is one area, in particular, where the introduction of blockchain technology would appear to have a profound impact.

Trade remains an industry that relies on the iterative updating and transfer of paper-based documentation but with blockchain these iterations could be centralised – or rather decentralised – removing the costs and delays involved with the duplication and transfer of documentary credit between buyers’ and sellers’ banks and insurers. This approach enables the simultaneous digital recording of data across multiple parties, leading to secure transactions and instantaneous updating.

This is however only one part of the process as far as trade finance processing is concerned. The ‘heavy lifting’ involved in the scrutiny of transaction documentation for regulatory compliance remains largely un-automated, and this is where Traydstream has focussed its efforts.

Currently banks employ extensive teams of ‘document-checkers’ to scrutinise the transaction documentation. This involves different aspects of scrutiny including highlighting discrepancies between entries or missing fields; ensuring compliance with international trading standards and embargoes as set by the UCP Rules and ICC’s ISBP regulations; and spotting contravention of country and port specific sanctions, as well as internal banking policies.

Since the financial crisis these regulatory requirements have accelerated drastically with the number of individual regulatory changes that banks must track on a global scale more than tripling since 2011, to an average of 200 revisions per day, according to BCG research.[2]

This has led to spiralling compliance costs for banks with the cost of inaction being equally severe – ‘strict regulatory enforcement has brought cumulative financial penalties of roughly $321 billion (through to the end of 2016).[3] It is in this environment that the need for smarter methods of reviewing and scrutinising transactions has become mission-critical.

Traydstream’s solution is aimed at solving these challenges, reducing the regulatory burden without sacrificing transaction scrutiny or security. We have spent the last three years developing a platform that extracts data using a propietary OCR engine, breaks down the conditions of the document and scrutinises it for regulatory compliance using with what we believe to be a unique rule engine.

The platform mirrors exactly the job of a document checker today, using cognitive behavioural technology to learn from each transaction, memorise document behaviour, and perceive potential issues.

With this tailored use of Artificial Intelligence and Machine Learning, the platform can automate the end-to-end processes of trade finance using manual paper based records, OR their digital equivalents through blockchain technology.

Smart contracts (which are one of the most highly anticipated applications of the blockchain) are, in effect, computer programs that verify, or enforce the negotiation or execution of an agreement.  Clearly this has highly positive implications in facilitating documentation BUT they still need to be checked, scrutinised validated, and this is the purpose behind Traydstream.

At Traydstream, we view the processes behind regulatory compliance as one of the big challenges that lie in Trade Finance and have hit this ‘head-on’ to change the landscape on how trade is processed.   We are committed to delivering an intelligent end-to-end solution that will process in minutes what currently takes banks hours and in many cases days.

We see Traydstream as a real game-changer, whose solution is only improved by blockchain adoption.  Having concentrated our efforts on solving the processing piece of the trade puzzle, we are excited to be launching our solution into the market.


Uzair Bawany

Felix Bradshaw


[1] Global Trade Review, ‘Global trade finance revenues hit seven-year low’, <https://www.gtreview.com/news/global/trade-finance-revenues-hit-seven-year-low/>

[2] Boston Consulting Group (BCG), ‘Global Risk 2017: Staying the Course in Banking’, <https://www.bcg.com/publications/2017/financial-institutions-growth-global-risk-2017-staying-course-banking.aspx>

[3] BCG, ‘Global Risk 2017: Staying the Course in Banking’.


Citi’s Sehgal joins new fintech firm Traydstream

As seen on Global Trade Review’s (GTR’s) On The Move


Sameer Sehgal, until recently Citi’s head of trade for Europe, Middle East and Africa, has left the bank to become the CEO of Traydstream, a new fintech company that aims to digitise and automate trade finance.

Sehgal brings over 22 years of experience in trade, having held a range of senior roles at Citi and Bank of America. Most recently he headed Citi’s trade, export agency and commodities business in Emea, a position he has held since 2009. During his time there, he helped the bank build new capabilities, including the expansion into supply chain finance, export and agency finance, shipping and commodities finance.

Based in London, Traydstream is a new fintech player in the trade finance space. It has recently launched a solution that digitalises trade documents and automates regulatory compliance screeningusing artificial intelligence (AI) and optical character recognition (OCR) technology.

Sehgal will lead Traydstream through a crucial period for the company, which has pilots scheduled over Q2/3. It has already started its first pilot with a bank in Asia, and will soon start testing with a European corporate. The company says it is also in advanced discussions with three other banks in Europe and one in Africa.

Traydstream co-founder and COO, Uzair Bawany, says the appointment of Sehgal is “invaluable to us in charting a course for the exciting future for our business”.

The firm’s other co-founder and global sales head, Achille D’Antoni, adds: “Sameer is a true industry expert. Uzair and I are delighted that he has joined us and he genuinely shares in our vision to re-shape trade finance. We are very excited with the next phase in our business as we move to pilot phase with leading banks and I cannot think of a better person to have at our helm.”

Commenting on his move from Citi to Traydstream, Sehgal says: “Digitisation and automation in trade is long overdue and Traydstream’s solution is refreshingly creative. The technical tools at hand today promise to redefine international trade and commerce. It’s a fascinating time to be in the industry and working on these game-changing innovations.”

The hire of Sehgal follows those of three senior staff members to lead the firm’s technology, product development and agent relations teams.

Traydstream’s solution consists of three key modules: an OCR engine, which uses AI to read, scan and instantly structure and store paper-based information digitally; a rule-checking function; and a compliance engine that utilises machine learning algorithms to verify and scrutinise for compliance with international trading rules and regulations.

New fintech partnerships to push automation in trade finance

Click Here to see on GTR (Global Trade Review)

03-08-17 / BY 


Traydstream, a trade finance fintech firm, has entered into two partnerships to expand its newly-launched trade digitalisation and compliance screening solution.

It has partnered with PFU, a subsidiary of Fujitsu and the makers of Fujitsu scanners, which will allow it to add scanning services to its solution.

A second partnership with Lloyd’s List Intelligence, a global maritime intelligence service, which the company says is more of a “relationship” than formal partnership, will provide Traydsteam’s clients with access to its global network of specialist maritime data, including real-time tracking of shipping vessels, vessel characteristics and cargo information.

PFU’s industrial scanners will be the facilitator of Traydstream’s proprietary optical character recognition (OCR) engine, which can read, scan and instantly extract and structure paper-based information digitally, and which forms part of the solution’s first step to convert all trade documents to a digital format.

As reported by GTR in June, the OCR engine is not Traydstream’s main selling point, nor is it a new invention, but the company built one specifically for trade finance, after struggling to find one that met the specific needs of the industry.

“Trade business is made up by paper with different formats, fonts, issuers and structures,” Achille D’Antoni, co-founder of Traydstream, told GTR at the time. “We looked at a dozen OCR products, but none served the idea that we had, namely, to have an OCR that could put together all the different formats and make it work. That’s the reason we had to develop it ourselves.”

As part of the collaboration, Traydstream have also become a member of PFU’s Imaging Alliance Programme, which gives access to tools, resources and code to build innovative scanner solutions.

The data-sharing collaboration with Lloyd’s List Intelligence, meanwhile, will augment Traydstream’s compliance engine, the second part of its solution. This engine uses machine learning algorithms to quickly scrutinise the digital transaction data for a range of issues, such as blank fields, the inconsistency of names, industry-specific legislation, sanctions and country restrictions, to help banks and large corporations tackle anti-money laundering (AML) and compliance issues.

In a statement, the company says the two new alliances represent “the next phase in Traydstream’s expansion”.

The new capabilities will be incorporated into its digital solution and tested in its upcoming pilots, which are scheduled with three banks over Q3 and Q4 of 2017.

Traydstream is one of the many new companies that have seen the huge opportunities in entering the regtech space, aiming to ease the massive regulatory burden on banks since the financial crisis.

According to Thomson Reuters, the annual volume of regulatory updates increased by 492% from 2008 to 2015. JWG, a London-based think tank that focuses on financial regulation, has estimated that over 300 million pages of regulatory documents will be published by 2020.


Fintech company Traydstream makes three senior hires

Click Here to see on GTR

ON THE MOVE / 07-07-17

Traydstream, a new trade finance fintech company, has brought in three senior staff members to lead its technology, product development and agent relations teams.

Ray Sherry has joined as chief technology officer (CTO), overseeing the IT architecture and digital solutions for the company’s operations across Europe, Asia and Africa.

Sherry has more than 32 years of experience working in technology teams within various industries. Among others, he has held senior technology roles at Barclays and Catella Bank, and specialises in early stage business development, strategy and growth.

Matteo Bocchi Bianchi is the company’s new chief knowledge officer (CKO). He is a financial engineer with over 12 years’ experience within corporate banking and strategy consultancy in emerging technologies. He has previously worked in Citi’s trade finance team and specialises in business development, implementation and transaction protocol.

In his new role, Bocchi Bianchi leads Traydstream’s digital strategy, with a particular focus on regtech. He is also responsible for new partnerships, mainly looking at areas such as big data, logistics, mobile, AI and blockchain.

Lastly, Sante Zampini has joined Traydstream as head of agent relations. He has over 30 years of experience in corporate banking in the US and Italy, including at Citi, with a focus on relationship management and sales. At Traydstream, Zampini oversees the roll-out of a network of high-level agents operating across the globe, originating deals with banks and large corporations.

Based in London, Traydstream is a new fintech player which has recently launched a solution that digitalises trade documents and automates regulatory compliance screening using artificial intelligence. The company has to date spent US$1.2mn building the platform, self-funded by 15 shareholders, and is about to internally raise another round of funding in order to deliver pilot tests of the software with three banks and a large corporate. The first pilots are scheduled over Q2/3.

Traydstream launches fintech solution for paperless trade

GLOBAL / 16-06-17 / BY ,  GTR (Global Trade Review) 

Click Here to see on GTR

New fintech player, Traydstream, has launched a solution to digitalise trade documents and automate regulatory compliance screening using artificial intelligence.

As is often the case when talking fintech, it didn’t take long before the word ‘blockchain’ entered the conversation when GTR met with Uzair Bawany and Achille D’Antoni, the co-founders of Traydstream – one of the newest global fintech companies hoping to revolutionise the way banks and companies process trade documents.

But Traydstream’s solution itself contains nothing related to blockchain or distributed ledger technology. “Everyone talks about blockchain, but blockchain doesn’t do the processing. So that’s how we came about with the idea,” says Bawany. “Trade is one of the few bastions of banking that remains extremely manual. We thought, there has got to be a way to automate some of this.”

In short, Traydstream’s new solution digitalises the whole trade transaction – from invoice to Swift – and is targeted at banks as well as corporates.

While other players such as Bolero and essDocs have already developed similar platforms for paperless trade, the Traydstream founders believe their solution is unique in that it also processes the documents and rigorously checks them against a library of tens of thousands of global and regional trade finance regulations and rules. Within many banks this is a manual, labour-intensive job.

“Document checks tend to be done by very experienced senior professionals who have been in the bank for many years, who know all the tricks,” Bawany says. “We’ve made that into a smart process using technology. So what typically takes a human being between four and 10 hours, we’re aiming to do in three minutes.”

Utilising semantic analysis techniques, the engine can quickly check all trade data for a range of issues – blank fields, the inconsistency of names, industry-specific legislation, sanctions and country restrictions – thus helping banks tackle anti-money laundering and compliance sensitivities.

The machine is not only quicker, it is often more reliable, they say. And using machine learning technology, the system only learns and develops as it is fed more data.

“Imagine a document checker, he’s working late on Thursday night and comes in on Friday feeling tired,” Bawany says. “He may miss something, a payment is made, and the bank is on the hook for it. A machine doesn’t have tired days. It never forgets either. So the efficiency is a huge value.”

Together with a team of ex-trade finance bankers and industry professionals, Bawany and D’Antoni have spent the last two-and-a-half years diligently developing the new solution. The company has to date spent US$1.2mn building the platform, self-funded by 15 shareholders, and is now looking to raise series A financing to commence pilot tests of the software with three banks and a large corporate.

Having already spoken with dozens of financial institutions, D’Antoni says they have received a huge amount of curiousity and interest for the platform. The banks, he adds, are facing the same challenge:

“A lot of people who know how to read a document and how to process it are about to retire. This is a global problem. This means they have to be replaced by others, and the cost of training, to bring people to that level, is huge,” he says.


With or without OCR

With trade being a paper-heavy industry, the first step of Traydstream’s process is really to convert all trade documents to a digital format.

To do so, Traydstream has developed its own OCR (optical character recognition) engine, which can read, scan and instantly structure and store paper-based information digitally. Although the ORC engine is not its main selling point, and not a new invention, the company has built it after struggling to find one that met the specific needs of the trade industry.

“Trade business is made up by paper with different formats, fonts, issuers and structures,” D’Antoni says. “We looked at a dozen OCR products, but none served the idea that we had, namely, to have an OCR that could put together all the different formats and make it work. That’s the reason we had to develop it ourselves.”

He adds that the OCR solution’s accuracy on the extraction of clean data is 97%. And instead of being saved on another piece of paper, the data can be stored on the cloud for life.

But ultimately, the goal is a world where there is no paper in the first place, and thus an OCR is not even needed. “We are trying to work with clients to load data straight onto our portal, so the scanning is not even required,” Bawany says. “That would be our dream. The OCR is the headache we wish we didn’t have to deal with.”

The Traydstream founders are not short on ideas for how the platform could be expanded and integrated with other technologies in the long run, not to mention the most obvious:

“There’s a possible connection with blockchain,” Bawany says. “The digital information from the blockchain can be put onto our platform, which removes all the OCR issues, so we see blockchain as an enabler for us, which is quite exciting.”

He also sees the possibility of expanding the solution into a crowd funding platform where private investors could chip in to a letter of credit, for example. But for now, the goal is to develop and test the solution as it stands.

“At the moment the focus is on building this platform and hopefully make it into a unicorn,” he ends.