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

31/08/17

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.

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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.