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It has been presented as a miracle solution to help banks free up liquidity under Basel III regulations, and as a great way for investors to diversify their portfolios, so why isn’t trade asset distribution more commonplace? Around this time four years ago, Bank of America Merrill Lynch organised its first Trade Risk Distribution Investor Forum in Singapore. It was attended by about 50 executives from 30 global banks, all there to discuss why redistributing trade finance assets made sense in light of new capital regulations and leverage ratio requirements.

Technology has finally caught up on banks’ desire to distribute trade assets - and it has never been easier for investors to get involved. The trade finance sector has been trying to raise awareness on the relevance of investing in trade assets for years. In fact, the International Chamber of Commerce (ICC) Banking Commission releases an annual report analysing the default risk presented by these assets, which has repeatedly confirmed their low risk profile.

Artificial intelligence (AI) is changing the way trade financiers do business, making trade assets investable at last. The first applications of AI in the trade finance sector are fairly recent, and mostly focused on compliance and due diligence such as natural language processing to create comprehensive profiles of individuals or businesses involved in a transaction, based on extensive web searches. Other compliance applications scour trade finance documents to find anomalies - for example discrepancies between the price per unit of a product and the final invoice value.

Year after year, the Asian Development Bank’s (ADB) Trade Finance Gaps, Growth, and Jobs Survey comes to the same damning conclusion: Small and medium enterprises (SMEs) are still facing a significant trade finance gap. In 2016, it stood at US$1.5tn.

Euromoney interviews Christoph Gugelmann about the need for the trade finance sector to reach out to institutional investors.

The launch of Tradeteq, the first AI-driven trade finance distribution platform, in March 2018 was covered by many news outlets.

Tradeteq, the collaborative network that connects trade finance originators with funders and provides them with the technology to interact and transact, has moved to new offices in central London.