Global Cultures

Collaborating to improve global trade

October 2016

The ANZ-NUS Financial Services Innovation Challenge in September threw down the gauntlet to eight teams of students and challenged them to find fin-tech solutions for international trade.

The students from NUS (National University of Singapore) were promised three things: this event would change their lives, they would have great technology to play with, and they would have a fantastic view.

The third promise was immediately obvious for the students, bankers and technologists who had gathered at IBM’s innovation centre, where they have a view of Singapore’s harbour. In a spirit of collaboration, they had all gathered for a financial technology innovation challenge where they would seek to improve some aspect of the processes driving international trade.

It’s a fitting challenge when the view out of the window shows the global economy in action. Ships are entering and leaving the port, and cranes are loading and unloading containers. Locals often comment on how the view of Singapore’s harbour is a sign of how well the economy is doing.

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Nick White, General Manager of Technology - Asia Pacific, Europe and America

“If the cranes are up, things are not good,” says Nick White, General Manager of Asia Pacific, Europe and America at ANZ.

Some of the ships are even waiting in the harbour, unable to offload their goods, while paper documents are processed. This is just one of the inefficiencies in trade that holds up the sale of goods, and the payment for them.

While banks are always looking to speed up the process of trade finance, the event is not about the bank looking for the next product it can use, explains Nick. “I’m looking forward to seeing these students walk around with smiles on their faces. More importantly, I want them to feel passionate about what they are doing.” 

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Experts from the bank taught the students about the intricacies of trade finance in the five weeks leading up to the challenge.

As well as bridging the gap between theory and practice, the experience also helps the students with the transition after they graduate. “The leap from university to work can be a bit of a mystery,” says Nick, and this event exposes them to senior executives at companies they may wish to work for.

Professor Jorge Sanz, Director of the Business Analytics Centre at the National University of Singapore (NUS) explains why making these contacts is so valuable for the students: “Networking opportunities and visibility are just as important as talent. I know many talented people who are doomed to failure because they do not have the exposure channel that makes that talent visible to others.” 

The challenge also gives the students an “opportunity to know what areas of business they are interested in and why. Knowing that is a privilege for students,” says Jorge.

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Professor Jorge Sanz, Director of the Business Analytics Centre, NUS

It is not only the students, however, who are learning in this collaborative environment. Dirk Claessens, Vice President, IBM Analytics, Asia Pacific, explains why it is important for companies like IBM to engage students: “The speed and amount of change of technology in the past five years is something I have never seen – neither have my colleagues who have been in business for 25 years,” says.

The way we interact with, digest and present information has changed dramatically, he says. We are now living in the world of apps, and technologies such as the cloud, data analytics, the internet of things, and blockchain, are highly disruptive.

Millennials who have grown up with this technology will soon be entering the workforce and dictating how companies use technology. 

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Dirk Claessens, Vice President, IBM Analytics, Asia Pacific

“Give them something that needs a manual and you can forget it. They do not read manuals – they want something intuitive,” says Dirk.

He and other senior executives will learn a lot as they observe these young people in action.

“For us to come to grips with how they think and how they act, how they behave is essential, that is why we need to include them in our thought process. We have lived our 90% of our career with something different and we need to get out of our comfort zone. They will help us do that,” says Dirk.

Four of the teams in the challenge were looking at how blockchain - or distributed ledger technology - could be applied to trade finance, and the other four were developing analytics solutions.

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Distributed ledger technology could be useful in trade finance because of the large numbers of parties in any transaction. Exporters, importers, banks, lawyers, customs all need to share documents for the trade to go ahead. Much of the process is still paper-based, which is susceptible to fraud.

By digitising documents and using blockchain, all the parties can access the same information in a way they can all trust. 

Take the traditional ledger, which is a single record of transactions. The problem with this is the owner can manipulate it, and it is only the owner who has access to it. Sharing this information through a database could be a solution, but many companies are unwilling to give outsiders access to their own internal records. And because all the parties involved in trade keep their own databases, there are likely to be discrepancies and different versions of the truth.

With a distributed ledger, however, the parties can add information in a more secure and trusted way because the processing and validation is spread over a distributed network of servers, rather than relying on a single point of failure.

This technology is still in the trial phase, but if it is applied successfully, it means documents can be can be processed quicker, goods get unloaded quicker, importers can make sales, and exporters can get paid, more quickly. In essence, innovation that is spawned from collaborative events like these can turn the wheels of the global economy more efficiently.

And maybe next time the students look out of the window at the amazing view, they won’t see ships waiting for paper documents to be processed.

 

Writer: Jane Cooper

Photographer: Stefanus Ian

Video: 90 Seconds