Synpulse's New Data Engine: Global Trade Analytics for Banking

The US$16 trillion1 global trade finance market grows continuously and banks are eager to expand their wallet share. The increasing number of importers and exporters, and their financials, create a tremendous amount of data storage on separate digital islands.

As an innovator, Synpulse has developed a new solution called the Global Trade Analytics for Banking (GTAB), which was recently shortlisted in the TechChallenge organised by the Hong Kong Monetary Authority (HKMA) and Bank for International Settlements Innovation Hub (BISIH) in Hong Kong. The solution efficiently and securely connects the dots, allowing the banks to accelerate their transformation with GTAB's powerful insights that are generated by data science with gold standard data quality.

Market challenge

Despite the negative impact of the COVID-19 pandemic on economic activities, the global trade finance market is still expected to accelerate the compound average growth rate (CAGR) by 4% from 2020 to 20242. TradeTech is gaining momentum and is quickly becoming a significant player in the FinTech space, pushing the industry to evolve with manifold opportunities and risks, both for front-office and back-office operations. A proper assessment of the five major market trends is necessary for banks to navigate their offerings and service potential, as well as define an appropriate product roadmap.

Market trend 1: Macro and socio-economic developments

Global trade negotiations impact regional trade policies and business practices. For instance, the US-China trade war, the Belt and Road initiative and the EU Carbon Border Tax have and will shift trade corridors and compel corporates and small-and-medium enterprises to revise their supply chain strategy in outsourcing, close, near- and offshoring.

Market trend 2: Technological drivers

The rise of RegTech has been vigorous in know your customer (KYC), anti-money laundering (AML), and transaction due diligence with the advancement of machine learning (ML) and big data. Financial institutions have started introducing electronification, empowered by natural language processing (NLP) and optical character recognition (OCR) into their operational process, not to mention the high-profile Blockchain and distributed ledger technology (DLT).

Market trend 3: Competitive landscape

The emergence of niche players and non-bank lenders is increasing while there is a regional market consolidation among banks. The intensified war for talent has dwindled trade finance expertise at banks and corporates. Rapid Business transformation becomes the key to sustaining the success and creating opportunities for new way of working.

Market trend 4: Changing business models

The multitude of DLT consortia are competing for first-mover advantage to enlarge the gaps in network effects and commercial viability. The tokenisation of financial assets is no longer a concept but a real implementation, and market participants are adopting multi-banking for trade finance services.

Market trend 5: Regulation

The evolution of international rulebooks and messaging standards (SWIFT and ICC uniform rules for digital trade) is ongoing. Likewise, local authorities are increasing requirements for KYC, AML and Fraud Detection. Banks are expected to comply with the constantly changing and complex sanction regimes.

Synpulse presents: Global Trade Analytics for Banking

To accelerate banks’ adaptation to the vibrant global trade market, Synpulse has developed a new data engine called the Global Trade Analytics for Banking or GTAB for short. With our data-driven and AI-powered solution, GTAB benefits multiple key stages of the trade finance lifecycle: lead origination, customer onboarding, risk profiling, trade surveillance, collateral management, and portfolio optimisation.

GTAB allows banks to leverage existing internal data and tap into new external data sources. Both structured and unstructured are loaded, cleansed, and transformed with advanced data analytics to generate powerful insights and realise business benefits. Banks can also better mitigate risks and control operations. GTAB outruns market competitors with three winning themes.

Theme 1: Accelerator

A RAPID access to business benefits realisation and competitive advantage:

  • Rapid access to analytics for banks to quickly response to the market and customers’ demands
  • Actionable insights are clearly presented to encourage accurate and timely business decision.

  • Proactive interaction with banks users and importers/exporters through smart data intelligence.
  • Integrating people, process and technology into a value-adding trade finance transformation.
  • Data-driven business decision to secure logical and unbiased positive business outcomes.

Theme 2: Analytics ready

A real-time straight through processing from raw data is embedded to create actionable insights via multidimensional reporting and analysis. All data sets are readily modelled and cleansed by the in-built data quality machine. GTAB performs screening and profiling of data to determine the quality level of data, with data issues and anomalies reported automatically. There is a data loss and corruption prevention layer to avoid data accidents, and users can quickly access the interactive and intuitive dashboards.

Theme 3: Connectivity

GTAB is a linkage for banks to access massive data pool by connecting more than 20 valid data providers. It expedites user interaction with data and enables efficient collaboration. The infrastructure agnostic solution integrates and links data from various sources and types: internal to external, structured to unstructured, traditional to alternative, and proprietary to free.

Use Case 1: GTAB data analytics in customer segmentation and marketing

GTAB performs user classification and association pattern analysis to generate a real-time market report and help client to segment customers for a more precise and focused marketing strategy to cross-sell products.

After integrating the internal bank data and external data into GTAB, the data engine will cleanse the input and transform them into one centralised systematic database with gold-standard data quality. Our data scientists have developed the data model to perform user classification, association pattern analysis, and client grouping to segment potential customers.

To evaluate the reasonableness of the machine, GTAB will conduct back testing with sample data to generate predictions with multi-layered inputs. Lastly, the recommended user segmentation with customised product list and real-time market trend monitoring will be available for lead origination. With no human bias, the hidden patterns in massive data size are now identified with great scalability.

Use Case 2: GTAB automation for KYC and AML risk profiling and real-time fraud detection

GTAB allows banks to automate KYC and AML risk profiling from massive data sets to catalyse investigations at onboarding. The business will be capable of making timely actions on any real-time alerts generated from any suspicious business activities.

In the data engine, corporate and personal information will be cleansed and consolidated into a customer package, which facilitates frontline and CDD team at the client onboarding and periodic reviews. The package will highlight client basic information and their risk classification on individual, company, counterparty, industry, shell company, bribery, corruption, modern slavery, sanction, PEP and adverse media screening.

GTAB also generates real-time alerts for an enhanced business activity monitoring. Red flags will be prompted with third party payments, goods against nature of business, abnormal vessel, country of origin and destination match, dual-use goods, unusual pattern in cash, credit balance and trade volume. AML and Fraud teams can also rely on GTAB’s report as a consolidated case file and save time gathering inputs from different applications and teams.

GTAB's prospect

As GTAB has been shortlisted in the TechChallenge. Digitising Trade Finance organised by HKMA and BISIH Centre, multiple banks have expressed their interest in GTAB and are looking forward to the successful proof of concept of this new-to-market data engine. Leveraging its well-established BANKINABOX® methodology and DataManagementINABOX framework,
takes a holistic and integrative approach with its solution-building, go-to-market strategy, and end-to-end implementation. GTAB will accelerate the steps of banks in connecting with digital islands and drive the transformation to better serve the global trade finance community.

1 The Trade Finance e-Marketplace – Digitizing the exchange of Trade Assets, Fintech Innovations International, 01/2019

2 Trade Finance Market by Trade Finance Instruments and Geography – Forecast and Analysis 2020-2024, Technavio, 03/2020

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