A few years ago, we reached late stage discussions with a major global bank. It was considering rolling out a global license of Bolero but all had gone quiet. Having met with a senior decision maker – who was very enthusiastic – we got to the bottom of the situation. Although the senior team was convinced by the technology, they were worried about standing out from everyone else and were waiting to see what other global banks would opt to do.
Like many others, the hesitant decision-maker was concerned that competitive organisations would choose an alternative network which would later turn out to be the option everyone else went for. When we explained that Bolero could be offered to its enterprise customers without committing the bank to a long-term strategic commitment or tie-in, he signed the agreement on the spot.
What this experience highlights is that there is a real danger that banks delay bringing in new trade finance capabilities because they focus too deeply on what may or may not end up being the ‘standard.’
In many ways, this is not unlike waiting for a new, standardised phone network to replace landlines, mobile networks and VoIP – it’s unlikely to happen any time soon. And in the meantime, while everyone else is already communicating – or figuring out the best way to do so – your organisation looks pretty quiet.
As such, the solution to not having multiple standards for trade finance technology is not to create one single standard – or wait for one to emerge – but rather to focus on the higher value.Instead of getting stuck in the debate about who or what system may come out on top, when it comes to the complex issue of interoperability between different counterparties, geographies and formats, systems vendors and banks should instead be working collaboratively to unlock new value and efficiencies for enterprise customers and the wider trading community.