TradeCloud was started 5-years ago by four co-workers from companies like Trafigura who had a lot of expertise and a vision around digitalization in commodities. Its initial focus was on a communications platform for metals commercial users and, based on the success of developing that, a similar platform for energies like coal, oil, refined products, and so on. It has now also released a post-trade component that utilizes the blockchain and intends to connect to a wide range of third-party services and develop an API to connect to commercial CTRMs prior to the end of the year. This week, I had a briefing and demonstration from Matthew Bottell, COO of TradeCloud based in Switzerland.
The first thing that Matthew is keen to point out is that TradeCloud is NOT a CTRM. It isn’t either. After seeing the demonstrations, it is essentially a communications and collaboration platform for commercial users and for post-trade stakeholders. The Metals and Energy apps allow negotiation, price discovery, digital contract generation, and complete KYZ processes with built-in secure chat. The post-trade platform called the TradeCloud Commodities Web (TCW) utilizes a shared ledger based on R3’s Corda solution and links all service providers and stakeholders together along with a variety of services like goods tracking (Roambee), and eDocs via Bolero and digital LC integration to follow with Contour. The solution set is all available in the cloud over MS Azure.
In fact, TradeCloud addresses the very problems and issues in physical commodities that most have complained about for years and that aren’t often covered well by CTRMs, ERPs, or other solutions – although it should be said that many are moving in this direction. That is ensuring collaboration between teams internally and externally in an ordered, secure manner that optimizes activities while providing a complete audit trail of all actions, documents, and conversations along the way.
In trade negotiation, the solution uses a number of setup configurations like a workflow application to allow appropriate communications and a number of other setup and configuration items to define various contract terms and conditions. Users can set up sales and purchase proposals and share them as broadly or as narrowly as they wish while others can explore the sort of deal they may be interested in. Once both sides of a deal are moving forward, each step is recorded and captured whether it be a contract or deal changes via conversation or edits and it is all done in a way to highlight what has changed and what needs to get done next. Once accepted, a legally binding contract is created. The solution also covers the KYC process in a similar way such that parties can exchange documents and go through an organized process securely and have a complete audit trail at the end of that process.
The post-trade aspect also has a bit of permissioning and set up to configure of course though nothing so very complex. It seems straightforward to achieve this. The trade is then imported and the system shows the work that each person and organization needs to do following it through to completion. Amendments can be made to the contract, parties notified of events like insurers, warehouses, logistics firms, banks, and so on and everything is auto-filed as the processes are worked through. All are written to the blockchain for security, trust, and confidence. The highly complex and often manual steps are digitalized as a result.
Matthew relates how fraud, for example, can be minimized using the solution. If the goods were sealed in a container, for example, any tampering with that would result in notification via the Roambee goods tracking solution and any deviation from route noted via GPS. Insurance documents issued can be automatically sent for verification to the insurer and their response recorded as can warehouse certificates and so on. “The system promotes trust but also acts as a deterrent as well,” he said.
TradeCloud is engaged in pilots at the moment with a number of ‘large players’. However, it seems to us that this solution fills a need in the market and with a good design, UI and functionality, it should gain traction we feel.