The Asia-Pacific trade finance ecosystem, challenges and opportunities - Interview with ING Labs

Wednesday 27 November 2019 10:11 CET | Editor: Andra Constantinovici | Interview

Paul Spronk, head of ING Innovation Labs Singapore, talks about the tech innovation and investment opportunities arising in the APAC trade finance and all the ways in which ING keeps ahead of the curve

What is ING Innovation Labs, how has the idea emerged? What needs does it address and who is it targeted at?

ING Labs focuses on driving disruption in value spaces where ING traditionally has a strong footprint, and where innovation can play a role in improving industry efficiency and addressing structural challenges.

In Singapore, we focus on the trade value space, which covers the entire ecosystem of goods that are traded globally, the adjacent network of services and financial flows. It is ING’s first innovation lab in Asia Pacific.

The Labs combines the best of both worlds: corporate innovation and entrepreneurial experience. We offer deep sector knowledge, a strong brand, a global footprint and access to clients and capital, all of which empower ING and our clients to stay ahead in terms of digital transformation.

What can you tell us about the Asia-Pacific trade finance ecosystem, how has it grown and why is it now such fertile ground for investments from global banks, corporates, and financial technology companies?

We see a number of major transitions taking place within the Asia Pacific trade finance ecosystem, particularly in Singapore, resulting in client demands that need to be addressed.

One key transition is the shift from analog to digital. The primarily paper-based trade finance ecosystem creates large inefficiencies for all players, especially with data and document exchanges. A lack of transparency in trade rules outside multilateral country agreements leads to redundancies, complexity and lack of standardization. Markets are seeing increasing ease of communications via API integrations. Emerging technologies like Distributed Ledger Technology (DLT), digital currencies and AI are not fully utilized yet, but will dramatically change how trade workflows are managed. Digitization can integrate disparate systems in supply chains and speed up verification processes significantly.

Another shift is the consistent transition towards greener offerings, resulting in the increase in Environmental and Social Risk (ESR) requirements for traders. This makes the sourcing of commodities and goods used increasingly challenging. A 2018 YouGov report showed that 50% of people in APAC believe that businesses have a responsibility to ensure their supply chains do not harm the environment.

We’re in a fast-changing regulatory environment, so the increasing legal certainty due to accumulation of case law and expanding number of trade agreements create growing regulator burden for ecosystems such as KYC, AML, open banking and data privacy and the increasing cost of capital for banks (Basel IV).

All these factors contribute to Singapore being a fertile ground for investment because the Asia Pacific region has a large strategic investor base here, including VCs, PE houses, and family offices. There is an overall market appetite and urge for innovation, making the nation and the region a vibrant location to achieve business goals and success.

One of the projects the Singapore Lab has been working on is SoptAI – what are some problems the system solved?

SoptAI is a cloud-based SaaS platform that enables customers to generate accurate demand forecasts and inventory optimization leveraging the latest auto machine learning techniques. 

It works by ingesting structured data, such as historical sales and promotion data, external data such as the weather, rainfall and traffic, and unstructured data like social media and images. Collectively, these data sets are analyzed and fed into a machine learning engine for automatic modelling, which generates accurate demand forecasts and insights.

The SoptAI founders have over 20 years’ experience in supply chain and data science. It is currently focusing on working with consumer-packaged goods and retail companies help them reduce inventory, lower working capital costs and loss in sales, but will at a later stage be spread across other client verticals.

Can you share with us some details about the other projects ING Labs has been working on in Asia Pacific, such as Kapsool?

Kapsool is a Singapore-based digital agency that optimizes port call workflow, helping in port ecosystems to streamline communications and maximize operational efficiency.With Kapsool, users can 1) effectively manage documents, 2) clearly communicate with people that are relevant to tasks and 3) easily match scheduled plans to actions. These features form the identities of vessels as they journey from port to port, allowing them to work around the entire ecosystem in one workflow. This gives users the ability to infuse more diligence in their efforts, freeing them from menial tasks and enhancing human interactions.

What are some rising trends in tradetech that the lab is exploring for boosting trade finance in the region and that can be used to keep up with the structural changes taking place in the global trade ecosystem?

Our partnership with Flowcast, a Silicon Valley-based fintech specializing in AI-based smart credit decisioning for FIs and corporates, is a good example of this.

At the start of this year, ING Labs Singapore started a pilot to explore the viability of a strategic partnership between ING and Flowcast. This pilot set out to prove the value of such a collaboration for credit decisioning business lines within ING, ING’s corporate clients and Flowcast to support its validation and growth. As a result, numerous ING corporate clients have been involved and within ING a proof of concept has been completed with various business lines such as Working Capital Solutions, Trade Tribe and Credit Risk. Now, we move to ‘partnership’ phase where we scale up distribution to more relevant ING clients globally.ING Ventures announced in September that it was co-leading a USD3M series A funding in Flowcast, alongside Bitrock Capital.

What is on the agenda for ING Innovation Lab moving forward? What would be some forecasts for the market in the next year and how does the lab plan to engage in the APAC environment?

Our goal is to develop scalable tradetech solutions that will solve major structural industry issues with a positive impact on the local economy, and beyond.

Moving forward, ING Labs Singapore will continue to grow our talent team in terms of size and skills and look for the right venture investments and partnerships that will bring strategic value to our platform. It will also continue to generate new revenue stream and bring cost reduction for ourselves and our clients.

About Paul Spronk

Paul Spronk is the Head of ING Labs Singapore. He leads the Asian innovation activities for ING Wholesale Banking and is responsible for the origination, validation and scaling of ING’s innovative ventures across the bank’s network. Paul has a background as an entrepreneur in digital retail services, and has guided multiple innovation projects for ING.  


About ING Labs

ING Labs seeks to bring disruptive ideas to market by combining the bank’s knowledge and network with the knowledge and skills of others, including startups, scale-ups, researchers, entrepreneurs and other corporates. There are currently four ING Labs globally: Singapore, Amsterdam, London and Brussels. Each is focused on specific value spaces that best match the local expertise and ecosystems in these locations.  

The Singapore Lab focuses on tradetech and global trade and is the bank’s first innovation lab in Asia Pacific. It explores emerging technologies such as artificial intelligence and distributed ledger technology to enable greater efficiency within the supply chain and disrupt trading and trade financing.

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Countries: Singapore