Demica’s trade receivables solutions were previously only available through the company’s internal systems, reports noted. By opening its platform, it’s easing access for financial institutions (FIs), and connecting them to the firm's transaction management solutions.
Corporate clients can upload their unpaid invoices through the platform, which banks can assess to finance the bills that meet their particular risk exposure thresholds. Demica also handled the client onboarding process, as well as uploading banks' risk criteria to the platform.
Later this year, however, Demica will enable banks to manage these processes themselves, and set up transactions with their corporate clients. To support this, Demica is introducing new dashboards for FIs to directly upload term sheets, and automate reports and payment messages.
Reports noted that the platform will also be available for white-labeling, allowing banks to integrate the tool into their own offerings to corporate customers. Furthermore, the new dashboards will support bank and corporate access to real-time performance details of a trade receivables financing transaction. Five to seven banks are expected to white label the solution in the coming years, the firm’s CEO Matt Wreford told the publication.
The upgrade also supports regulatory requirements from the European Securities and Markets Authority that mandate the securitization of reporting, including invoice-level transaction data.
Demica’s initiative to open its trade receivables financing portal for banks directly comes as FinTech firms and FIs are exploring ways to address a massive global trade finance gap, without surpassing risk exposure thresholds. Earlier this year, BNY Mellon found that trade finance rejection rates have actually risen.
“Our survey has shown that a significant proportion of institutions are increasingly unable to provide trade finance, due to heightened regulatory requirements, as well as several other trends,” said Joon Kim, head of global trade product and portfolio management for BNY Mellon Treasury Services, in a statement announcing the report in April.