By André Casterman, Casterman Advisory and ITFA Board

This article has been published on September 19, 2022 on LinkedIn.

We presented advanced technology innovations during the 4th edition of the Fintech Committee briefing that took place in Porto on September 7th 2022. Progress achieved was very palpable, in particular when it comes to addressing a major industry pain point, i.e., the interoperability conundrum in trade financing.

Vivek Ramachandran, HSBC’s global head of trade and receivables finance put it recently in perspective during an interview with The Banker: “Individual organisations such as HSBC have made huge progress as 85% of all trade transactions are initiated digitally. Where progress has been slower is where it requires collaboration. It feels like 2 steps forward, 1 step backward.”, he said. “Interoperability is the holy grail, and it’s not up to one player to help banks, insurance companies and logistics companies collaborate. As an industry, we need to do better.”

The industry is now starting to do much better indeed, mainly thanks to fintech developments that we showcased in Porto. We can summarise findings as follows:

What did we learn in Porto with regards to interoperability? How are fintechs helping financial institutions on this front? How does DLT feature into this evolution?

Here are my 4 take-aways:

Take-away #1: Digital asset technologies have been successfully implemented in 2022 across two critical industry-wide use cases. The recipe for success has been focus on the end-user value propositions, rather than on the use of DLT per se.

Take-away #2: As DLT finally gets used, we need to start thinking in terms of functions that are operated “on-chain” vs. “off-chain”. There is no absolute need to migrate an end-to-end process on chain from the start.

Take-away #3: New bridges are being delivered by fintech companies and those demonstrate how interoperability ought to be tackled.

Take-away #4: DLT-based interoperability solutions will expand in scope, thereby gradually moving more functions “on-chain”.


Interoperability solutions have existed since decades such as SWIFT messaging for instructions and reporting, and email communication for notifications. They now power some SaaS platforms in treasury (e.g., Kyriba) and trade (e.g., GTC, Mitigram). But new ones are become critical to support the market in digitising additional transactional flows (e.g, negotiable instruments) and in engaging with new stakeholders (e.g., retail and institutional investors).

Interoperability solutions come in different forms depending on the use cases, and contribute to increase connectivity in trade and trade finance. Some will embed DLT on a selective basis as depicted below:

Our 4 take-aways can be summarised as follows:

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