JP Morgan has announced their partnership with Cleareye.ai to bring ClearTrade®, a trade financing digitising solution, to banks. The platform will be integrated into JP Morgan’s Trade Processing System that has rolled out in the APAC region and will be launched globally in the coming months.
Global head of trade at JP Morgan, Stuart Roberts, and CEO of Cleareye.ai, Mariya George discuss how ClearTrade® aims to make trade operations and compliance easier and more efficient for banks.
Digitisation has been a weighty discussion in trade finance for years, Roberts explains that JP Morgan’s path towards the solution involved challenging multiple tech providers and spending long hours developing a rules-based algorithm.
“If you think about the algorithmic rules, and start out with the five hundred rules that we need to make sure we capture, we then need to expand that across a complete set of documents and potential variables around it. You are looking at hundreds of thousands of potential outcomes. The machine needs to quickly go through that to be able to come to the right conclusion,” details Roberts. “That technology, even though it has been talked about by various participants over time, we haven’t seen a material proposition – until Cleareye.ai.”
George expounded on how ClearTrade® works as a Trade finance operations and compliance automation product: “There are paper documents moving between banks, shippers, and exporters. What we try to focus on is the ability to automate ingesting these paper documents and understanding industry documents.
“There are rules and regulations that trade has to adhere to in order to check against all those regulations, understand if there are any potential red flags, any sanctioned entities, any compliance related issues. ClearTrade® can highlight all that and generate a report to make it easier for a trade operations person to do their job.”
ClearTrade® provides a solution to the gap in trades operations people who manually manage hundreds of pages of documents that newcomers to the industry do not want to participate in. George explains that banks are in a way being forced into automation due to this gap in the industry. More importantly, she adds, is that trade finance needs to be adopted at the same speed as regulatory demands and sanctions are imposed, and it is imperative that the sector adapts to that.
Roberts adds that banks may find it difficult to comply with incoming regulations without new technology to match their needs. In the current geopolitical climate, new sanctions are constantly being imposed, costs are increasing, and people in trade offices need help to keep up. George and Roberts believe that ClearTrade® offers a solution to those processes.
George expands on the solutions provided by the platform: “People are manually going through assets in many of the banks today. It’s very human-centric; people can make mistakes. When a system is doing it, everything is auditable, everything is traceable, every transaction is monitored. We have a full audit log and history of everything that has happened, so it’s even more robust than how it would have been with a human doing it. This also helps from a regulator’s point of view.”
JP Morgan receives nearly 4 million individual documents into their offices that, while digitised, still require human involvement; ClearTrade® provides the ability to cut the three hours it takes humans to review those documents down to around ten minutes. Roberts explains that this process opens up a whole suite of new features, such as identifying trends in fraud, trade-based money laundering, workflow examination, and collectively building a compliance module.
Roberts believes that the solution will improve the efficacy of trade services that will allow for more banks to stay in the sector for longer than they would have otherwise been able to without ClearTrade®. He continues: “With this partnership, commercial framework, deployment, and then a rollout across all of our global sites, ClearTrade®is going to massively improve efficiency within JP Morgan. But more importantly, I think it has the potential to become an industry benchmark.”
Speaking on the future evolution of trade services in the process of examining documents and dealing with letters of credit and collections, Roberts details: “I think the technology aspect of trade services will go through platform realisation around one or two industry wide standards. That will then create the economies of scale and allow for banks to join on an OpEx basis rather than a CapEx basis.”
“Our intent with this first step with Mariya and ClearTrade® is to build that industry platform. The first and most difficult piece is the rules-based, efficient doc exam engine and compliance module. From there, the challenge is how we take JP Morgan’s trade platform itself and make it cloud native and able to be used as an industry wide platform through ClearTrade®.”
Roberts expresses that the most difficult aspect of perfecting ClearTrade® was achieving a robust, high-level, automated, straight through processing platform with correct workflow and positive outcomes. He states that Cleareye.ai’s technology stood out in their machine’s ability to learn from prior mistakes and improve to hit higher efficiency ratios.
Roberts concludes: “ClearTrade® should be the first solution where you see an absolutely seamless solution end to end from OCR all the way through to doc exam, to compliance check, vessel checking, military use policies, and then ultimately, a state of the art trade platform for all of our clients.”