"Komgo offers a unique solution for the aggregation of data and software needed by firms engaged in international trade. A major step on the road to interoperability, capable of reducing the risks associated with digitalisation for corporates and banks."
By: Souleïma Baddi (first published by ICC France in Echanges Internationaux n°124)
Komgo is a fintech company that was created in 2018 by major banks and corporations, with a total of 24 investors today, including BNPP, Crédit Agricole, Natixis, Société Générale, TotalEnergies, among others. They decided to cooperate to create a robust and agile infrastructure capable of systematically (and at a large scale)supporting the digitalisation of their exchanges. To date, Komgo is the most widely adopted multi-bank solution that enables companies to secure and accelerate the processing of their international trade operations.
There is an increased global demand for efficient and interoperable digital solutions. The Covid-19 pandemic has been a powerful catalyst for the digitalisation of international trade, highlighting the need for digital solutions to maintain the continuity of trade while leading to a significant increase in operational costs. This increase in costs is due to the implementation of numerous additional controls and an unstable geopolitical context, exacerbating the operational risks associated with documentary fraud.
The digitalisation of processes has demonstrated significant efficiency gains and cost reductions, making digital transformation a central part of companies' strategies. The evolution of legal frameworks and platform interoperability have become priority issues.However, the use of electronic documents in international trade remains limited due to various barriers, particularly the lack of institutional harmonisation. Rapid legislative changes are therefore necessary to grant electronic documents the same legal value as paper documents. In this regard, the Model Law on Electronic Transferable Records (MLETR) of the United Nations Commission on International Trade Law (UNCITRAL)is expected to play a fundamental role. Another essential point is the ability to support the daily implementation of this law within companies.
Komgo, the digital aggregator of international trade operations, has always considered integration as the key to adding significant value because it allows actors to take advantage of all the benefits promised by digitalisation. Integration projects can be complex and costly. In order to make such investments profitable, banks must capture a critical mass of transactions.This systematic digitalisation vision led us to strengthen Komgo's digital offering through the acquisition of Global Trade Corporation (GTC) in December2022.
Global Trade solutions are used by more than 50 multinational corporations and their 11,000 subsidiaries, enabling them to connect with all their financial partners globally via email, Swift, or a web-app. To further expand the communication channels offered to Global Trade users, our integration capacity was mobilised to add a new channel that allows fully standardised and automated connectivity between these multinational corporations and their banks.
The acquisition of the Global Trade solution suite has paved the way for the implementation of true interoperability between trade systems. Komgo now positions itself as the only multi-bank and multi-channel aggregator of international trade, offering financial institutions the opportunity to receive all these operations in a completely automated manner, reducing execution costs while ensuring better control of operational risks.
Despite market consolidation, the numerous digital silos or islands that persist in the industry represent a major obstacle to large-scale digitalisation. Companies and banks still require multiple software and connectors, which generate additional costs. There is a strong demand for a solution capable of aggregating increasing amounts of data, regardless of the channel, and allowing banks to integrate via a single connector. Komgo has achieved several key milestones on this path to interoperability by connecting many actors who can now exchange data and documents according to their operational needs.
To address the challenges of digitalisation, Komgo follows a clear strategy: increasing the added value and development of the platform by incorporating digital documents as soon as the regulatory framework allows users to benefit from guarantees equivalent to those of paper documents. In companies, the obstacles to digitalisation and innovation are not solely technical; they are also related to change management. Another important aspect concerns regulators, who must quickly familiarise themselves with these new tools to enable the industry to reduce operational risks, which could lead to a relaxation of regulatory capital requirements.