As 2022 dawns, Etienne Amic, CEO of VAKT, discusses what the new year holds for technology adoption within the commodity trading space, and outlines the role the blockchain platform for commodity post-trade management will play in creating a digital ecosystem for the future.

How have the events of the past two years impacted technology adoption in the commodity trading space?

Much of the technology in the physical oil trading space dates back to the 1990s and 2000s, and there was really very little impetus to upgrade – until recently. Covid exposed a lot of weaknesses in systems, so where previously people may had been planning to invest over the coming five years, the pandemic injected a real sense of urgency.  

As a result, over the past two years, we’ve seen everyone, from trading companies to service providers, inspectors, terminals and agents, begin to overhaul their systems, with a big focus on applications that can extract, analyse and ingest data.  

In parallel, we’re seeing a shift in perceptions towards blockchain. For a long time, many within the industry saw it simply as a technology looking for a use case. Today, it’s very clear that this is far from the reality. Blockchain is making inroads into real life, into real supply chains, and into the real economy, across numerous industries. We’re beyond the point of proofs of concept; blockchain has had its utility demonstrated and it is here to stay.  

Are the conversations you have with the industry changing?

Absolutely. The terminals, inspectors and agents have gone from asking themselves whether or not they should integrate with VAKT to asking us how they can integrate as soon as possible. We’re seeing the push come from our trading company clients too; they’re increasingly encouraging their partners to join the platform in order to continue working together.  

Across the industry, the need for digitisation is very clear, and progress is being driven on numerous fronts. In Singapore, for example, the government has produced open-source protocols through TradeTrust to effectively help the market to digitalise. They are also working to standardise API communication between different players, as well as forcing banks to put their transactions onto a central repository to check that a cargo has not been financed multiple times.  

In addition, legal reform is underway in numerous jurisdictions to enable the title of a physical cargo to be recorded electronically as opposed to on paper. It’s a multipronged effort that is really beginning to bear fruit.  

How do you see VAKT’s place in the market?

As a technology provider, we are focusing very tightly on where we can provide the most benefit to the industry. Our core value proposition remains digitising the global commodities trading industry, creating a secure, trusted ecosystem, powered by blockchain, smart contracts and machine learning – and we continue to make progress. Something that has become increasingly important of late has been the concept of interoperability, since there is a very real risk that the huge push towards digitisation creates digital islands rather than an interconnected ecosystem. Our clients are looking for integrated services that work harmoniously together to meet the needs of the industry. Since VAKT’s inception, we have been building an ecosystem, from traders and brokers to terminals, inspection companies and trade finance banks and platforms, and 2022 will see us place even more emphasis than before on partnerships.  

What will trading companies be asking of VAKT in 2022?

2022 marks the beginning of the next phase of the digitisation journey for our clients. They have already taken the decision to invest, and they now want to see how the platform can work for them. The big difference is that they want us to fit into their digitisation roadmap, rather than the other way around. What they need from VAKT is for us to help them see the bigger picture, and what the digital infrastructure of the market is going to look like, to enable them to focus their efforts over the coming years.

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