Technology company TO VERIFY combines agility and experience to provide transparency to a growing list of commodity companies
By bridging the gap between the physical and digital aspects of the world of raw materials, TO VERIFY helps reduce risk in the commodities industry, according to Sean Birrell, chief technology officer (Technical director) and co-founder of TO VERIFY. The digital verification platform provides manufacturers, banks, traders and other financiers with real-time monitoring of commodity supply chains, while meeting the growing need to manage carbon emissions.
In addition to reducing risks, such as physical risks associated with commodities or process risks associated with financial commodity transactions, the technology also enables greater transparency regarding the types of transactions that can rely on inspections. or self-declaration models. “Structured commodity finance uses the underlying commodity as collateral to secure the transaction,” says David Thambiratnam, CEO (CEO) of TO VERIFY. “Not having a line of sight to the warranty can be quite risky, so they will often go to great lengths to send inspectors to monitor the asset and confirm quantity and quality. The technology reduces the need for such inspections, increasing transparency for both the bank and the customer, and uses real-time data to establish a version of the “truth” about the asset.
For example, Macquarie started using Adapt Supply Chain Financing (AdaptSCF) – TO VERIFY– in July 2018 to support a diesel fuel purchase and storage agreement with a mining company in the Arctic Circle . Given the remote location of the mine, Macquarie can store fuel on site and use the platform to monitor usage. The bank and the mining company can access the same inventory information through the platform to agree on a pay-as-you-go payment. As such, AdaptSCF is helping meet Macquarie’s internal credit approval requirements for this deal and has also helped free up working capital for the mining company.
TO VERIFY uses sensors in the field to collect real-time data on the underlying commodities to provide this service. This information is fed into a central platform which also offers execution and visualization tools. The sensors used to collect the data depend on the type and location of the products, but may include flow meters or 3D scanning of inventory. “We collect this data and validate it against digital documents or other records and logs for reconciliation purposes,” Birrell explains.
During the second quarter of 2020, the company – then called FluidIntel – changed strategy as the former Technical director Thambiratnam took over as CEO. Work with Birrell, TO VERIFY has developed a banking offering to sit alongside its existing mining and resources branch. Therefore, TO VERIFY is currently in talks with over 20 major financiers and traders to come up with supply chain finance deals, including floating vessel and terminal storage deals, as well as a refinery deal and storage opportunity fuel in China.
Birrell and Thambiratnam say that this shift to targeting the banking sector marked the start of an “innovative trajectory” for TO VERIFY. She has since deployed new technology solutions designed to reduce theft and fraud, while managing supply chain finance and emerging environmental goals. “Our underlying strength is that we use the same commodity, so when we work with banks we can reassure them that we have been around for 15 years and our technology is already being used every day to monitor UA$ 5 billion in commodities, ”Thambiratnam says.
The company’s start-up mentality has also impressed banks, according to Birrell, especially since he says it helped TO VERIFY to deploy new tailor-made solutions in less than three months. “We’re ready to experiment and pilot solutions, especially for emerging technologies, but we’re also looking for a fast track to commercialization,” Birrell adds. “This start-up agility is well received and we have found the banking industry very open to sharing its challenges and discussing new ideas. “
For many organizations in the raw materials sector, a major emerging challenge is the need to respond to the environmental concerns of stakeholders, especially as the energy transition is looming. TO VERIFY has already responded by adding carbon emissions reporting capabilities to its platform. This supports customer efforts to offset emissions from the production, transportation, storage and consumption of hydrocarbons through real-time monitoring and visibility of supply chains.
“As a cloud-based platform, we are constantly adding and iterating,” says Birrell. “And I think everyone understands the current environment in which commodities players are making net zero commitments and banks are making statements about the types of businesses they will finance and the governance they expect from them. clients.”
Accuracy of reporting is essential here, but it creates an additional compliance burden. “Companies want to show that they are meeting the requirements or obligations of the pacts, for example, which is going to require a lot of information exchange, although this is currently at a very early stage,” Birrell explains.
“Our main ability is to connect the physical to the digital,” continues Thambiratnam. “And so, whether it’s ensuring the validity of emissions reports or reconciling $ 100 million worth of bauxite in a mine in the middle of China, we can help our customers establish the truth about these assets. “