Introduction and Background

In 2021, Commodity Technology Advisory LLC (ComTech) published its first Disruptive Technologies research report (that version kindly sponsored by FIS). Technologies covered in the study scope included cloud/SaaS, Artificial Intelligence (AI), Machine Learning (ML), big data, automation and blockchain, amongst others. The findings were supported by an industry survey that led to the broad conclusions that cloud/SaaS and data management initiatives were in flight. AI, ML and automation seemed to be prepping for an explosion of use while blockchain was overhyped and lagging. Over the last couple of years, our general market observations as analysts have largely confirmed the results of the research.

In early 2021, ComTech decided that the whole topic was worthy of a revisit as a result of many changes and trends in the industry and so began a new project. This report is the result of those efforts, and it was kindly sponsored by Invensoft, Kyos, and Commodities People.

The entire commodities complex is undergoing significant change, driven at least in part by COVID and the resulting lockdowns. Other drivers for change like geopolitics, regulatory pressure, and increasing emphasis on cost containment and improving efficiencies in the physical side of the industry and commodity supply chains, have been sharpened by issues such as climate and sustainability. In turn, more environmental, social and governance (ESG) aware investors and consumers are also demanding and/or driving changes. Trade finance is also included in this mix of influences with the exit of many banks from the space and the increasing reliance on innovative nontraditional sources of financing. Just how were these ongoing changes, challenges and trends impacting the application of disruptive and other technologies in the commodities industries?

Digitalization has been an ongoing trend within the commodities complex for several years now and it has been accelerated by many of the business drivers noted above; and particularly so recently with the requirement for commodities companies to move to a work from home model – one that has exposed any number of process and technology weaknesses. In turn, digitalization has driven continuing investments in various technologies such as cloud, data management, workflow, automation, AI and ML. Innovations associated with digitalization, along with the other noted trends, also appear to often be catalyzed by disruptive technologies. For example, we now see AI being used to enhance commodity price forecasts, which has in turn induced several new providers leveraging AI to enter the price forecasting market. Automation facilitated by advanced technologies, particularly robotic process automation (RPA), is also being adopted by vendors and users, particularly to help guide and control processes via a distributed/home-based workforce.