Trade Finance – an evolutionary time Rapidly changing environment is driving the development of new electronic platforms Globalization of business & movement to treasury centralization to drive efficiencies Move from Commercial Letters of Credit to Open Account Increased regulatory scrutiny • Sarbanes – Oxley; USA Partiot Act; AML requirements Drive for streamining of Global Supply Chain management Increased number of bank relationships & subsidiary activity results in less control over treasury management Multiple interfaces / connectivity to various electronic banking systems Investment in new technolgy is a constant priority for corporates & banks
Transcript
Trade Finance – an evolutionary time
Rapidly changing environment is driving the development of new electronic platforms Globalization of business & movement to treasury centralization to drive
efficiencies Move from Commercial Letters of Credit to Open Account Increased regulatory scrutiny
• Sarbanes – Oxley; USA Partiot Act; AML requirements
Drive for streamining of Global Supply Chain management
Increased number of bank relationships & subsidiary activity results in less control over treasury management Multiple interfaces / connectivity to various electronic banking systems
Investment in new technolgy is a constant priority for corporates & banks Greater integration, flexibility & efficiencies across systems & operations
Banks and corporates embark on the same objectives to optimize trade processesing …
increase process efficiency and security
reduction of costs through improved process efficiency and increase of STP (straight-through-processing)
lower operational risks due to reduction of manual processing
complete audit trails for monitoring of all process steps (audit compliance, US-GAAP, SOX)
integration with existing ERP/BackOffice Systems
… but follow different concepts
low
high
high
bank
s pr
efer
ence
s
customers preferences
proprietary Bank applications
(one-to-many concept)
Multibank /-participant
platform
(many-to-one concept)
external communication
gateways
(e.g. Propriatary networks, DTA,
secure email etc.)
Proprietary bank systems (one-to-many concept)
Bank
Client
Client
ClientClient
Client
Client
Bank view
high level of BackEnd integration
highest STP-ratio possible
high level of customer retention
Customer view
use of various bank portals
data is hosted on various external resources – difficult to consolidate
no customization
no ERP/ Back-Office intergration
External communication gateways (e.g. Proprietary networks, DTA, secure email etc.)
CorporateBank A
Bank B Corporate
Service Provider A
Service Provider C
Service Provider B
Bank view• BackEnd integration needed separately
for each message format • use of network results in additional cost • low STP-ratio if not integrated into
BackEnd systems• data transmission via web requires PKI
agreements
Customer view
separate BackEnd application needed
use of network result in additional cost
ERP/ Back-Office intergration is cost intensive
the concept of data exchange via external networks leads to multiple identical data sets
data transmission requires PKI agreements
Multi bank/participant Platform (many-to-one concept)
CorporateBank 1…n
customs carrier
supplier buyer
insurer
Customer view
one data source
customization possible
easy ERP/ BackOffice integration
complete audit trail
all participants in a transaction can be involved
Bank view
no participation fees
BackEnd integration can be staged (depending on the number of customer applications)
insurances
banks
cham
bers
of
com
mer
ce
freight forw
ards
carriers
surveyors
logistics
procurement production
salesfinance/treasury
entity 1... n subsidiaries
All process participants interact on one web-based true multi-bankand multi-entity process platform:
@Global Trade
“Corporate centric multi-bank system“Improves visibility, monitoring and control for Treasury
Case Study: Standby LC/Guaranee Issuance Solution
Case Study: Standby LC/Guarantee Issuance Challenges
Initial Situation
Management of L/G is decentralized and handled independently by each subsidiary
L/G exposure with 47 banks (applied by 52 subsidiaries)
Reconciliation of L/G data and settlement of fees is time consuming and prone to errors
Central treasury has to monitor the terms and the availability of L/G facilities and the allocation of business to the banks
Key Objectives
Harmonisation of documentation and saving of L/G commissions
Improvement of transparency and avoidance of discrepancies between banks' and EADS' records
Preserve flexibility for subsidiaries but enforce standard policies
Improve efficiency
Achieve a better diversification of business allocation between the banks
High and quick acceptance of the new solution by subsidiaries and banks
Case Study: Standby LC/Guarantee Issuance Solution
EADS N.V.
38 Subsidiaries
25 Banks
L/G Agent
25 identical Bilateral Facility Agreements
Co-ordination Agreement
Sub-Limits / Guarantees
EADS successfully arranged a new L/G Umbrella (existing exposure was rolled in) with 25 identical bilateral L/G facilities that were allocated in a quantity tender.
EADS appointed HVB as a service provider to 25 banks and 38 EADS subsidiaries.
Case Study: Standby LC/Guarantee Issuance - Technology
Bank Agent
LG Issuance
WWW
Multi-bank
WWW
38 divisions
25 banks
Agent System
Solution:
Web-based for 24x7 availability and easy rollout to 38 EADS divisions and 25 banks
Configurable workflow engine manages all authorizations incl. syndications and club deals
Automatic e-mail alerts and tracers ensure compliance with response-time guarantee
Integrated credit line management module automates monitoring credit utilizations
Flexible transaction data model simplified conversion of the existing guarantee portfolio
Billing module automates calculation and allocation of fees including previous period adjustments and multi-bank reconciliation
6 months from concept to production
Substantial reduction of operational costs
Case Study: Export Documentary Credit and Collection Solution
Automotive Manufacturer
Case Study: Export Documentary Credit & Collection Challenges
Improve cooperation between factories, that prepare documents, and L/C department, that receives and allocates L/C advices
Improve visibility of each step in the transaction process
Reduce number of discrepancies in the presentation
Improve efficiency by automating transfer of L/C information into invoicing system and relevant product information into the @GlobalTrade system for preparation of documents
Allow L/C department to electronically pre-check L/Cs with banks
Enhance straight through processing through enablement of foreign banks to send export L/C messages electronically
Case Study: Export Documentary Credit & Collection Solution
L/CDepartment
e-Advices
Presentations
Payments
Instructionsand
Documents
Domestic and Foreign Banks
Logistics ProvidersElectronic Delivery of export L/C messages
Financial release and cooperation between the L/C Department and Factories
L/C department can assist factories regarding issuing compliant documents
Logistic providers can be connected to the platform and exchange electronic documents with the L/C Department, Factories and others
Global visibility and real time reporting
Case Study: Export Documentary Credit & Collection - Technology
WWW
Collection Module
L/C Department
Factories
Export System
ERP Interface
SAP AR Interface
ElectronicBanking
PresentationInformation
L/C Info
Vehicles &Parts Data
GlobalOrdering
SAP FinancialsExport L/C
Module
Shipping
Forwarding
& InsuranceCompanies
Web-based L/C and Collection management system for easy world-wide roll-out to factories, 3 rd party document providers and banks
Improved efficiency and reduced discrepancies by automating transfer of:
L/C information into corporate’s ERP system(s)
Relevant product information from the invoicing system into document preparation instructions
L/C and collection presentation information into accounts receivable system for reconciliation of incoming payments
About GTCGTC’s @GlobalTrade technology helps buyers, sellers, traders, and financial institutions communicate faster and more efficiently to free up working capital, realize cost savings, reduce risks and improve monitoring and control
Our customers are
corporations that need consolidated access to multiple banks and logistic providers
banks that require supply chain finance solutions to meet their clients’ needs
Our Expertise is in multi-bank financial supply chain systems where the corporate drives the business process
Best Independent Trade Platform/System Provider for 2005, 2006 and 2007 by Euromoney’s Trade Finance Magazine
2006 Canada’s 10th Fastest Growing Company by Profit Magazine
2005 20062007
@GlobalTrade Platform
CollaborationProgress
Monitoring
ERPInterfaces
Credit Limit Monitoring
Multi-Office Management
Workflow
DocumentGeneration
Billing User-Defined
ReportingArchiving
Back-officeandERP
Systems
Data & Access Security
Data Mapping
Multi-Bank and Logistics Connectivity
BankInternetInternet
Open Account Financing
Standby LC/Guarantee Receipt
Export LC / Collection
Custom Built Systems
Standby LC/GuaranteeIssuance
Import LC / Collection
Global Trade Management Systems
InternetInternet TSP
Business & Network Modules
web-based for global connectivity and quick deploymentinterfaces to internal and external systemsmodular architecture for Global Trade Management product systems can be installed internally, at a managed hosting provider or offered as an ASP system
