the internet keeps on revolutionizing trade finance

8/4/2019 The Internet Keeps on Revolutionizing Trade Finance

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The Internet Keeps on Revolutionizing Trade Finance

Trade finance has moved onto the Internet so rapidly, it can be a challenge to keep up with thearray of new services that come on stream.

Clearly, commercial banks, the main players, were the first to convert their Letters of Credit,

payments, and collections services to electronic formats. The result has been huge gains in speed,

efficiency, and accuracy, and the creation of valuable on-line networks among traders, banks,

and logistics suppliers.

But nowadays, export credit insurance, working capital, invoicing and collections, payments and

foreign exchange can be obtained through the web without a bank. And there's more: niche

products appear regularly, many of them information services that help traders locate the

financing resources they need.

Among the banks, large global institutions, such as Citibank, ABN Amro Bank, and JP Morgan

Chase, have invested heavily in sophisticated software, systems, and Internet trade portals. ABN

Amro's MaxTrade portal, for example, lets customers initiate Letters of Credit and collections,

prepare digital trade documents, and manage purchase orders, while creating customizedreporting tools.

The big banks are expanding their global share of trade services through outsourcing Internet

operations to other institutions that piggyback on their investments, thus spreading the benefits.

ABN Amro Bank now works with twenty-six other banks in the U.S., Europe and Asia, and just

launched a partnership with Allied Irish Bank.

Meanwhile, supporting the banks are two independent trade portals-TradeCard and Bolero.net-that offer messaging services connecting exporters and importers, and banks.

TradeCard, headquartered in New York, but a big Hong Kong presence, provides a platform for

exporters and importers to negotiate a sale, and produce a commercial invoice. And, with the

comfort the electronic contract produces, member banks can finance the transaction with


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It was an attractive opening to insurers, since the traders signed up as members of the portals,

and submitted financial data that made transactions easy to underwrite. Insurance could be

applied automatically (within limits). But, many trading portals crashed in the dotcom

extravaganza.

American International Group, however, has taken a longer view, creating the AIG eBusiness

Risk Solutions Group with a broad product menu for e-commerce. It has stayed in the online

credit insurance business, helps smaller firms monitor payments and collections, establish credit

limits, and apply insurance cover to trade receivables.

And, managing the use of export credit insurance is getting easier. Lex-Tek International, in

Atlanta, provides online services and software that reminds policyholders about deadlines in

policy reporting and other requirements.

Then, too, there's the need to find working capital, often critical for smaller and mid-sized

exporters who require funds to fabricate the products for which they land overseas orders. Not to

worry, InterNetLC.com, in San Diego, helps beneficiaries of Letter of Credit borrow working

capital on a transaction basis. The funds are provided in cash or as a back-to-back L/C.

InterNetLC.com, which helps exporters manage the letter of credit transaction and brings in the

funding, says it just supported Tri-Products Inc. in Los Angeles in exporting scrap metal to

China, working with five suppliers, and offering 90-day terms.

Meanwhile, smaller exporters and importers can now find independent online payments services

that compete with banks. For example, Ruesch International, headquartered in Washington, D.C.

(with an overseas presence in London, Zurich, and Prague), lets clients manage their accounts

online, and link directly to their accounting systems.

Much of Ruesch's business is transaction based, but the firm says it has ongoing relationships

with many corporate clients, which it claims number 30,000. Some clients consider it a

complement to their bank relationships.


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And, if an exporter or importer wants banks to compete for its Letter of Credit business, it can

turn to LCConnect in New York, which uses its Internet program to let institutions know what its

clients require, then invites them to bid for the transaction. The exporter fills out a form on the

web site, and requests a quote. Most clients are Fortune 1000 companies.

But, it has not all been smooth sailing for the Internet suppliers. Casualties can be found, and not

just in online marketplaces. Internet Trade Finance Exchange in New York, for example, closed

its doors after only a year of serving as a trade receivables administrator.

www.worldtradewt100.com/articles)

A wealth of online international trade finance services

A wealth of online international trade finance services Internet-based financial

services have come to play an increasing role for importers and exporters.

15.08.10

Kevin Godier

Internet offerings have in recent years been a key focus area for all of the world's major trade

services banks, which have re-directed a significant proportion of their clients' international trade

finance workflow away from paper to faster, cheaper and more efficient electronic channels.

In the UK, major banks such as Barclays Bank, HSBC, Lloyds TSB and Royal Bank of Scotland

(RBS) have made available a range of highly secure, electronic, Internet-based trade finance

technology that integrates finance with other services. For their part, small and larger corporates

have come to accept Internet-based services in cash and trade, for both imports and exports, as a

given, while still retaining their vital face-to-face relationships with bankers.

At the very least, leading UK banks now offer Internet-based facilities allowing customers to

issue and amend import letters of credit (l/cs) electronically, thereby helping to eliminate the

discrepancies that invalidate so many l/cs. They can then follow the progress of the l/cs online as

the documents are received and released by the importer's bank. They can also receive reports

about payments completed, and balances still available. Where export l/cs are concerned, these
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can often be transmitted immediately on the customer's PC-screen, and, again, progress and

payments status can be viewed.

Collection options

Online documentary collection facilities are also available from banks, including HSBC, which

offers web-based supply chain financing and online trade services through its flagship HSBCnet

platform. Among the suite of flexible online financial solutions on this platform, clients can keep

track of payments, receivables, cash flow, supply chain needs and the changing value of their

assets via a consolidated interface.

Another major player, RBS, operates an online trading services management tool known as

TradeFlow, which allows both buying and selling customers to securely manage trade documents

online throughout the trade transaction cycle. RBS also offers MaxTrad Express, an online

solution designed specifically to meet the needs of small and medium-sized companies

conducting low volumes of trade transactions. This forms a component of RBS' MaxTrad global

trade platform, "which removes paper from the system to get trade efficiencies, and is available

to exporters and importers in the UK", said Adnan Ghani, head of trade finance within RBS'

Global Transaction Services team.

At Lloyds TSB, customers with a turnover of 15 million annually now have access to the multi-

bank platform provided by Bolero, a service which enables the automation of the end-to-end

lifecycle of l/c and guarantee instruments for both importers and exporters over a secure, neutral

and standardised channel. A joint statement said that "a significant number of corporates,

commodity traders and banks are utilising the multi-bank Bolero service", which Bolero has

been touring as the increasingly standardised channel for multi-bank trade finance.

For exporters using Bolero, l/c advices received from banks are visible on the platform's

dashboard feature via an Internet browser, and l/c amendments are tracked to the original l/c.

Importers applying for l/cs and guarantees can create these instruments via standard templates

and select the bank to send this to, again via standard Bolero messaging and transmission.

At the smaller end of the market, the East Sussex-based independent factor, Partnership Finance,

offers its clients Surecomp's allFAC online receivables management solution, which is

designed to handle a wide range of full and reverse factoring, invoice discounting and invoice


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level funding. With no hardware to install, the ASP (hosted) version of allFAC requires nothing

more than a web browser and broadband Internet connection at the user site.

Supply chain financing

To accompany the move by many companies towards open account trading, and the alignment

by many corporates of their physical and financial supply chains, banks are now offering

products that offer a more complete service in supporting their business on an end-to-end basis,

rather than just the individual transactions within it.

According to one leading supply chain financing specialist, "banking is still at an early stage" in

this process. "At the moment, most of the supply chain solutions in the market are fairly tailored.

Where the industry wants to get is an evolution into more commercialized, generic supply chain

solutions, that are more readily available for more markets, rather than a generic product like an

l/c or cash management solution," he said.

One of the most keenly-eyed technological developments for supply chain finance is the

SWIFTNet Trade Services Utility (TSU), a workflow and data matching engine which went live

in April 2007 and is expected to allow banks a far greater scope for intermediation in open

account transactions, without making a significant technology investment. Well over 100 banks

have now signed to the service, which involves SWIFT providing new formatting standards and

infrastructure that allows banks to pull out key data on purchase orders, invoices and transport

documents, which can then be used to provide inventory, receivable or payable financing.

Ultimately, as the financial and physical supply chains become integrated, corporates will have

access to greater visibility on both the movement of their goods, and the cost of their finance,

and tailored financial solutions will become easier and cheaper.

Corporate users

Just like the banks themselves, corporate customers are looking for value-added functionalitysuch as workflow and imaging capabilities, plus the automated centralisation that allows them to

run their trade finance activity 24/7, from locations around the world. This mindset has enabled

the cycle of finance, logistics, warehousing and payment to advance to the extent that retailing

and payment across the Internet is now standard and has in turn triggered the growth of

several supply chain collaboration and financing platforms.


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One of the best known is the US-headquartered TradeCard, which has added more than 600 new

organisations to its online platform in 2010, and now brings together almost 6,000 buyers,

suppliers and service providers. Through TradeCard, suppliers are provided with access to online

payment protection, early payment programmes and trade financing, which allow brands and

retailers to maintain or extend existing terms with suppliers and eliminate the need for credit

lines for purchases.

In the UK, the Institute of Export and International Trade and partners have created a new

website to help SMEs, known as Export Box. The site involves localising company web sites,

and includes features such as Royal Mail's special discounted shipping rates and advice about

shipping overseas, and preferential rates on bank transfers and currency conversions from HSBC

Bank.

Technology vendors are also understandably hard at work in this space, catering for the demand

from corporate banking users. A good example is trade services software solutions provider

Misys. The ASP-delivered version of its Misys Trade Portal software product contains a multi-

bank platform where customers can access multiple banks and view their consolidated

transactions via a single front-end solution.

Payment speed

For smaller companies, one of the key benefits of online technology is vastly improved payments

processing. Whereas an estimated five days or so is required to process a paper-based payment,

companies can now push through an invoice electronically on a daily basis to their invoice

finance company, and can expect to receive some cash the next day.

And where invoices need collecting, an example of the products coming to the fore is

Collectbox, a new service enabling companies to collect unpaid bills that was launched in 2009

by FDI Logbox, a specialist in credit management solutions for the fashion industry that

manages debtors across Europe, through its network of subsidiaries. Accessed via FDI Logbox's

main online platform Logbox Online new Collectbox service provides support for

additional portfolios in outsourcing assignments, particularly the local outsourcing of the export

ledger.


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Electronic cash management is another growing product line. One of the leading products here is

RBS' Global Liquidity (GL), an Internet-based, fully automated cash concentration service. LRC

Collections, which exports Land Rover and Jaguar merchandise ranges to over 50 countries,

chose GL when it required a quick and cost-effective way to collect income locally, and to then

pull these funds back to the UK in a more streamlined manner.

Foreign exchange (FX) facilities for UK importers and exporters have also improved. In late

2008, Currencies Direct launched a cost-cutting FX product for British firms doing business

abroad, known as I-PAYFX, which enables customers to move money around the world at any

time of day, and "simplifies the transfer procedure to a few quick clicks of a mouse while saving

firms up to 3% of their money per transaction", said Currencies Direct. It stressed that by

combining the foreign exchange and payment elements of a transaction into one simple online

process, I-PAYFX can save its clients between two to 3% per transaction through more

competitive exchange rates and low oron deals over 5,000non-existent transaction fees.

To address fears over non-payment, Aon Trade Credit provides its online diagnostic tool Aon

Trade Manager, which identifies customers struggling to make payments and will also help set

credit limits using companies' own customer trading experience, blended with up to date

financial intelligence from ratings agencies. Aon Trade Manager takes an automated daily feed

of all invoices, payments, credit notes and customer details directly from your accounting

system, and then provides you with a range of diagnostic tools giving you daily updated

intelligence on your customers and how the associated credit risk is changing.

(http://www.croner.co.uk)

Explore options for automating
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letter of credit applications

With efficiency at a premium today in trade finance management, companies are

wise to explore the growing number of channels and options available for

automating the letter of credit (L/C) application process.

A leading apparel retailer is experiencing the

benefits of this strategy. For about five years, the

company has used MaxTrad, RBS' global trade

platform, to initiate import L/C applications for

key suppliers in China, Hong Kong and Vietnam.

During the peak buying season, from April until

early November, the retailer issues 25 to 30 L/Cs a month, each funding, on

average, the purchase of $12 million to $15 million in designer wares.

Anticipating another phase of growth and an influx of purchase orders, the

company recently was looking to further streamline L/C application processing.

In the past, purchase order data such as the description of goods, quantity,

purchase amount and vendor name and location were extracted from the

company's back office system and manually mapped into various MaxTrad

templates. The expiry date and latest shipment date were then calculated

manually for each import L/C. Processing took as long as an hour because one

import L/C covered as many as 20 purchase orders.

RBS helped the company transform its semi-automated process into a fully

automated one. By adding some business logic, RBS enabled MaxTrad's

purchase order module to upload a file from the company's enterprise resource

planning (ERP) system and automatically populate templates with purchase

order data.

Processing now takes only 20 minutes per application. "The company had one

person managing all of these purchase orders, and he was overwhelmed," says


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Deborah Seliski, Director and Global Head Traditional Trade Channels and

Open Account Services, at RBS. "Now he's able to process the applications in

one-third the time."

Electronic channel benefits

Letters of credit have seen a resurgence in popularity following the recent credit

crunch. L/Cs are used to leverage the buyer's relationship with its bank to secure

pre-shipment financing for suppliers, and as a risk mitigation tool. "Even

companies that only need to initiate one or two L/C transactions a month can

benefit by doing so through an electronic channel," Seliski says.

It's not so much that faxing L/C applications is onerous, but rather that

automating applications through an electronic channel improves communication

with the bank and adds transparency to the process, she says.

Clients with 10 or fewer transactions a month typically use RBS' MaxTrad

Express platform to initiate L/C applications. MaxTrad Express notifies clients

as soon as the bank receives their application and when the application is

approved. Once it's issued, the client can download and view the L/C. "Theelectronic channel eliminates many phone calls to the bank," Seliski says. "It also

alerts clients whenever they need to take action for instance, sending them an

electronic message when an L/C is about to expire."

Using an electronic channel can also reduce L/C-related bank costs related to

rekeying data, she says.

Middle-market and large corporations with more extensive L/C needs typically

use another RBS trade platform, MaxTrad Enterprise, to automate the application

process. MaxTrad Enterprise provides more functionality and accommodates

more complex corporate hierarchies and multiple approval layers.

Host-to-host, emerging messaging options


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RBS clients with larger L/C volumes have a number of options for sharing data

with banks regarding letters of credit. These include automated host-to-host

solutions that don't necessarily involve one of the MaxTrad platforms.

Clients looking to share with the bank data extracted from their ERP system

must first agree with the bank on a standard data file format. The data

transmission is executed via the Internet to a secure mailbox at the bank, or if the

client uses MaxTrad, there's a mechanism that enables the client to upload the

file, if they choose.

"Once that data reaches the electronic RBS mailbox, the data is extracted and

mapped to our back end," Seliski explains. "Some clients have the L/Cs releasedonce they hit our back end, while some choose an extra level of approval and use

the release hierarchy they have built into MaxTrad."

For clients doing L/C business with multiple banks and looking for a bank-

neutral solution, RBS also can support the mapping of data from third-party

systems such as Bolero.

RBS is also evaluating an emerging bank-neutral communication alternative forL/C applications, SWIFT for Corporates. Using SWIFT's MT 798 Trade

Envelope, SWIFT-member corporations eventually will be able to send their

banks a wide range of trade financial messages.

"One of the advantages of the SWIFT for Corporates solution is that it enables

the bank and its clients to leverage their investment in SWIFT and use message

standardization," Seliski says.

To learn more about your options for automating the letter of credit application

process, contact your RBS Global Trade Finance advisor.

(http://www.fpsc.com/RBS/GlobalTradeAdvisor/Summer2011/story2.htm)
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Asia trade: Enjoy the rewards, but remember the risks19 October 2010

Asian trade has grown strongly since the credit crisis, but dangers remain. Pravin Advani, ManagingDirector, Global Trade Executive for Asia at J.P. Morgan, looks at the risks ahead and what corporates cando to make sure they are protected.

Read more:JP Morgan AsiaAsia tradeAsia supply chainSupply Chain JP Morgan

With trade flows rebounding strongly and GDP forecasts being revised upwards, the picture for Asian economies hasbeen steadily improving throughout 2010. But, as many look forward to a brighter future in Asia, it is important not toforget the lessons of the past.

As the credit crisis took hold, many Asian traders who had enjoyed a decade of strong growthbelieved it wouldnot affect them. Decoupling, they thought, meant that the buoyant economies of China and India could carry onregardless, with intra-Asian trade flows making up for any loss in external demand. Of course, it did not work out likethat. Customers ran down their inventories instead of placing new orders, while the banking crisis made credit scarceand expensive.

As a result, many suppliers went out of business. It is estimated that between 20,000 and 30,000 SMEs went bust inChina during the peak of the global slowdown. That pattern, if not the magnitude, was repeated right across Asia. Thesurvivors found themselves operating in a far more risk-averse environment. Buyers, seeing the pressure supplierswere under, had less faith in them to deliver. Suppliers, operating under tight credit restrictions, found it difficult tofund the production and delivery of goods.

This may already seem like ancient history, but it illustrates how much in a truly global economic world we are allaffected by risks within it, even if they are far from home. So what are the risks still out there?

Weakness in the West

Between April 2009 and July 2010 the International Monetary Fund upgraded its forecast for growth in the worldeconomy from 1.9% to 4.6%. This steadily improving picture is highly reassuring. However, growth remains weak innearly all Western economies and there are fears of a double-dip recession. Many Western governments haveborrowed heavily to support their economies and, as growth improves, they are now raising taxes and cuttingspending to pay back debt which will affect the ability of consumers to buy goods. High levels of national debt

(many European countries have borrowings equivalent to two-thirds or more of national GDP) are another concern.As some rating agencies threaten downgrades, the possibility of a sovereign debt crisis has been raised. This isundermining confidence in currencies, particularly in Europe where the euro is seen as under threat.

There are, of course, grounds for thinking that if another crisis occurred, the impact would be less severe. Thesystems are already in place for national and multi-national intervention, many negative risks have been flushed outof the system and liquidity is strong.

We should recognise that another banking crisis is highly unlikely, and that a return to recession in the West is seenas a possibility rather than a likely outcome. However, even if the risks are smaller, there are issues that need to beaddressed if global supply chains are going to operate smoothly.

Supply chain solutions

So, what can traders do to ensure that they can keep trading successfully even if the economic climate changes forthe worse? Following the credit crisis, many suppliers that were operating on open account switched to using lettersof credit (LCs). As some of the most secure instruments available to international traders, they provided greatercertainty of payment and improved cash flow. However, even with the assistance of banking partners to s implify andautomate processes, they remain relatively costly and labour intensive. As conditions improve, we have seen a driftback to open account trading. Instead, the emphasis of many companies in this stage of the cycle is on improvingefficiency and optimising resources within the supply chain.

This is one of the reasons J.P. Morgan has been investing heavily to provide local services while drawing on itsworldwide strength and expertise. By connecting well-proven treasury and trade finance processes with global risk
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management and financing capabilities, J.P. Morgan is helping corporates reengineer their supply chains to drive outinefficiencies and balance risk. While credit margins have come down since they spiked during the credit crisis,corporates have learnt that the days of cheap money are over.

Instead, operations need to be structured to both reduce the need for financing and ensure it can be accessed at thelowest cost. In addition, cash within the supply chain and corporate accounts can be managed so that liquidity ismaximised.

Working capital

This trend towards better use of working capital through supply chain optimisation looks set to accelerate ascorporates build protection against the external risks discussed so far in this article. For example, with economicrecovery still patchy in the West, demand may become more difficult to predict. In this context the ability to reactquickly to changing demand is vital.

Building and managing a supply chain that has the capacity to increase or reduce quantities without time lags or non-essential costs will be valuable. Within these supply chains, as sellers come under pressure they will look to collectreceivables more quickly while buyers will want to extend payment terms. The only way for both parties to achievetheir objectives is through a liquidity buffer such as supply chain financing.

For example, a major US-based clothing brand, which sources many of its fabrics from Asia, had invested a

significant amount of time and money building up a supply network based on offshoring and low cost sourcing. Manyof these suppliers were struggling as local finance dried up and demand dropped. Not wishing to risk losing itssuppliers nor wanting to pay a premium to keep them afloat the retailer enlisted the help of J.P. Morgan. Byleveraging the retailers strength as a buyer, we were able to help improve their key suppliers credit terms and cashflow.

The strength of economic growth will also affect the price of commodities, creating challenges both for those who sellraw materials and those who require them to make finished goods. Here, risk can be mitigated by hedging strategiesthat enable buyers and sellers within the supply chain to trade at a pre-agreed price. Similar strategies can also beused to mitigate currency risk, a particularly important issue as the eurozone struggles to accommodate weakernations and the US economy impacts on the dollars safe haven status. Closer to home, the value of the renminbimay, of course, also rise as Chinas economic strength continues to build.

Weak links, strong chains

If economic conditions deteriorate again, suppliers could once more become vulnerable and companies will need torevaluate their supply chains to identify and support key partners and reduce the number of potential weak linksuppliers. However, this must be balanced against the need to ensure continuity of supply.

Corporates will want to ensure that vital components can be sourced from multiple suppliers to keep their productionlines going. Here the ability of the weakest link in the supply chain to access the financial strength of the buyer can bevital in keeping the supply chain moving.

While the processes described above can offer major benefits for corporates, they are also a good fit for the banks.Although appetite for more exotic forms of lending remains constrained, the relatively quick and closed lending cycleof supply chain finance is popular with banks. Even in those cases where banks do not have appetite for a particularcorporate, they can work with state and multilateral credit insurance agencies to share risk.

Another positive for banks is the opportunity it gives them to add value through a range of services across

transaction, trade finance, treasury and risk management. This enables banks to work more closely with their clientsto deliver a complete, tailor-made solution.

Its clear that the range of challenges outlined in this article, and the number of services required to meet them, meanthat demand for trade solutions will rise. And indeed, when countries finally fully recover from recession then r isingtrade flows will also increase take-up. To meet this demand, many banks are building capacity in the region.

Faced with a greater choice of providers and increasingly complex and global supply chains, companies will look for abanking partner with the scale and resource to deliver a full range of products and services across currencies,countries and continents yet with the people on the ground to understand the needs of each individual client. This is


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one of the reasons behind J.P. Morgans long-term investment in building its capabilities in Asia Pacific. In addition toJ.P. Morgans existing Treasury and Securities Services, the Global Corporate Bank will offer greatersupport tocorporates and help to link Asian trade flows more effectively with those of the EU and US.

The road ahead

We cannot, of course, know what risks lie ahead. But we can learn from the past, anticipate the future and build

strategies to match. The need to move swiftly as demand falls or rises, to negotiate changing currency andcommodity prices and to ensure that working capital is used efficiently are all key to negotiating whatever risks are tocome. Those that are well prepared will prosper; those that are not risk falling behind. The good news, however, isthat the actions corporates take today to protect themselves against risk will drive business efficiency and positionthem well for the future, whatever it holds. Global banks can help them achieve these efficiencies and play a key rolein creating lean, just-in-time supply chains with excellent transaction processes and working capital management.With those processes in place, Asian corporates bright future looks set to continue.

Embracing open account

The letter of credit is dying, much to some bankschagrin. What is taking its place though openaccount terms supported by next-generation technology offers intriguing possibilities to bothcorporates and banks. Erika Morphy reports.

A few years ago Bank of America trade finance executives began to notice that a few seemingly

disparate trends were emerging that had in common some long-term ramifications both for the

bank and its customers.

For starters, large companies were moving to open account terms in ever growing numbers. This was

not a particularly new trend, but it was becoming obvious it was causing a cash flow impact on the

suppliers balance sheet. Small-to-medium-sized businesses (SMBs) in Asia, in particular, were

hurting as they were used to leveraging a letter of credit (LC) to bridge the gap between the time

they shipped and the time they were paid. Basically, banks tend to lend a higher percentage of funds

against an LC transaction as much as 70% as opposed to an open account transaction, when

drawdown rates drop to below 50%. And as much as Bank of America wanted to lend money to the

SMB vendors in Asia, due diligence in many cases was something of a problem. For the most part

these are privately held companies, often with two or three sets of books.

After much market and legal research, as well as a rigorous vetting process for the potential tech

partners, this February Bank of America rolled out a trade payables discounting programme that

enables customers to offer open account terms to their suppliers at rates tied to their risk profile.

In the simplest terms, the programme uses the more powerful credit standing of the corporate in

such a way that helps all three parties: the buyer can free up cash because it can extend its terms

beyond what the supplier used to offer. Meanwhile, the suppliers cost of financing has gone down

significantly, which is also reflected in the prices it charges the buyer. And Bank of America? It ismaking money in an area that appeared to be all but on its last legs.

We like this programme, first of all, because it facilitates our customers move to open account,

says Dan Scanlan, senior vice president, global product managertrade, Bank of America. Also, This

buyer-supported programme allows us to do that without all the work and risk that is normally

associated with lending to small companies.


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New resources; old forms

Bank of America is one of many global banks that are now plowing new resources into what is

probably one of the most basic forms of trade finance open account financing. The reasons behind

this move vary; the most obvious is that companies are finally revolting against the time consuming,

expensive and discrepancy-laden letter of credit process and banks are reacting to their demands foropen account support. The letter of credit is dying, says Kurt Cavano, CEO of TradeCard. It is about

time.

Another driver behind the growth of these next-generation open account platforms, not so

incidentally, are third party providers such as TradeCard, which are offering their own value-add

products in this space. In order to remain competitive some banks have had to scramble to catch up,

in some cases by partnering with these providers.

I would definitely say this trend has been driven by global companies more so than by banks, says

Emmanuel Cuvillier, the Paris-based vice president and general manager of PrimeRevenue Europe,

whose parent company partnered with Bank of America to offer the trade payables discountingprogramme. Now, it is an area that is really starting to heat up among banks.

To be sure, banks activities are still a work in progress. Bank of New York, for instance, is currently

experimenting with the technology it wishes to adopt permanently, weighing whether to build

functionality in-house or outsource it to a third party provider. Bank of New York, says Howard

Bascom, managing director of its global trade financial services division, started working with SWIFT's

trade services utility (TSU) pilot programme in the first quarter of this year. We are cautiously

optimistic that it will provide the basis for a full range of services that our clients are looking for. We

are also exploring other open account solutions.

Existing platforms

Other banks are incorporating open account support and related supply chain financing into trade

finance platforms that have been in place for a few years. Bank of Americas trade payables

discounting programme was not its first open account offering; it had previously introduced a few

years ago purchase order-to-pay service, a payables reconciliation solution for open account and

letter of credit transactions.

Other examples include ABN Amros software platform, MaxTrad, which is moving steadily to a

system in which it can offer end-to-end financing between a buyer and its supplier. JPMorgan

Chases capabilities in this area advanced considerably last year when it acquired Vastera, a well-

recognised provider of global trade-management services and technology. Although it can and has

supported large export credit agency-backed transactions, the bank sees its future growth among

SMB companies. To service this constituency, over the past year it has focused on offering support

for open account trade flows.

The Royal Bank of Scotland, to cite another example, has introduced a number of short term trade

finance products over the past year, including trade cycle finance, an initiative in which the import

finance and accounts receivable/factoring services have been joined into a single package, and


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TradeFlow, a website in which the bank offers several different value-added automated trade

finance processes and services. The next step, it says, is open account solutions and additional supply

chain finance tools.

Citigroup as well has been focusing more on open account services, according to Claudia Slacik,

global head of trade services and finance, Citigroup corporate and investment banking. We *havebeen+ combining existing products together in new ways, she says.

Changing requirements

Many, if not most, of these institutions have offered some form of open account automation for

years. Bank of New York, for instance, has been providing open account processing for at least a

decade, Bascom says.

Some of the large importers we had worked with for years thought they could move to open

account and everything would be okay. But then they realised that somebody still had to be there in

the country to check documents and so on. We saw this as an opportunity. Since then, he says, Bank

of New York has been active in delivering financing and supply chain solutions to its corporate and

financial institution clients.

Now, he says the market demands for open account support is changing and Bank of New York is

revamping its platform to keep up. We are looking to see what we need to do to meet these

challenges. There are multiple solutions and projects out there but to date no one standard has been

accepted.

Bascom says the TSU provides a foundation for bank and corporates to work more efficiently in the

open account space. The communication module, for instance, enables the bank to see the actual

purchase order. That means the bank can look at financing from a different perspective. It helps us

work with our clients in terms of feeding information back to them. Also, he adds, the increased

information on trade flows gives the bank an opportunity to identify new finance opportunities.

Buyers credit

Indeed, from the corporates perspective, the latest in open account technology must also provide

some additional value add, beyond merely supporting its suppliers documentation.

Using the TSU system, for instance, a bank could conceivably be able to provide additional financing

because of the visibility provided by the system across the trade flows. It could also make faster

credit decisions.

Bank of Americas trade-payables discounting programme, as another example, enables companiesto offer their vendors financing tied to their own credit, which is likely to be stronger than what the

vendor could get factoring its receivables. It is a significant arbitrage opportunity for both buyer and

supplier in that the buyer can extend the payment for as long as it wants, say 60 days, at financing

that could be Libor plus 50 basis points, as an example.

The processes supporting this and similar transactions by other institutions using PrimeRevenues

technology can be deceptively simple, explains PrimeRevenues Cuvillier. To start, the buyer provides


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a file extract from its accounts payable system with the necessary information on approved supplier

invoices, including payment data and payment amount. This file is then uploaded to the

PrimeRevenue platform, which the supplier is able to access.

The supplier then views its receivables scheduled for future payment and the amount due for eachpayment. Suppliers have the option to trade 100% of the value of their receivables for early cash at any

point in time prior to the promised payment disbursement. The financing cost involved with this earlypayment based largely on the buyers credit rating is calculated on a daily basis by the PrimeRevenueplatform.

Just before the receiveables maturity date, the buyer remits payment to its central clearing account, fromwhich PrimeRevenue distributes payment to either the supplier or a third-party funder.

New world

TradeCards Cavano sees this latest generation of service and technology offerings as just that the

latest, but certainly not the last. I think electronic delivery of corporate banking services will rapidly

follow, he predicts. We saw the internet revolution on the consumer side drive new services like

online mortgage and credit card applications with instant credit approval. Brokerages have

automated their services as well.

The next series of innovations, he says, will be aimed at the corporate. And when that happens, the

financial landscape will change significantly. Once banks and companies are completely automated

and hooked into each others systems in real time, a more efficient capital market will be created

and as a result, cheaper capital will be available to everyone.

These events will then usher in a cycle that will become self-perpetuating, in Cavanos somewhat

apocalyptic version of events. After banks and corporates have created this more efficient capital

market, prices will be driven down and banks spreads reduced. Only the banks with the best

technology will be able to compete and they will continue to invest in their platforms in order to

remain competitive.

What is global trade management?

Applications offered by TradeCard, PrimeRevenue and other providers such as TradeBeam, Bolero

and Vastera (now acquired by JPMorgan Chase) fall under the software category called global trade

management (GTM). If youve never heard of GTM, that is because it has only recently been coined,

saysC. Dwight Klappich , a software analyst at Gartner Group, a global consultancy.

This is a unique market in that it is very mature in one sense and very immature in the

other.Pieces of global trade management, such as the automated letter of credit or an export

customs clearance engine, have been in existence for several years, he explains. But very few of

these vendors have tried to incorporate the three essential functional pillars trade finance, logistics

and compliancein one platform to form a true GTM solution. There is no single vendor that does

it all, he says, although some come close. TradeBeam is one example, so is Vastera.

There are signs that the market is slowly moving in this direction, Klappich says. There has been a

tremendous consolidation of point solutions among the vendors.

Also, he notes, there is a shift in thinking underway with corporates now more inclined to view trade

management as a strategic function, as opposed to an administrative function. Then more


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companies will see the value in integrating trade finance with compliance or adding intelligence to

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RBS updates Maxtrad systemLast Updated March 30, 2011

RBS has released an upgraded version of its electronic trade and supply chain finance solution

Maxtrad.

The improved incarnation of the system provides RBS customers with a single platform formanaging and settling trade transaction for buyers and sellers, further automation of processes

and increased flexibility allowing for tailor-made solutions.

As a result of challenging economic conditions, global trade activity is coming under greater

scrutiny, says Madhav Goparaju, global head of trade product delivery and sourcing solutions in

RBSs global transaction services business.

With this release, RBS further reinforces its commitment to helping customers achieve cash flow

and liquidity benefits through supplier financing programmes in multiple countries and

companies.

Maxtrade aims to integrate all participants in the supply chain.

RBS gained the award-winning Maxtrad platform through its acquisition of ABN Amro.

JP Morgan signs SCF facilityLast Updated March 30, 2011

JP Morgan has signed a US$450mn supply chain finance facility to benefit the small and medium-

sized suppliers of industrial machinery manufacturer Caterpillar.

The bank will use the funds to purchase accounts receivable owned by suppliers and due from

Caterpillar which are related to the purchase of goods by Caterpillar for its export-related

operations.
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The facility will increase liquidity and working capital in Caterpillars supply chain, and exporters

have the option to extend payment terms without causing financial disruption amongst their

suppliers.

The deal has been guaranteed by the Export-Import Bank of the US (US Ex-Im) under the banks

supply chain finance guarantee.

We are proud to have the opportunity to build upon our existing supply chain finance

programme with Caterpillar by working with US Ex-Im to provide additional financial capacity to

Caterpillars qualified US suppliers, says Dani Cotti, global trade executive at JP Morgan.

Caterpillars suppliers are currently seeing cash flow improvements and working capital benefits

as a result of discounting their accounts receivables in exchange for faster payment,Cotti adds.

Bolero expands business modelLast Updated March 30, 2011

Tech firm Bolero is expanding its business model by agreeing to use messaging firm Swifts

systems to boost the availability of its systems.

Boleros multi-bank system will now be capable of sending messages over Swifts Fileact service,

meaning that institutions which do not have the Bolero system installed will be able to access

Bolero products through Swift.

A number of other software vendors also use Swifts Fileact service for similar reasons, includingthose operating outside of trade finance such as treasury.

Arthur Vonchek, chief executive officer of Bolero, revealed to GTRthat the company is

anticipating the new solution to go live well within 2011, and possibly as soon as Q3.

This is a logical consequence of the growing requirement for multi-bank trade finance solutions

and the need to provide co-existence and choice for both banks and corporate customers, says

Arthur Vonchek, chief executive office at Bolero.

This inter-operability between Bolero and Swift will allow banks and corporates to extend their

multi-bank trade finance reach without the need to pre-determine the network preference of thecounterparty. As a direct result, corporates and banks will not be restricted to working only with

counterparties on the same network, Vonchek adds.

The announcement has been met with approval from banks.

Magnus Albrektsson, global channel manager in SEBs global transaction services, says: SEB is

very supportive of any initiative which drives standardisation and provides additional flexibility


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for banks and corporates. It is especially good to see cooperation between Swift and Bolero in

this way which provides great value to corporates and their banks.

US bank moves to MisysLast Updated March 28, 2011

Regional US bank FirstMerit has chosen Misys to provide the software infrastructure as the bank

aims to build up both its trade finance and foreign exchange businesses.

The market is changing and regional banks require a complete integrated international sol

The Ohio bank has opted for a number of Misys products which will integrate web-based front-

end and back office operations.

Misys Opics Plus, Misys Portal, TI Plust and Misys Trade Portal have all been implemented, as the

bank looks to grow its letter of credit, standby letter of credit and collections businesses,

amongst others.

The Misys solution will especially help improve our operational efficiencies and provide a

platform from which we can grow our business, says Craig Schurr, senior vice-president and

manager of FirstMerits international banking division.

We engaged an extensive analysis of vendor-based systems and Misys was the only company

able to provide a single hosted customer front-end and integrated back-office system for bothforeign exchange and trade finance, without involving a third party, Schurr adds.

Rick Salk, Misyss regional sales director, Americas, adds: The market is changing and regional

banks require a complete integrated international solution. FirstMerit has chosen our solution to

make sure it delivers on its objective of offering focused, flexible and prompt services to its

customers.

FirstMerit will be able to grow its FX and trade volumes, boost efficiency and broaden its

revenue streams, while keeping close to its customers, through our portal.

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Swift accredits Standard CharteredLast Updated July 29, 2011

Swift has granted Standard Chartered a readiness certification.

The bank will join Swifts online database, which can be searched and used by corporate

customers to gain information on the banks Swift capabilities.

Thomas Wiles, head of channel management at Standard Chartered, says: The Swift Bank

readiness certification is an affirmation of our commitment to transparency and to supporting

clients desire to communicate via Swift.

The number of companies adopting Swift globally is expected to grow especially across Asia,

Middle East and Africa, Swift says.

Bolero joins forces with INTTRALast Updated July 11, 2011

Tech firm Bolero has teamed up with US-based maritime e-commerce provider INTTRA in a bid

to make the ocean freight industry more efficient.

The affiliation will link Boleros trade finance community of banks and corporates with INTTRAs

extensive carrier and shipper network and drive convergence for the container shipping industry.

The announcement was made by Arthur Vonchek, Bolero chief executive, at Exportas supply

chain conference in London in June.

This is a relationship structure created to drive standards in the ocean shipment management

industry, said Vonchek and already has significant support from both INTTRA and Bolero

communities.

The partnership, which will result in a speedier and more coordinated documentation process,

will enable the real world adoption of an electronic bill of lading powered by Bolero technology

for the container shipping industry.


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It will reduce administration, operations costs and fees, as well as significantly cutting

down on time to cash.

Danske and Bolero ink trade finance

agreementLast Updated July 19, 2011

Bolero has signed an agreement with Denmarks Danske Bank to enhance multi-bank trade

finance services for its corporate customers.

The Bolero service will be used to support a range of traditional trade finance instruments

including import and export letters of credit, standbys and bank guarantees.

Sren Haugaard, Danske Banks head of group trade and export finance, says: We have seen

growing demand from our customers for a neutral multi-bank trade finance service. This decision

reflects both our commitment to provide service to our customers as well as adding an important

trade finance channel to our existing trade finance services.

Boleros CEO, Arthur Vonchek adds: The rapid expansion of our network in the Nordic area is a

result of the number of active corporate and bank customers already live on the Bolero service.

With all the major Nordic banks now supporting Bolero, this provides additional standardisation

for both corporates and banks and insulation from individual proprietary initiatives.

BAML gets Swift recognitionLast Updated May 09, 2011

Messaging firm Swift has granted Bank of America Merrill Lynch a readiness certification.

The new status means that the bank joins Swifts online database, which can be searched and

used by corporate customers to gain information on the banks Swift capabilities.

Receiving Swifts bank readiness certification is an exciting achievement for us, says Ivo

Distelbrink, head of the banks global treasury solutions, Asia Pacific.

Eli Lasker, head of corporate market at Swift, adds that the certification is an important process

for banks and corporates: It eliminates uncertainty and makes it easier for corporate customers

to make decisions related to Swift. The addition of Bank of America Merrill Lynch to the bank

ready list is a great achievement that will help raise awareness and adoption of the Swift for

corporates offering.


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Swift endorses BottomlineLast Updated May 25, 2011

Documentation automation firm Bottomline Technologies has been approved by Swift to sendand receive electronic invoices as a service provider over the messaging network.

The move pushes Bottomline further towards providing a fully automated service to customers.

Bottomline can now offer a service to banks to send and receive e-invoices on behalf of non-

Swift members.

We are extremely pleased that our Swift connectivity solutions have achieved this recognition,

says Eric Campbell, chief technology officer at Bottomline.

Andr Casterman, head of trade and supply chain at Swift, adds: We are delighted to seeBottomline, a valued Swift partner, demonstrate its commitment to playing a key role in Swifts

e-invoicing initiative.

Swift expects this collaboration to help drive market adoption of this international project to

standardise messaging systems.

Swift focuses on SSIsLast Updated February 22, 2011

Financial messaging firm Swift has rolled-out a new range of initiatives to combat settlement

errors and improve the rate of automation of Standing Settlement Instructions (SSIs).

The lack of a single source for SSI information has led to payment failures, costing banks considand money.

SSIs are instructions by one financial institution given to others about the correct procedure to

follow when making payments.

Swift has launched a global SSI directory to provide a database of commercial payment SSIs

which it claims contains SSIs for almost every financial institution in the world.

A second initiative is a standard messaging format for the distribution of cash SSI updates, which

Swift is releasing into the market in November 2011.


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These two new schemes join the diagnostics service that Swift revealed at October 2010s Sibos

event, which informs customers when counterparty SSIs in their payment applications are

incorrect.

SSIs help fast payment and settlement, though they are subject to regular changes between

institutions, which result in payment errors.

Swift estimates that these payment errors cost the financial services industry around US$700mn

a year.

The lack of a single source for SSI information has led to payment failures, costing banks

considerable time and money, says Patrik Neutjens, head of reference data at Swift.

In the age of automation and real-time reporting, it is crucial that this situation improves. These

three initiatives will provide a comprehensive solution to some of the problems with changing

SSIs. Swifts efforts will drastically improve the situation, culminating in a standard message

format to allow banks and other financial institutions to efficiently update each other on changesto their SSI arrangements, Neutjens adds.

Bolero completes eUCP world firstLast Updated December 13, 2010

Bolero has completed the first ever presentation of documents required under a letter of creditissued subject to the ICCs eUCP regulations.

The letter of credit went from Koreas Tae Kyung Ind. Co. to a major Australian mining company

that already uses Boleros multi-bank trade finance system.

"Straight through document presentation is going to be the way forward in internatrade."

Korea Exchange Bank acted as the issuing bank and RBS advised and negotiated on the deal.

The documents in the legally-binding ePresentation included a commercial invoice, packing list,

certificate of weight, certificate of analysis, bill of lading and insurance certificate.

Bolero has confirmed that the electronic documents sent via the Bolero platform have been

received and have been promptly honoured and paid by the issuing bank.


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The unique legal infrastructure of Bolero ensures that any documents presented as electronic

documents over the Bolero platform preserve the same legal meaning as the paper documents

they replace, comments Paul Mallon, director of legal at Bolero.

"There has been a growing interest for some while from both corporate and bankcommunities."

The ICCs eUCP was introduced in April 2002 to provide a standardised paperless process for

letters of credit and is designed to complement the widely-used UCP600 standards.

Although eUCP has been available for a number of years, it is only recently that adoption of an

open standardised solution incorporating the necessary legal framework has enabled leading

corporates and their banks to implement this standard in practice, says Bolero in a statement

seen exclusively by GTRbefore anyone else.

Anand Pande, regional head of products at RBS, Singapore, adds: RBS is delighted to haveplayed a pivotal role in making eUCP a reality for this large exporter. This is a significant

transaction for the industry, especially Asia, where there are frequent delays and inefficiencies in

the traditional letter of credit process due to the regions large geographical area.

Straight through document presentation is going to be the way forward in international trade as

it can help to reduce bottlenecks, increase payment certainty and reduce the time to payment.

The ePresentation was made using standard Bolero service functionally and allowed the

Australian exporter to send all of the documents to RBS as a single secure message.

The documents were then forwarded over Bolero to Korea Exchange Bank for approval andpayment.

There has been a growing interest for some while from both corporate and bank communities to

be able to support an efficient but effective electronic messaging capability, which clearly Bolero

is uniquely positioned to support, says Arthur Vonchek, Bolero chief executive officer.

Swift gets Islamic finance approvalLast Updated December 08, 2010

Tech-firm Swifts ISO 15022 message standards for treasurymurabahatransactions have been

certified compliant with international Islamic finance standards.

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) approved

Swifts message standards, a significant step towards bringing the full automation of processing

ofmurabaha treasury transactions closer.


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AAOIFI is responsible for global Islamic finance industry standards and we establish best

practices for the industry, comments Mohamad Nedal Alchaar, secretary general of AAOIFI.

Our collaboration with Swift aims to build a well-structured and well-regulated international

Islamic finance infrastructure, he concludes.

Murabaha treasury transactions, which represent around 60% of all Islamic financing, include

money transfers and commodities trades.

Swift is very pleased to have AAOIFIs endorsement. Our goals are aligned and we serve the

same members. Murabaha automation is the first step on a long journey of collaboration with the

Islamic financial community, says Alain Raes, Swifts chief executive for Europe.

Islamic finance is growing at more than 20% a year and the demand forshariah-compliant

message standards are increasing.

More than 240 Islamic banks are currently Swift members.

Swift plans price cutsLast Updated September 16, 2010

Technology firm Swift has announced that from January 1, 2011 the price of messages on its

core FIN service will be reduced by an average of 20%.

The cheaper rate will equal a saving of around 70mn (US$92mn) for Swift customers next year.

Lzaro Campos, chief executive officer at Swift, says: We have delivered the reduction by

focusing on increased efficiencies and rigorous cost controls at Swift despite the tough economic

environment and the decreased volume growth.

This is not the last cut to prices that Swift intends to make, as Campos continues: Consistent

with our strategy for the next five years, we are committed to further decreasing the price of our

messaging services in the future, while continuing to invest in the security and reliability of our

platform.

The reduced price applies to all types of FIN traffic and the tech-firm is extending an optionalfixed fee tariff to more customers.

The 20% reduction is the largest since 1995, when the company reduced their charges by the

same amount.

In the year to date, FIN traffic has grown by 7%, with the latest peak hitting 18.36mn messages

on May 11, 2010.


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Bolero project draws ECA fundingLast Updated October 13, 2010

Canadas Baja Mining has signed US$858mn worth of debt and equity facilities for thedevelopment of its Bolero project near Santa Rosalia, Mexico.

The bulk of the project financing came from the Export-Import Bank of the United States (US Ex-

Im), which provided US$419mn.

Canadas export credit agency Export Development Canada contributed US$150mn and the

Korean Development Bank loaned US$90mn.

The remaining US$100mn of the debt facility was supplied by five commercial banks: Barclays

Capital, Standard Bank, Standard Chartered, UniCredit and WestLB.

GTRrevealed in Junethat French commodities trader Louis Dreyfus would provide Baja with a

US$35mn letter of credit, entered into and labelled as a cost overrun agreement.

The commodities trader has also entered into a 10-year off take agreement with Baja to

purchase 70% of the projects copper and cobalt production.

The closing of the Boleo debt financing and the cost overrun funding are major milestones for

Baja and the mining industry in Mexico, says John Greenslade, president and chief executive

officer of Baja.

The closing of these facilities is a testament to the compelling economics of the project and thestrong effort of our team. It also means full scale construction activities at Boleo can commence

imminently.

Tom Ogryzlo, chair of Bajas board, adds: Being associated with the creation of the Bolero

project has been one of the most memorable events of my long career in the mining industry. I

am very proud to be working with such an outstanding management team.

The 25-year minimum Bolero project has 265 million tonnes of measured and indicated

resources.

Mexico has been host to a number of mining projects in 2010, including the Q2 beginning ofconstruction of a gold and silver mine in Oaxaca, Southern Mexico and feasibility studies of a

gold and copper mine in Chihuahua in Mexicos north.
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Konecranes turns to Bolero appsLast Updated September 22, 2010

Lifting equipment manufacturer Konecranes has upgraded its banking systems with Bolerosmulti-bank trade finance solution.

The crane company called on Bolero to improve its export letters of credit and bank guarantees

systems.

Bolero successfully installed its system within 60 days of the agreements being signed with

Konecranes.

Matti Malminen, director, trade finance at the crane firm, says: Efficient management of trade

finance is a clear priority for a global business such as Konecranes. We have looked carefully at

different initiatives aimed at improving the visibility, effectiveness and automation of our tradefinance processes and clearly believe that Bolero provides us with the tools to allow us to meet

these goals.

A key benefit to us of using the Bolero applications is the ability to start driving value quickly

without the need to spend time installing hardware or software infrastructure.

Claire Buchanan, senior vice-president, global field operations at Bolero, adds: Konecranes are a

great company to partner with and have demonstrated focus and commitment in achieving live

operations in such a short time.

We look forward to partnering closely with Konecranes as they continue their live rollout andsuccessfully collaborate over Bolero with a growing number of partner banks.

Viveo and Bolero join forcesLast Updated November 05, 2009

Bolero and Viveo have joined forces to broaden the scope of the solutions they offer their clients,

with Bolero hoping to find more business opportunities from commodity trading companies.

Viveo offers trade and trade finance applications for commodity traders, with its solutions

providing simple and swift manipulation of typical trade transactions, enabling the complete

management and tracking of future contracts and matching of sales and purchases. This enables

management to access an up-to-date view of the profitability of each operation, along with the

control of the overall risk exposure. Viveo also manages the complete lifecycle of product

shipments and deliveries.


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Bolero provides a multi-banking channel for corporate customers, while at same time providing a

multi-corporate electronic channel for each bank. Boleros system avoids the need for multiple

different processes and interfaces between corporates and their banks.

Through working with Viveo, Bolero hopes to build its presence among commodity traders.Arthur Vonchek, CEO of Bolero, comments: The use ofan open multi-bank channel for trade

finance has increased momentum significantly over the last 18 months.

Commodity traders, in particular, are very active in this space and have become one of the

fastest growing priority markets for Bolero. The agreement to partner with Viveo Switzerland is

for us a logical consequence of this market development and the recognized strength of Viveo

solutions for this market.

The two companies have signed a cooperation agreement under which they will share their

expertise and improve both their product offerings. Viveos CEO, Robert de Picciotto, comments:

Viveo and Bolero solutions are entirely complementary extending the reach of our traditionalsolutions into the detailed area of the LC and Guarantee application and management processes

while at the same time providing a legally binding secure electronic communications channel to

those banks who are providing trade finance services to our trade commodity customers

He adds: The need for a common neutral infrastructure between corporates and banks has been

understood for some while within our community. It is clear that Bolero has already solved this

problem on a broader global basis and has a large community of banks and corporates

transacting live on their platform.

CBA signs with BoleroLast Updated September 29, 2010

Commonwealth Bank of Australia (CBA) has signed an agreement with Bolero to enable the bank

to provide collaborative trade finance services to its customers.

This move will allow the bank to offer an on-line guarantees service both to its own customers as

well as to those who intend to use this as a multi-bank service.

Tony Sacre, general manager, global transaction services at CBA, comments: CommonwealthBank has a strong commitment to customer service and to our total capital solutions (TCS)

initiative. The TCS offering gives clients access to debt, equity, risk management, transaction

banking and trade finance solutions across the whole balance sheet.

Bolero provides trade finance applications delivered as web-based SaaS (software as a service)

solutions enabling speedy adoption, minimal infrastructure costs and flexible use. Underlying


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these applications is Boleros electronic multi-banking channel solution which ensures security,

legal certainty, non-repudiation and document originality.

The addition of the Bolero service to our existing solutions and skills base will allow the bank to

extend our geographic reach to support our customers as their trade finance needs grow, says

Sacre. Particularly in the areas of guarantees and documentary credits, we recognise theopportunity to deliver significant value to our customers.

Cairo Amman looks to EastNetsLast Updated November 15, 2010

Jordans Cairo Amman Bank has turned to compliance and payments solutions provider EastNets

to integrate the bank with the Swift network.

Cairo Amman will use EastNets en.Paymentsafe solution to link its core banking modules withSwift and allow the banks local and branch users to monitor, reject and authorise Swift

messages.

The four-month integration now sees Cairo Amman using en.Paymentsafes web interface,

mailing capabilities and mapping engine, among other things.

The project reinforces Cairo Amman Banks reputation as a technology leader witmarket."

According to Hazem Mulhim, chief executive officer of EastNets, the completion of the projectreinforces

Cairo Amman Banks reputation as a technology leader within its market. This service will enable

our client to maximize Swifts resources and assure its own customers of the highest levels of

financial messaging speed, reliability and security.

Lloyds TSB partners with Bolero

Last Updated June 22, 2010

Lloyds TSB Corporate Markets has signed a strategic partnership with paperless trading solutions

provider Bolero.

The agreement will allow the bank unrestricted use of Boleros multi-bank, collaborative trade

finance service which allows the automation of the end-to-end lifecycle of letter of credit and

guarantee instruments for both importers and exporters.


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John Salter, head of trade, payments and cards, transaction banking at Lloyds TSB, comments

on the necessity of the partnership: Through regular dialogue, it had become clear that a

number of our corporate clients, especially our larger, multi-bank trade customers, are looking

for a service that could deliver a single point of access to their various banks. Singing this

agreement with Bolero will now enable us to provide this by giving Lloyds TSB Corporate Markets

full access to its multi-bank trade finance service.

Claire Buchanan, senior vice-president, global field operations at Bolero, comments: Through

this partnership with Bolero, the bank will gain the ability to deliver proven value to their own

customer community, as well as taking a leadership role in delivering the same solutions to those

corporate and commodity trader customers who require a multi-bank service.

Boleros chief executive officer, Arthur Vonchek, adds: We are delighted to welcome them to the

growing number of banks globally who are delivering trade finance services over the common

Bolero channel, providing benefits for both bank and corporate communities.

VEB signs MOU with SwiftLast Updated March 25, 2010

Russian state-owned Vneshenconombank (VEB) has signed a memorandum of understanding

(MOU) with Swift, the payment solutions provider.

The MOU, signed by VEB first-deputy chairman Nikolay Kosov and Swifts CEO Lazaro Campos,

sets out basic agreements that will underlie further cooperation between the two parties.

This includes the standardisation of Swift infrastructure used by VEB and its subsidiary

companies and banks and the use of the SWIFTNet platform.

This comes less than a month after GTRreported Swifts collaboration with the Bank of China in

launching its Bank Payment Obligation programme on its trade services utility platform.

Swift launches BPO

Last Updated March 17, 2010

Swift is set to trial the Bank Payment Obligation (BPO), a new Trade Services Utility (TSU)

programme designed to eliminate issues associated with traditional letters of credit (LC).

The BPO is an irrevocable obligation for an importer bank to pay, which is conditional on

presentation of specific electronic data from an exporter bank, via the TSU interface.


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The electronic data that the TSU requires is screened and categorised into mandatory and non-

mandatory information.

The hope is that banks will only be presented with relevant information, rather than reams of

unnecessary secondary data, ultimately reducing the risk of human error and fraud.

So far, 18 institutions that already use TSU have agreed to take part in live testing, with the first

BPO deal due to take place with the Bank of China by the end of March.

David Hennah, senior product manager of supply chain, banking markets, at Swift, told GTR:

The BPO is a layer on top of the TSU and the TSU is a complex beast; it can be made as simple

or as complicated as people want it to be. The TSU works by both primary import and export

banks deciding on a baseline of conditions, and the BPO is one of these optional conditions.

The importer bank can decide to have a BPO added to the baseline where they are saying that

provided the exporter bank provides data compliant with the baseline, the importer bank will

pay. The beauty of it is that everything is done electronically.

Swift are hoping to use case studies taken from live testing with the Bank of China and other

institutions to put forward a case to the International Chamber of Commerce to gain official

approval, which will lead to the BPO becoming standard trade practice.

Swift expands US presenceLast Updated December 02, 2009

Swift, the global provider of financial messaging services, has accepted Union Credit Bank as a

member of its global community of close to 9,000 financial institutions.

Union Credit Bank a Miami-based, independent financial institution serving individuals and

small business across Southeast Florida is connecting to Swifts messaging network via Alliance

Lite, an internet-based service that enables corporates and small financial institutions to link up.

Fernando Capablanca, president and CEO at Union Credit Bank, comments: Swifts Alliance Lite

will help us grow our business and get into other areas that traditionally would have been

challenging for us. As a result, we can now run our international payment transactions over

Swift, which will be faster and more secure as well as grow our trade finance business byallowing us to expand our international correspondent banks network.

Union Credit Bank will integrate Swift Alliance Lite with a series of software solutions from ECS

Financials called IMS, (Integrated Messaging Services). ECS Financials is a Swift-certified

solutions partner and provider of architectural designs, specifications, message libraries,

dashboards and solutions in the field of middleware and message-based communication.


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David Pryce, managing director, Americas at Swift, says: Extending our reach to smaller

financial institutions is a big focus for Swift and Alliance Lite is a driving factor of this endeavour.

With fast, easy and cost-effective access to Swift, smaller financial institutions can maintain a

competitive edge in todays challenging market by offering customers additional services, such

as trade financing and international payments.

Alliance Lite was launched in 2008 and today 200 banks and corporations globally are using

Alliance Lite to access Swift.

Trade finance in china, SWIFT, BOLERO, Maxtrad

the internet keeps on revolutionizing trade finance

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