Trade for corporates – completing the offering
SWIFT works with the Trade community to finalise the new Trade Finance flows
Published on 07 Apr 2010
Banks need to offer a multi-bank, multi-business facility to their corporate customers,a single channel for cash management, treasury and trade finance. This was the priority during the first development stage of trade finance flows in 2008, when the trade community, consisting of banks, corporates and vendors, was already very involved with SWIFT. Immediate feedback demanded additional flows on the Guarantees side and this was followed by a number of requests for more messages for Documentary Credits.
Serving banks and corporates alike:
Banks and corporates now have a single channel for exchanging standardised corporate to bank trade data. Banks can also streamline their own operations, processing messages from their corporates on to the next bank in the chain with minimal handling.
Trade for corporates for Import and Export Documentary Credits and Guarantees and Standby Letters of Credit now covers 43 flows. This more than doubles the original offering made available in December 2008. Banks now have a complete offering for Documentary Credits, and Guarantees and Standby Letters of Credit for their corporate customers.
In turn, corporates already connected to SWIFT can leverage this investment using a single channel and communication standard with all their trade banks. They benefit by saving time and money, adding security and often easing compliance as they gain a centralised view of their trade transactions worldwide.
SWIFT member banks are enthusiastic:
BNP Paribas has answered ArcelorMittal's request for a trade finance portal offering a multibank approach. Says Eric Henry, Head of e-trade, global trade solutions, BNP Paribas: "At the beginning of 2009, BNP Paribas Group decided to use SWIFTNet as its unique channel of communication with trade finance solution providers offering a multi-bank approach". Says Henry: "SWIFT offers a real reach to the banking community to those of our corporates requesting a multibank solution. SWIFT for corporates offering for trade finance reinforces BNP Paribas' trade distribution channels and helps the bank satisfy clients needing multi-banking solutions for their trade operations. In addition, this builds nicely on BNP Paribas' multi-business SWIFTNet offer that now spans Cash, FX, Securities and Trade services. In turn this drives major benefits for corporate customers as they can leverage SWIFT beyond traditional usage for Treasury and Cash Management.
At RBS, Deborah Seliski, Director, Traditional Trade Channels & Supply Chain Services, is seeing an increase in requests from corporate clients to exchange trade transactions through non bank trade platforms in order to achieve a single data standard across multiple banking partners. However, according to Seliski, introducing third party platforms only compounds the problem of non standard trade data as each solution uses a proprietary data format. RBS is looking to achieve the same results as its clients - data standardisation that permits straight-through processing- with little to no manual intervention. Adnan Ghani, Head of Global Trade Finance, RBS, agrees with Seliski that SWIFT is a win-win proposition, as it enables corporate clients to standardise trade transactions across their banking partners whilst leveraging their back office systems and their SWIFT investment. With the growing convergence of cash and trade channels at RBS, the SWIFT link between corporates and the bank becomes increasingly important in driving additional savings for both parties as well as processing efficiency.
Erwin Freiburghaus, Head Product Management, Trade Finance at UBS, considers that forUBS, the expansion of SWIFT for corporates to trade finance answers clients' needs for their trade finance business. "The community of corporate clients who want to have a single data communication channel to all banks is growing. It is UBS' firm belief that SWIFT for corporates offering for trade finance will become established as the standard means of communication between corporate clients and banks. By using the multi-business facility of SWIFT's offering, these clients can efficiently leverage their investments in the communication channel."
What's next?
First up will be the redevelopment of the Documentary Collection messages. Several banks have requested these as an extension of the trade for corporates offering. These messages will be available in 2011 for end-to-end use (from the Principal to the Drawee via their Banks) and in the ISO 20022 XML syntax. We will also complete the offering with corporate-to-bank standards to support open account transactions.
Continuing to work with the trade community
SWIFT has been delighted with the contribution from the trade community - banks, corporates, vendors, associations and individuals - throughout the process to date. We look forward to continuing this development process, as this will provide the most robust offering for trade finance over SWIFT in the years to come. André Casterman, Head of Trade and Supply Chain at SWIFT, comments: "SWIFT's mission in trade and supply chain is to help banks gain more trade finance business by offering their customers innovative ways of conducting business. Extending our Standards portfolio to growing market needs is a key activity to achieve this goal."
For detailed documentation, see http://www.swift.com/corporates/resource.htm under Technical and Practical Information, MT Implementation guide, Volume II.