12 June 2014

Trade industry progressing towards digitisation

Success stories with MT 798 and BPO demonstrate increasing demand for - and adoption of - SWIFT’s multi-banking trade solutions by corporates and banks.

The annual SWIFT Trade and Supply Chain EMEA User Conference took place on 21-22 May in SWIFT's London office, and this year attracted more than 100 attendees. The theme of the event was Digitising the end-to-end trade flows, and the two day agenda explored the progress the industry has made with digitising existing trade instruments, innovating with new trade instruments and driving collaborative innovation among players in the corporate-to-corporate space. The conference was brought to the community with the support of four SWIFT certified vendors - BankTrade, China Systems, Global Trade Corporation (GTC) and Surecomp.

Welcoming participants, Andre Casterman, Global Head Corporate and Supply Chain Markets at SWIFT and Member of the ICC Banking Executive Committee, highlighted the successes achieved at the industry level during the past year. "The use of SWIFT's MT 798 and ISO 20022 innovations for trade is steadily increasing, thanks to some banks taking the lead and acting as early movers in their markets," he told delegates. "At SWIFT, we continue to focus on collaborative innovation, working with our certified application vendors such as BankTrade, China Systems, GTC and Surecomp, and with specific providers active in the corporate-to-corporate trade - space such as essDOCS."

Marcus Treacher, SWIFT Board Member and Chair of SWIFT's Corporate Advisory Group (CAG), then shared the vision of the SWIFT Board when it comes to meeting the needs of corporates. He received overwhelming support from the audience for the proposed new mission statement for SWIFT in the Corporate market: "To be the most preferred secure network for multi-banked corporates globally."

During the conference, delegates heard that more corporates are adopting SWIFT's multi-banking trade solutions. The role of the certified applications vendors has been crucial here, as explained by Jörgen Holmgren, Director Corporate Finance, Export Letter of Credit, AB Volvo, who shared his drivers for implementing a solution using the MT 798. "We want to keep our decentralised organisation whilst moving to electronic communication with banks and producing detailed and aggregated reports on all levels," he told delegates. "The combined use of GTC and SWIFT got our preference."

Jacob Katsman, CEO, GlobalTrade Corporation, confirmed the relevance for his business and his customers of partnering with SWIFT: "Our expertise at GTC lies in providing multinational corporations with multi-bank trade finance solutions. Working with SWIFT, we can tell our prospective clients that our solution is multi-bank by definition, as SWIFT connects more than 10,000 financial institutions in 212 countries."

The audience also received an update on the adoption of the Bank Payment Obligation (BPO) by banks. Ali Gülhan, Assistant Manager - Foreign Trade & Commercial Loan Operations Division, Türkiye Is Bankasi (Isbank), explained his motivation to adopt the BPO. "Isbank wants to continue its forerunner mission and be able to present new products to its customers. The Bank Payment Obligation offers us a great opportunity to achieve this as the risk is minimal thanks to the non-documentary process. Our corporate and SME clients really appreciate this innovation and we are happy to be live both with the first multi-bank transaction in Turkey as well as the first multibank transaction in Europe."

Eric Henry, Global Head of e-Trade - Global Trade Solutions, BNP Paribas, explained his recent experience: "We were delighted to find a bank willing to perform BPO transactions in euros with us. Both BNP Paribas and Isbank support key trade flows and the BPO responds to our clients' needs". BNP Paribas was the first European bank to go live on the MT 798 back in 2010 and now confirms its leadership position in SWIFT's initiatives by being the first bank to go live on BPO.

Reminding delegates of the rationale for adopting the BPO, Alexander Goulandris, CEO, essDOCS, confirmed the increased interest among corporates in automating paper trade processes - driven in large part by the fact that electronic bills of lading (eB/Ls) are now a reality. "Electronic presentation of shipping documents allows corporates to accelerate payments, reduce demurrage and reduce courier fees. By combining our electronic bill of lading solutions with the BPO payment instrument, we can provide our Corporate clients with the most advanced digital solution in both corporate-to-corporate and corporate-to-bank spaces." he said.

Commenting on the progress of SWIFT's multi-banking trade solutions, Alain Raes, chief executive, EMEA and Asia Pacific, SWIFT, says: "The demand for technology-driven solutions is growing as corporates realise the benefits of automating such flows. SWIFT is keen to act as an agent of change to help banks and their clients move to paperless trade."

Fact and figures
  • 30 banking groups live on SWIFT’s MT 798 standards for L/Cs and Demand Guarantees with 20 corporates
  • 9 banking groups live on ISO 20022 standards for the Bank Payment Obligation with 30+ corporates

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