Digitising Trade Finance: Enhancing Efficiency and Reducing Paperwork
Explore the benefits and challenges of digitising trade finance processes, including cost savings, faster processing, and improved risk management. Discover key solutions such as OCR and ICR technologies, electronic bills of lading, and the potential of blockchain. Learn about the readiness of banks and corporates in the MENA region for digital transformation and what steps banks can take to drive adoption among clients.
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Presentation Transcript
Going Paperless: Improving uptake of Trade Finance Digitisation
Global Merchandise Trade Roughly around USD 15-16 Trillion annually. Estimated annual Trade Finance Revenues for Banks are around USD 23 Billion Trade Finance still is a highly paper intensive area of business in Banking. It is estimated that in a single Cross Border trade transaction, roughly around 30-35 Original Documents are required. The cost for handling LC transactions are high for Banks due to manual document handling, checking and processing, which in turnleads to delays, occasional errors and inefficiency.
Digitisation of Trade leads to. Faster and Smooth Processing Saves Costs Enhances Risk Management Better Working Capital Management
Key Solutions LC Doc Prep Services Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) technologies. MT798 Bank Payment Obligation Electronic Bills of Lading Blockchain (Still at early stage for Trade Finance)
Are Banks and Corporates in Mena region ready for this digital challenge? The Desire to move towards Digitisation of Trade exists on both sides. Cash Management Solutions have seen much more success in Digitisation. Quite a few business entities in GCC still prefers Traditional way of extending their Approvals and insists on signing documents rather than approving it online
Some of the Challenges in Digitisation of Trade Requirement of Physical paper documents for areas such as Customs Clearance. Level of investment needed. IT Systems related Security Risks
What Banks need to do more Increase Awareness amongst Clients, especially amongst SME and Small Corporates. Incentivize Clients for using Digital Platform for Trade transactions, wherever possible. Partnership between Banks and FinTech Companies may open new avenues.
