Simplify Your Trade Finance Operations with Robotic Process Automation

The international trade is at a peak in an expanding manner due to the gaining momentum of the fourth industrial revolution.  An efficient economy can be reached if there is a booming trade, and this also results in higher bank workloads, specifically in the domain of Trade Finance.

Global trade has mechanical risks, and this can be in any form. For instance, the seller does not receive the money for the goods dispatch, or the buyer did not receive the goods after the payment. In the case of both seller and buyer are from two various countries, they need to enclose the related risk by engaging as a mediator with the banking authorities.

Trade Financing is a distinctive banking function that decreases global trade and other associated risk in a simple way. It is also considered as the cumbersome banking process, which involves at least four parties.

Trade Finance – the working mechanism:

The bank of the buyer offers a letter of credit to the bank of the seller. Once the seller proves that the ordered goods are taken place through submission of the lading bill, the payment will be offered. The buyer’s bank’s letter of credit is one crucial guarantee considered once the bank of the buyer has received a proof that the seller has shipped the goods ordered along with the right terms of the agreement, and then the payment is released to the seller.

What are the problems in Trade Finance?

Let’s consider that there is a transaction of trade occurring in between two different countries. In this case, there will be many paper works on both transaction sides. The banking intermediaries should be careful about every document before the payment release as they assume an obligation to level off the transaction.

Let’s consider that there is a transaction of trade occurring in between two different countries. In this case, there will be many paper works on both transaction sides. The banking intermediaries should be careful about every document before the payment release as they assume an obligation to level off the transaction.

It is a manual and tedious task which needs many days for completing a transaction. The banking representatives face immense stress in execution due to the increase of quantum of international trade. They should risk their credibility as a bank or offer quick service. In the meantime, they also should curtail OpEx and optimize operations. Generally, Robotics process automation or technology will be the best solution.

How does robotic process automation help in Trade Finance?

The solution enrolls optical character recognition or robotic process automation or intelligence data capture as well as AI (Artificial Intelligence) algorithms to offer end to end automation for the processes of trade finance.

For every transaction of trade finance, the solutions auto-focus data namely port of the entry, amount, invoice number, currency, shipper name, and more from the supporting documents. This studies the document’s categories and information under pre-defined headings, namely packing slip, purchase order, bill of lading, invoice, and more from an extensive collection of unstructured format text documents. If there is any specific supporting is not found, it will send a message to the stakeholders regarding the missed supporting.

To weed out a suspicious transaction, the solution weighs every transaction against the list provided by Hunter, World-Check, Blacklisting, OFAC, FIRCO, Sanctions, and other governing bodies. Other best features can be developed into a solution that has intelligent inboxes for collaborators which raise flag based on the transaction priorities or transforms the transaction to another inbox of validator to save time and bypass hinders.

Once the collaborator validated the transaction and provided the approval, the operation is combined with the system of core banking. Now the banking system release a SWIFT payment to the bank of the seller, and then the transaction loop gets closed. 

The solutions stipulate an electronically driven and paperless environment. This can be hosted on the cloud as well as on-premise. It indicates fast processing and quality output when compared to the transactions that are made manually.

How Robotic Process Automation solution measure up for trade finance?

The export of world merchandise is increased from US$ 16.03 trillion in 2016 to US$ 17.73 trillion in 2017 based on the WTO. In 2018, they totaled about US$ 19.48 trillion when compared to the previous year 2017. It is now mandatory for every sector of banking to support the industry to hold on to its development due to the rise of global trade volume.

The robotic process automation enables banks to automate verification and validation, integration, compliance checks, and document holding. It also decreases the errors by 40% and increases efficiency by 65%. The solutions remarkably reduce the processing time of letters of credit as well as minimize the forth and back communication between involved parties, and enhances customer satisfaction.

The solutions also match the case with verifier’s skills and offer business agility by reducing total operational costs. It also decreases the TAT and provides seamless integration along with 360-degree business monitoring with the business system. As a whole, the solution help understands ideal resource utilization.

Bringing together the Robotic process automation and organization leadership facilitates developing of engaging solutions facing a buoyant and smarter economy. Intellect faces efficiently offer Robotic process automation to deliver the best results in the industry.

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