Trade Finance Automation

For centralized operations, improved compliance and enhanced revenues

Overview
The Trade Finance industry is process-oriented, document-intensive and highly skill
demanding. Global trade finance processes have not been optimized sufficiently due
to paper-based practices slowing down key processes such as discrepancies
handling. Staff with the requisite skills may not be present at all branches, and hiring
trade specialists for low volume branches may not always be economically viable. The
process suffers due to delays in document movement from branches to centre, and
the delay is aggravated in case of banks spread across large geographies. This
necessitates centralization of Trade Finance operations.
Letters of Credit, Collections, Guarantees are the various common methods for
providing documentary credit for domestic and cross-border trade. The process
involves in-depth credit analysis, and the criteria for evaluation may differ each time.
Multiple approvals are required for LC processing, and exception handling - back and
forth - is an issue. Pressure from competitors has made it imminent for the process
defined to be agile and flexible, adaptable to the dynamic market environment.
Cross-boundary trade is heavily government regulated - which mandates
compliance and necessitates comprehensive control and monitoring of operations.

Business Challenges
Highly skilled staff required
To function as trade finance practitioners and understand clients' needs
To handle trade bills of individual clients
Regulatory and internal compliance in handling trade business
Compliance check necessary at initiation due to inter country movement of
documents
Adapting to and implementing at branch level, the continuously evolving
security norms by international government and financial service regulators
High turnaround time for movement of documents between branches and
Central Processing Unit
Communication with client in case of discrepancy or requirement of
additional documents

Newgen's Solution
Newgens Trade Finance solutions facilitate automation and centralization of all
standard processes such as Export, Import, Negotiation, Quotation and Remittances,
leading to improved customer service owing to timely decision making and the focus
of branches now shifting to client relationships. Trade Finance offerings can be ably
extended even to low volume branches. This leads to pooling of resources, and
increased throughput, which finally results in reduced operational costs. With the
flexibility provided by the solution, processes can be structured according to changing
market needs. With the help of checklists, efficient tracking of credit documents, and
internal controls, government compliance is met. Increased visibility on transaction
details leads to mitigation of risk.
The solution ensures timely and accurate payments in trade business to the benefit of
both buyers and sellers. The financial institutions implementing the Newgen solution
would be poised for increased efficiency, enhanced productivity, higher business
volumes, reduced operational costs and enhanced customer delight. Process
improvement and reduction in transaction cycle supports more efficient
management of working capital, enabling the release of substantial volumes of cash
which might otherwise be trapped in the supply chain.

Trade Finance Processes Automated by Newgen

Import LC

Export LC

Remittances

Guarantees

Import LC Issuance

Export LC Advising

Inward Remittances

Inward Foreign

Import LC Amendment

Export Packing Credit

Import LC Cancellation

Packing Credit

Export / Other than

Export (By MT 103)
Outward Remittances
Imports / Other than
Imports (By FTT (Swift) /
FDD)

Guarantees
Outward Foreign
Guarantees
Invocation of Bank
Guarantees

Import Bills under

Collection
Realization of Import
Bills
Direct Import Bills
Advance Import Bills
Shipping Guarantee/
Delivery Order

Cancellation
Export Bill Negotiation
Export Bill Collection
Export Collection Bill

Realization
Advance against
Collection Bills
Export Bills Free of
Payment

Solution Benefits

Centralized trade operations with online trade finance processing at a central hub
No need of highly skilled staff at branches
Trade business can be extended even to low volume branches
With ease of implementing new products , new revenue generation opportunities are envisaged
Better reconciliation and effective financial control
360 degree business monitoring and tracking of loan requests
Automated checklist to ensure compliance with internal/regulatory policies

Enabling Agility in Trade Finance for a Leading Bank in EMEA

Challenges
Bank was running various applications and worried about upgrading the applications every time there was a

change in the business process

Bank wanted to achieve business agility by moving to a common platform for all the processes which could be

changed easily

Processes Automated
15 Trade Finance processes were automated under the
following functions:
Letter of Credit (LC)
Export Settlement
Letter of Guarantee Issuance & Amendment
Shipping Guarantee Issuance
Trust Receipt Settlement

Benefits
Providing business agility by enabling frequent

process changes
Reduced turn-around-time for LC/LG issuance
Availability of online images for verification
Improved exception handling and tracking
Enhanced compliance with complete accountability

Figure: Trade Finance Application Screenshot

About Newgen
Leading Global Provider of Business Process Management (BPM), Enterprise
Content Management (ECM) & Customer Communication Management (CCM)
900 installations across 50 countries
Solutions for Banking, Insurance, Healthcare, BPO/SSCs, Telecom and Government
Credited with some of the world's largest implementations
Innovative culture, consistent R&D investments, 35+ patents
Employee strength 1100+
Certified for ISO 9001:2008, ISO 27001:2005 and CMMI Level3
OFFICES
India
Newgen Software Technologies Ltd.
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Qutab Institutional Area,
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Tel: +91-11-4077 0100,
+91-11-2696 3571, 2696 4733
Fax: +91-11-2685 6936
Email: corpmktg@newgensoft.com
For Sales Query: +91 11 40773769

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Tel: +1-703-439-0703
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Europe, Middle East & Africas

Newgen Software Technologies Ltd.
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P O Box. 500297,
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Email: emea@newgensoft.com
For Sales Query: +44 (0) 2036 514805
+973-1-619-8002

SOLUTIONS FOR BUSINESS PROCESS & CONTENT MANAGEMENT

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Newgen Software Pte Ltd.
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Singapore 068909
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Fax: +65 6221 6923
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For Sales Query: +65 3157 6189