trade for corporates - a practical case study metsä finance, nordea and globaltrade corporation...
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Trade for Corporates - a practical case study
Metsä Finance, Nordea and GlobalTrade Corporation work together to streamline data exchange for export L/Cs from Europe
Trade for Corporates – a practical case study
Speaking today:
Urs Kern, Senior Market Expert, Trade and Supply Chain, SWIFT Kimmo Helle, Vice-President, Treasury Development, Metsä Group Financial Services Oy
Claus Asbjörn Stehr, Head of Trade and Project Finance, Nordea
Nick Pachnev, CTO, GlobalTrade Corporation
MT700
SWIFT flows FIN MT798
SWIFT flows FileAct
MT798s
SWIFT flows FIN MT7xx
MT798s
Importer’s bank(s)
Exporter
Exporter’sbank(s)
Importer
SWIFTNet SWIFTNet SWIFTNet
MT798s Documents
1. Importer sends Application for a Letter of Credit (MT798) to its bank either via FIN or FileAct
2. Importer’s bank’s application extracts the appropriate fields from the MT 798, putting them into an Issue of Letter of Credit (MT700) and sends them to the Exporter’s bank
3. Exporter’s bank’s application forwards the MT700 inside an MT798 to the Exporter as an Advice of Letter of Credit
4. Exporter sends documents via FileAct to its bank (e.g. pre-checking)
1 2 3
4
Trade for Corporates – in theory…
The business requirements of the Metsä Group…
Kimmo HelleVice-President, Treasury Development, Metsä Group Financial Services Oy
Trade for Corporates – in practice…
Metsäliitto Group
Metsäliitto: Trade Finance L/C handling
Starting point:• Handling of export documentation decentralized within
Metsäliitto Group– Paper and board at customer service units in the markets– Saw mills at each mill location– Plywood centralized to one location– Pulp centralized to one location– Tissue centralized to one location
• Trade Finance centralized to Metsä Group Financial Services• Export documentation done for around 50 different countries
Metsäliitto: Targets for Trade Finance Centralization
• One way of doing export documentation– One policy/principles– One process– One system (@GlobalTrade)
• Trade Finance knowledge accumulated to one organisation– Consultation to users– Training of users
• Focusing to smaller number of business partners (banks)– More straight forward management of relationships– Easier to develop business processes
• Cost savings
Trade Finance Principles
Uniform handling of Documentary Credits and Documentary Collections
•Uniform handling of Documentary Credits and Documentary Collections means use of common IT system and common set of rules
Common IT system
•For Documentary Credits we use globally a commercial software @GlobalTrade
•For Documentary Collections we use globally a software supplied by a selected bank
Common set of rules
•System and common principles guide the user to make documentation correctly and in a uniform way in every business unit of the Group
Trade finance process
Handling ofdocumentarycredits and
documentarycollections
Daily supportto business
units
System supportand system
development
Processownership
Business Units
Metsä Finance
MetsäFinance
MetsäFinance
Common principles
Trade Finance export documentary credits and documentary collections process responsibilities
Metsäliitto: Electronic L/C handling
Issuing-Bank
Customer
Metsäliitto group
Customer Service Center
2) L/C advice
SWIFT/MT700
5) Scanned documents
checked by Nordea in
Global Trade system
7) Original documents with Nordea´s
cover letter
1) Opening of L/C
@Global Trade
SWIFTAlliance
Lite
Metsä GroupFinancial Services
4) L/C process managed in @GlobalTrade by CSC6) Cover letter from
Nordea
3) Electronic Advice/MT798 message
Trade for Corporates – in practice…
11
How has Nordea met Metsä Finance’s requirements?
Claus Asbjörn Stehr Head of Trade and Project Finance, Nordea
Other key figures• Capitalization EUR 30bn
• Total assets EUR 571bn
• 36,500 employees
Market shares corporate lending• Finland: 37%
• Denmark: 21%
• Norway: 16%
• Sweden: 14%
Customers• 700 thousand active corporate
customers
• 10 million household customers of which 7.5 million are in active customer programs
Coverage• Leading bank in the Nordic & Baltic
Sea region
• 1,400 branches
Rating• Moody’s: Short: P-1, Long: Aa2
• S & P: Short: A-1+, Long: AA-
Facts about Nordea
Nordea Trade Finance
• Largest Nordic Trade Finance service provider
– Combined Nordic market share 35-36%– Active participation in local and international ICC Banking Commissions – Member of various trade finance related international working groups
• Trade Finance units in all Nordic countries, Baltic countries, Poland, Russia, London, New York, Singapore and Shanghai
• One Operating Model (OOM) for Trade Finance in all Nordea units in order to:
– Attract a larger share of the strong underlying business and growth potential – Harmonize and unify all processes in order to increase quality and efficiency
• Awards:
– “Best Trade Finance Bank” by Global Finance 2010 in Denmark and Finland– “Best Trade Bank in Nordics/Baltic’s 2010” by readers of Trade Finance Magazine
SWIFT MT798 pilot programme in Nordea
• Existing customer expectations for new innovative solutions
• Willingness to support customer in the process development
• Drive to pilot MT798 with Metsä Group Financial Services Oy
• Teamwork with Metsä Group Financial Services Oy, GlobalTrade Corporation and SWIFT is essential for success
• Opportunity to create value added service
• In-house built interface from Trade Finance back office system to the SWIFT network
@Global Trade
SWIFTAlliance
Lite
Metsä GroupFinancial Services
Opportunities for Nordea with the MT798
• Quick and smooth processing without any additional steps
• Enables easy monitoring of the sent message
• Safe, authenticated messaging
• Solution for any local or global customer
16
Trade for Corporates – in practice…
17
How did GTC make it happen?
Nick PachnevCTO, GlobalTrade Corporation
SWIFT for CorporatesExport LC
About GlobalTrade Corporation
• GlobalTrade Corporation (GTC) is a software developer and applications service provider whose product solutions improve the world of trade finance and trade services
• GTC's technology helps buyers, sellers, traders, and financial institutions communicate faster and more efficiently to free up working capital, realize cost savings, reduce risks and improve monitoring and control
• Our Clients are:
– Corporations that need consolidated access to multiple banks and logistic providers
– Banks that require trade finance and trade services software solutions to meet their clients’ needs
• Our expertise is in multi-bank financial supply chain systems
Best Independent Trade Platform/System Provider 2005, 2006, and 2007 by Euromoney’s Trade Finance Magazine
2006 Canada’s 10th Fastest Growing Company by Profit Magazine Full Compliance with the 2010 criteria for
the SWIFT Corporates – Trade Finance Label
Clients
Process:
• Nordea sends MT798 export LC advice or amendment through existing SWIFT interface
• SWIFT delivers messages to Alliance Lite Autoclient application installed at Metsäliitto
• Alliance Lite Autoclient saves message into its reception directory
• @GlobalTrade Ucon application transfers Export LC messages from the Lite reception directory to @GlobalTrade server over authenticated and encrypted Internet connection
• @GT system allocates messages to various Metsäliitto business units
• Metsäliitto employees process the messages in @GT system using web-browser
Export LC advice through SWIFT
Export LC System
@GT Ucon
Other Banks
Solution Components & Setup
@GT Ucon
Alliance Lite is a desktop SWIFT application offering SWIFT connectivity to new low volume users through the Internet. The application is installed internally
@GlobalTrade Ucon is a desktop application used for transferring files (SWIFT messages, ERP data, trade documents) from corporate internal network to remotely hosted @GlobalTrade systems through Internet.The application is installed internally
@GlobalTrade Export LC System is a web-based multi-bank corporate solution for managing of Export LCs and preparation of documents. The solution can be installed internally or hosted externally. Export LC System is part of @GlobalTrade Platform that also has solutions for Import LCs, Bank Guarantees, Standbys and Documentary Collections
@Global Trade
SWIFTAlliance
Lite
Metsä GroupFinancial Services
Contact Information
Nick Pachnev
W: +1 416 661 8520
M: +1 416 837 8888
For more information please visit: www.globaltradecorp.com
GlobalTrade Corporation
2727 Steeles Ave. West, 4th Floor
Toronto, ON, Canada, M3J 3G9
Tel: +1 416 661 8520
Fax: +1 416 661 2819
E-Mail: [email protected]
Next steps:
• Enhance use of the MT798 for acceptance of documents, discrepancies and payment• Extend the use of SWIFT to Cash Management
• Roll out present functionality to other customers using SWIFT and MT798 - harvest on the deliveries
• Add further functionality to the existing solution e.g. make it an integral part of a supply chain offering concept
• Respond to Metsä’s requeston enhanced use
• Use the SWIFT FileAct service for pre-checking of documents
• Roll out MT798 messaging to existing and new GlobalTrade clients
• Complete implementation of new message flows
Trade for Corporates – in practice…
Any questions?