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Here we look at the global challenges facing banks today and propose a new way to initiate their trade finance business and capture growth.
Citation preview
Transforming trade finance Global challenges and a new way forward
Name SurnameJob title
3© Misys 2014 9 April 2023
The big picture – rising demand for working capital finance
Increased global regulation and compliance demands
Increased expectations/sophistication of
commercial clients
Increased importance of liquidity management
Growth in demand for open account assistance and supply chain finance
Growth in international trade and South-South shift
Growth in Small to Medium Enterprises (SMEs)
Fragmented processing and service coverage from banks
4© Misys 2014 9 April 2023
There are opportunities but also key challenges
Information islands and varying product coverage globally mean no consolidated view across the business to inform decisions
Clients expect standard international service levels – hard with multiple processing centres, service channels and products across countries
Rising operating costs and limited ability to quickly adapt and broaden revenue streams into open account or working capital finance services
Caused by an inability to prioritise and proactively manage work for clients, based on service level agreements
Struggle to expand quickly to gain market share through innovative and competitive product offerings due to legacy operations and fragmented channels
No single view of business
Inconsistent international delivery
High costs, low margins and revenue decline
Client attrition
Inability to expand
5© Misys 2014 9 April 2023
What these challenges mean to you
No single view of business
Inconsistent international delivery
High costs, low margins, revenue decline
Client attrition Inability to expand
Fragmented data
Poor SLA management
Heightened group risk
Meeting local requirements
High operating costs
High FTE rate
Reputational impact
Less impactful value proposition for international corporates
Multi-country operational silos
Lack of standardised global processing baseline
Inconsistent product/service delivery
Operational risk Competition and regulation
6© Misys 2014 9 April 2023
Failure to address the challenges has a significant negative impact
Margin, cost and revenue pressure
No single view
Inconsistent global service & operations
Constrained growth
Loss of clients
Market share Revenue Brand image
Reduced ability to win new business X Failure to meet KPIs for growth
X Fail to improve global business operationsCustomer attrition
Increased operational errors and non-compliance
X Fail to meet risk KPIsX Unable to follow clients into new markets
Higher costs of local IT and staff Customer attrition Less competitive
Profitable, scalable growthX Failure to meet KPIs for growthCustomer attrition
Decreased opportunity to drive new revenue streams Customer acquisition
Brand image Client share of wallet
Declining revenues Ability to win new business
Industry commentators also reinforce these barriers to growth
Key for any centralised processing function is to free up the client facing elements of the organisation to deliver quality customer service.
Gareth Watts – Trade Product Manager, Bank of America
”
“
7© Misys 2014 9 April 2023
A major challenge for the industry is the lack of data timely and detailed enough to understand and monitor trade finance metrics.
Thierry Senechal – Senior Policy Manager, ICC Banking Commission
”
“Banks are seeking a return on their investment in new trade and SCF products. We see them turning to partners who have the reach, technology and the experience to help unleash the nascent potential in their trade finance business.
Enrico Camerinelli – Senior Analyst, Aite Group
”
“
Implementing trade transactions such as L/Cs, should be the same around the world but when you hit the road you often find that local variations in regulation such as tax rules, may be very different from location to location.
Gareth Watts – Trade Product Manager, Bank of America
”
“
The biggest driver will be the increasing need for advanced infrastructure systems, which will enable a wider spectrum of trade finance capabilities.
ICC Global Trade and Finance Survey 2013
”
“
8© Misys 2014 9 April 2023
Banks are investing in their trade finance business to capture growth
Major drivers of spending are the international expansion strategies of banks, supply chain financing, and cash management - Celent
69%
of banks cited operational inefficiency, disparate
systems and low STP
45%
are dissatisfied with level of cash visibility across their banking
relationships 8%
CAGR
Est. revenues from transaction banking rising to $1.1trillion
by 202249%
plan to adopt or replace new trade finance systems within 3 years
Boston Consulting Group
Eurofinance corporate treasury survey
Finextra/Misys GTB trends CEB Towergroup
9© Misys 2014 9 April 2023
You too can adapt to unlock the potential of international trade services
Expand and compete effectively in both local and global markets without compromising operational control or increasing operational costs
A single view of businessfor better informed decisions
Centralised workflow control to expand the business
Drive margin and STP improvement to boost revenues
Consistent global SLAs and modern channels to win on service
A global operating model to expand - think local, act global
Focus on client self help and service level differentiation to meet and anticipate client demands for products and services
Increase volumes and revenues from corporate banking, driving STP efficiencies without increasing FTE/operational costs
Deliver consistent trade and working capital services with multi-regional processing - without losing local service or product flexibility
Gain real time views across operations without major investment in monitoring tools and optimise transaction throughput for clients
10© Misys 2014 9 April 2023
Globalisation
By transitioning from multiple independent regional silos...
No single view
Disjointedservice
High TCO
No STP, no SLA
Poor scalability
What’s the value for major corporate or SME clients?
11© Misys 2014 9 April 2023
To a proven multi-regional processing approach...
Centralised processing. Single global view. Global baseline.
Regional Hub e.g.
NAM
Regional Hub e.g.
EUR
Regional Hub e.g.
APAC
Become the ‘go-to’ bank for international corporates and SMEs
Centralised SLA management
Introduce global/regional teams and roles
Consistency of service
Pass efficiency on to clients – competitive edge
12© Misys 2014 9 April 2023
Globalisation
With an international, multi-channel unified corporate portal...
13© Misys 2014 9 April 2023
Globalisation
...that is fully integrated with a global trade finance back office
14© Misys 2014 9 April 2023
That drives global growth with service leadership and working capital services – while maintaining scalability and reducing cost
Flexible workflow customisation to implement your target operating
model
Centralised global SLA dashboards
Global/regional processing reduce IT (25%) and staff costs
(80%+)
Model bank proven to reduce time to market by 60%
A global sales tool – has helped grow corporate banking revenues by >89%
The deepest, integrated portal functionality for trade, cash and FX
Bank and client side self-service
FusionBanking Trade Innovation
FusionBanking Corporate Channels
Integration with a unified digital corporate channels
Dedicated mobile apps for tradeand cash
Pre-packaged and customisable workflows for the broadest range of
trade and WCF products
15
And delivers a new way forward with a focus on global service
An integrated, standardised platform capable of operating across multiple regions / countries
Team & role based workflow and security with virtual teams
Work flows automatically designated to locations:
• Central processing hubs• Specialist units
Multiple back office services and integration points
Enables local offices to act locally. Frees them up to ‘manage the customers’
Scalability, usability and performance
Cross zone SLA dashboard for all work in progress:
• Premium customers / Premium service
15© Misys 2014 9 April 2023
16© Misys 2014 9 April 2023
Delivered with more certainty and speed via Misys MAPs and Models
Build once, deploy many times…
E.g. 80% delivered using proven process and application models based on 200+ implementations
…leaving 20% customized via the toolkit for each regional deployment
The traditional requirements-led approach... or the Misys model and process led approach?
• Poor benefits realisation and poor scope control • A clear view of the end-to-end process to improve scope management
• Cost and timescale over-run and no stakeholder alignment • A baseline standard process model to speed global implementation
• Non-standard - difficult to extend and maintain • Powerful workflow customization to drive local compliance and product delivery needs
17© Misys 2014 9 April 2023
Increase profitability, reduce risk and become more competitive
Increased growth and expansion
Increased delivery consistency
Increased revenue; lower costs
Increased transparency of business
Increased client acquisition
New revenue streams
Reduce product time to market
Increase agility
Scalable operations & higher volumes
Consistent user experience
Reduce sales costs
Extended operating hours
Lower TCO
Improved brand image
Retain profitable business
Increase cross-sell
Increase revenue
Improve operating margins
Central control
Proactive decision making
Reduce operational risk
Reduce regulatory risk
Deeper client relationships
Greater client satisfaction
Brand image
Service control client by client
18© Misys 2014 9 April 2023
Effectively solve today’s challenges and prepare for the future
No single view of business
Client attrition
Inconsistent international delivery
High costs, low margins, revenue decline
Inability to expand
Cannot meet service level expectations
Loss of market share and revenue
Lose out to the competition
Fail to maintain relevance in trade finance
Fail to follow clients into new markets
Think local, act global
Differentiate with service leadership
Rapid time to market with model bank
Total workflow control - your target
operating model
Seize new opportunities in trade and supply
chain finance
Become the go-to bank for multinational clients
FusionBanking trade services facts
19© Misys 2014 9 April 2023
Solution has helped to increase client corporate banking revenues by as much as
• Best software provider for trade finance - GTR, Trade Finance and TFR
• Best in Class ‘Corporate Client Service’ – CEB TowerGroup
Business case analysis demonstrates ROI in trade finance within 3 years and a reduction of IT and operational costs by as much as
80%
Fusion Banking Trade Innovation helps customers increase trade volumes by
50% or more
89%
20© Misys 2014 9 April 2023