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Sponsored: Trade digitisation – the path to win-win

Asia / 27-09-17 / by

Digitising trade benefits corporates, banks and even regulators tremendously. Top banks are taking the lead in exploring cutting edge technologies to augment how trade finance is conducted and facilitate value creation for all participants in the ecosystem, writes Lim Him Chuan, Managing Director and Group Head of Product Management at DBS’ Global Transaction Services.

 

The imperative for trade digitisation

Shifting external landscape and changing customer expectations are forcing trade banks to re-think their existing business models and processes. Many are faced with compressed margins from labour-intensive paper-based processes and increasing cost of due diligence given more stringent compliance and regulatory requirements. At the same time, customers are consistently looking for shorter processing turnaround time, risk mitigation and attractive pricing to optimise their set-up.

An increasingly compelling answer to these challenges is digitisation for both banks and corporates. Through digitisation, manual and error-prone processes can be reduced, risk can be detected ahead of time and ultimately greater visibility and collaboration are created amongst all trade players regardless of industry or geography.

The business impact of digitisation is tremendous. Deloitte’s recent Economic Growth and Development in Asia report, for instance, showed that Indian SMEs with higher digital engagement achieve 27% higher revenue growth and are 65% more likely to access international markets. As well, Indonesian SMEs with advanced online capabilities have up to 80% higher revenue growth.

The benefits for banks are also huge.Conservative industry estimates at one bank showed that digitisation of trade finance could save up to US$50mn per year and two hours per transaction, according to research by the International Chamber of Commerce (ICC). Meanwhile, research by Ernst & Young (EY) showed that using software robotics to enhance processes in the back office can reduce costs and handling time by 25-40%. At DBS, the introduction of fully online applications for bankers’ guarantees has reduced the time for application approval by 70%. Along with these quantitative improvements in cost and processing efficiency, there are also qualitative benefits in risk mitigation and regulatory compliance.

 

Digitisation in trade lags innovation in consumer banking

Despite the many benefits, trade digitisation is not happening at nearly the same speed as digitisation for retail consumers such as e-commerce payments. Indeed, the 2017 ICC Global Survey on Trade Finance showed that just over 7% of respondents at national, regional and global banks with trade finance functions see digitisation as being widespread in trade, with 20% saying that there is no evident digitisation at all.

A key reason for the lack of digitisation is that digitising trade is complex as it requires changes in legacy processes, documentation and management practices. In particular, SMEs lack the skills and scale to make the change. Moreover, siloed digitisation within a single organisation has limited benefits. A classic example is the delivery of shipping documents. Information may come in the form of digital data from their ERP systems, however, this has to be translated into hardcopy documents as it tends to change hands in paper form in most parts of the world. In addition, the lack of a common and widely accepted legal framework has impeded the adoption of digital exchange in title documents.

Various attempts to promote digital solutions in the trade industry have not been widely adopted either, resulting in trade documentation and settlement remaining heavily paper-based. Existing industry solutions have yet to gain critical mass despite the potential of delivering a fully digital end-to-end process for trade transactions. Much of these can be attributed to the cross-border nature of trade finance and a lack of interoperability of the different solutions.

 

Innovation is driving change

Increasingly, innovation is also starting to deliver broader advancements and benefits of digitisation.

One key innovation is blockchain. Its distributed and immutable nature allows real-time tracking of transaction statuses or title ownership transfers and engenders trust in the authenticity of information without an independent central party. Banks can utilise solutions such as smart contracts to automate transaction checking and financing where rule-based processes are executed upon the fulfilment of contract conditions. This will eliminate the need for manual and paper-based checking of documents, thus cutting down cost and man-hours. The rule-based execution of contract conditions also lowers execution risk and allows corporates quicker access to cash.

Another compelling innovation is big data analytics. One way is to harness the large vault of information available internally within one’s organisation as well as industry data from external ecosystems. This allows banks to identify trends in customer behaviour to develop business insights, detect anomalies in transactional activities and refine decision making.

While these and other digital solutions are being developed by the bigger banks and multinationals, digitisation will have cascading benefits across the entire trade ecosystem. Large buyers will be able to offer better support for small suppliers, while banks will be able to deliver more secure solutions that make it easier for SMEs to become digital.

 

How should banks lead the change to make trade digitisation successful?

1. Customer centricity

The biggest strides in trade digitisation so far are happening in banks, mainly in automating processes to increase productivity, leveraging data analytics for risk management as well as promoting business growth. However, for these efforts to truly bear fruit, the answer lies in the banks’ ability to embed banking services in the corporate customer’s journey exactly at point of need.

Much of banks’ past successes were product focused. However, this may no longer be sufficient to meet customers’ changing expectations. Banks have to return to the drawing board and ask: “What does my corporate customer truly need? How does this improve their business and banking experience?” Only through thorough examination and understanding of the corporate customers’ day-to-day workings can real pain points be identified and addressed.

For example, corporates may be able to provide information such as invoices in digital form. However, as downstream parties such as banks require paper documents for processing or due diligence checks, this digital data is printed or faxed before being physically delivered. Banks may be able to meet a corporate’s financing requirements, but have failed to consider and improve the customer experience.

With customer-centric digital solutions that address the full end-to-end trade settlement process from point of engagement to automated processing
and post-processing engagement, banks will be able to extend trade services that make customers’ banking experience joyful whilst making a positive difference to their business. This can be achieved through creating intuitive customer interfaces and enhancing system connectivity, as examples.

This in turn increases customer satisfaction and loyalty thereby yielding greater cross-sell opportunities for the banks as well. Thus, to harness the full potential of digitisation, customer centricity is key to enhance product value propositions and promote digital adoption across the trade network.

 

2. Building the digital trade ecosystem through collaboration

Although banks and corporates may develop leading-edge digital capabilities themselves, they cannot work in siloes. The nature of the trade ecosystem requires that market players collaborate to create a network effect that boosts trade digitisation among multiple parties across the entire supply chain.

Along with digitising data at its source, there must be system interoperability so that the various trade parties can share transactional data across different industries and geographic locations to create value-adding and scalable solutions. The key enablers to such interoperability are common industry data standards such as ISO20022 and a legal framework that is recognised across different jurisdictions.

With interoperability and data standardisation, banks, corporates and other trade parties will be able to communicate and transact seamlessly through any platform or ecosystem. This will also enable mapping of data into the back-end systems for straight-through processing.

It may not be realistic to expect immediate change, as the upheaval of numerous trade counterparties’ systems and processes and mind-sets cannot happen overnight. That said, it is important to have alignment in the vision of digitisation amongst banks, corporates, governments and trade-related organisations to create a network effect so that digitisation moves along faster.

 

DBS digitises trade

One financial institution at the forefront of developing digital solutions is DBS, which is embedding itself in the customer journey so that it can understand customers’ pain points and work to transform trade practices. The bank is using its learnings to develop customer-centric solutions both internally and for clients so that they can take full advantage of digitisation across all facets of trade.

Internally, for instance, DBS has developed capabilities to promote digital business acquisition such as online bank guarantees and letters of credit, and integration with accounting packages such as Xero. Automation of internal processes with robotic process automation, chatbots, automated trade alerts and more is delivering benefits such as shorter turnaround times and lower costs.

DBS has also piloted a trade analytics solution, named Trade Alerts, to screen for red flags on trade finance transactions and detect anomalies in transaction behaviour. Leveraging data analytics and artificial intelligence, the solution will reduce the time taken to screen transactions for AML and fraud risks during processing.

Recognising that it is important to collaborate across the trade ecosystem, DBS is also actively involved in local, regional and global industry initiatives to promote trade digitisation. DBS is a leading member of the taskforce established by the Monetary Authority of Singapore (MAS) for its National Trade Platform (NTP) initiative. NTP is a joint collaboration with various Singapore government agencies business organisations, financial institutions and logistics providers. The vision of NTP is to develop a national info-ecosystem that provides the foundation for Singapore to be the world’s leading trade, supply chain and financing hub through the digitisation of trade.

 

The time to digitise is now

While smaller businesses in particular and even some larger ones may find digitisation as too complex or costly, the trade ecosystem is moving rapidly toward digitisation. Corporates and banks alike will be left behind if they do not keep up. Rather than losing out on opportunities to grow revenue and increase efficiency, banks and corporates should collaborate so that they achieve the many benefits that trade digitisation can bring. Indeed, banks have come to realise that digitisation is a very compelling approach towards future-proofing their trade business.

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Privacy Policy

Our privacy commitments

This Privacy Policy outlines the information we may collect about you in relation to your use of our websites, events, related publications and services (“personal data”) and how we may use that personal data. It also outlines the methods by which we and our service providers may (subject to necessary consents) monitor your online behaviour to deliver customised advertisements, marketing materials and other tailored services. This Privacy Policy also tells you how you can verify the accuracy of your personal data and how you can request that we delete or update it.

This Privacy Policy applies to all websites operated by Exporta Publishing & Events Ltd (as indicated on the relevant website).

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Any questions regarding this Policy and our privacy practices should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

Who are we?

Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

Our principal business activities are:

  • Business-to-Business financial publishing. We provide a range of products and services focused on international commodities, export, supply chain and trade finance markets including magazines, newsletters, electronic information and data
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This Data Protection Policy explains when and why we collect personal information about people who visit our website, how we use it, the conditions under which we may disclose it to others and how we keep it secure.

Why do we collect information from you?

Our primary goal in collecting personal data from you is to give you an enjoyable customised experience whilst allowing us to provide services and features that will meet your needs.
We collect certain personal data from you, which you give to us when using our Site and/or registering or subscribing for our products and services. However, we also give you the option to access our Sites’ home pages without subscribing or registering or disclosing your personal data.

We also collect certain personal data from other group companies to whom you have given information through their websites (including, by way of example, Exporta Publishing & Events Ltd and subsidiaries, in accordance with the purposes listed below). Should we discover that any such personal data has been delivered to any of the Sites, we will remove that information as soon as possible.

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This Data Protection Policy ensures Exporta Publishing & Events Ltd:

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We may change this Policy from time to time so please check this page occasionally to ensure that you’re happy with any changes. By using our website, you’re agreeing to be bound by this Policy.

Data protection law

The Data Protection Act 1998 described how organisations – including Exporta Publishing & Events Ltd – must collect, handle and store personal information. These rules apply regardless of whether data is stored electronically, on paper or on other materials. To comply with the law, personal information collected must be stored safely, not disclosed unlawfully and used fairly.

The Data Protection Act is underpinned by eight important principles. These say that personal data must:

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How do we collect information from you?

We obtain information about you when you use our website, for example, when you contact us about products and services, when you register for an event, register to receive eNewsletters, subscribe or register for a trial to our GTR magazine/website.

 Types of Personal Data Held and its Use

1.      Customer Services and Administration

On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

This information is used to administer and deliver to you the products and/or services you have requested, to operate our Sites efficiently and improve our service to you, and to retain records of our business transactions and communications. By using the Sites and submitting personal information through the registration process you are agreeing that we may collect, hold, process and use your information (including personal information) for the purpose of providing you with the Site services and developing our business, which shall include (without limitation) the purposes described in the below paragraphs.

2.      Monitoring use of our Sites

Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

are not publicly available. Once you are logged on, the actions you take – for example, viewing an article – will be recorded (subject to any necessary consents). We may use technology or a service provider to do this for us. This information may be used for one or more of the following purposes:

  • to fulfil our obligations to you;
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  • to enable our journalists to contact and interact with you online in connection with any content you may post to our Sites.

Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
We give you the opportunity to opt-out of receiving marketing communications. Further detail can be found on the applicable Site and in the footer of each marketing communication sent by us, our group companies or service providers. See also “Consents and opt-outs” section below.
We will not share your information with third parties for marketing purposes.

4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.

 

Why do we use cookies?

  1. Log In – Where we provide log in mechanisms for site users a cookie is created at login and for the duration of the session. Each cookie contains a unique reference number only (no personal information) which is used to confirm you are authorised.
  2. Analytics – To allow us to keep track of traffic to our website we use cookies. The cookies simply tell us if you have previously visited our website so we can get more accurate figures for New vs Returning visitors.

Find and control your cookies

All of the major browser providers offer advice on setting up and using the privacy and security functions for their products. If you require technical advice or support for a specific browser/version please contact the provider or visit their website for further details: www.microsoft.com / www.mozilla.com / www.apple.com
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We may use cookies to:

  • remember that you have used the Site before; this means we can identify the number of unique visitors we receive to different parts of the Site. This allows us to make sure we have enough capacity for the number of users that we get and make sure that the Site runs fast enough
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  • gather information about the pages on the Site that you visit, and other information about other websites that you visit, so as to place you in a “market segment”. This information is only collected by reference to the IP address that you are using, but does include information about the county and city you are in, together with the name of your internet service provider.

Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting www.allaboutcookies.org which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

6.      E-mail tracking

E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

How do you track GTR eNewsletters?

To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7.      Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

  • Indicating at the point on the relevant Site where personal data is collected
  • Informing us by e-mail, post or phone
  • Updating your preferences on the applicable Site or eNewsletter (unsubscribe and preference options are available in the footer of each eNewsletter)

To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9.      Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

  • unauthorised access
  • improper use or disclosure
  • unauthorised modification
  • unlawful destruction or accidental loss

All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.

Responsibilities

Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller


The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
  • E-mail: privacy@gtreview.com

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

  • erased
  • rectified or amended
  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.