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Sibos 2010 looks set to witness a major industry innovation with the first-ever demonstrations of mobile trade and supply chain finance, writes Liz Salecka.

While trade and treasury convergence looks set to continue grabbing much of the limelight at Sibos 2010, this year’s event is also likely to be the launch pad for another major industry first – mobile trade and supply chain finance.

“Historically, the banking industry has not been known as an innovator in technology adoption as compared to the fast moving consumer goods (FMCG) market. That is changing rapidly as we speak,” says Tan Kah Chye, global head of corporate cash and trade, transaction banking at Standard Chartered.

“I foresee that all the information on trade and supply chain finance (SCF) that is made available on a PC will soon be available via iPhones and iPads.”

Aside from being used to conduct supply chain finance transactions on the move, iPhones are expected to play a key role in enabling senior managers to track down the status of such activities. They will, for example, be able to follow the entire lifecycle of a letter of credit application – from finding out whether it has been received at a bank’s branch to whether or not the bank manager has approved it – using their iPhones.

Tan adds: “A lot of corporates need access to real-time information – especially senior managers who are always travelling, out of the office most of the time, and want to be able to track transactions and working capital positions.”

“If a transaction is at the approval stage, and certain information is not yet available, you can then advise the client by sending a short message service (SMS). All status updates can be sent on to the end client in this way.”

This ready access to information is also expected to prove valuable to importers and exporters. An exporter, alerted via his iPhone that a letter of credit has been approved, can immediately pass this information on to the logistics or shipping company involved, advising them to commence shipment.

“In Asia, for example, cash flows are tight across many countries, and suppliers often prefer receiving payment before sending goods. If they are informed immediately via an SMS from their bank that a buyer’s payment has been received, they can release goods to the buyer straight away,” says Ashutosh Kumar, global head of trade product management, Standard Chartered.

A number of banks and technology companies are currently looking to enhance their trade and SCF solutions by offering mobile access.

“This will make it easier for CFOs and other trade professionals to access information, approve transactions, get information on outstandings and charges, and pass this information on to other stakeholders while on the move,” says Adnan Ghani, head of trade finance, RBS.

UniCredit is also monitoring the situation. “We have noticed increased interest in mobile solutions from smaller businesses,” says Marcus Wohlgeschaffen, head of global trade finance and services, UniCredit. “However, larger corporates tend to have established finance departments where these transactions are managed.”

And Jon Richman, global product head, trade and financial supply chain, global transaction banking, Deutsche Bank, adds: “We do offer mobile payment solutions for clients, and this is certainly an application that we see developing in the supply chain space.”

Misys, which offers banks and corporates Trade Portal for Multi-Bank (MTP for Multi-Bank), a front-end solution that corporates can use to gain a consolidated online view of trade transactions with multiple banks, also has plans in this area.

Here, Olivier Berthier, solutions director, transaction banking, Misys, points out that it is important for bank providers to fully harness the capabilities of mobile devices when offering mobile trade and SCF.

“An iPhone App is not the end of the story, and to really benefit you have to evaluate the whole spectrum of capabilities that mobile technology allows,” he says.

“It is one thing to offer mobile banking services in this way but to really benefit here banks have to evaluate the whole range of capabilities that can be offered such as mobile web and two-way SMS messaging.”

However, Bertrand De Comminges, head of the global trade advisory team in Emea, JP Morgan, warns that mobile solutions may bring security issues.

“There are some ongoing security concerns in relation to providing mobile-based access to financial/treasury information flows, and the success of these initiatives will depend on the security that has been put in place,” he says. “For our major multinational clients, security is crucial, and providing mobile access involves uploading sensitive commercial information and moving it around the globe.” GTR