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Managing all your banks in one place

Multi-bank applications for trade services are here. Rupert Sayer describes the latest progress with Globaltrade Corporation’s platform @GlobalTrade, which boasts HVB Group and DaimlerChrysler as recent clients.

“It is HVB’s main target to provide its customers with trade services holding a genuine surplus value,” says Markus Wohlgeschaffen, managing director and head of trade and payment products at HVB, Germany’s third largest bank, now part of Unicredit Group.

“The biggest potential for enhancing value can be realised by the conversion of the physical and financial supply chain. This, however, implies one fundamental prerequisite: the thorough understanding that customers are the driving force in all foreign trade processes and that all other parties, including banks, are only subordinated participants,” adds Wohlgeschaffen. For this reason HVB has partnered with Globaltrade Corporation (GTC), a company that has developed a customer-oriented multi-bank multi-entity platform called @GlobalTrade™ GTC, based in Toronto,Canada, designs, develops and manages innovative, collaborative software products and services for global trade services. “GTC’s platform features modular design to expand product functionality and simplify customisation process,” says GTC’s CTO Nick Pachnev. “All modules use the same base platform components reducing the costs of running the system by banks as a service for their clients. The base platform modules include multi-level company management, role-bases access control and a workflow engine, configurable web forms with flexible mapping of transactional data, address book, standard clauses, archiving, ad hoc and scheduled reporting. All functions are accessible through a web-browser simplifying rollout of new bank products and services to clients. The platform supports automated data transfer of flat files, SWIFT, DTA and XML messages providing additional cost savings for volume processors.”

Multiple bank reasons

HVB has partnered with GTC to bring to market applications for handling guarantees, letters of credit, and documentary collections designed for corporates that require connections to multiple banks. The applications are based on the @GlobalTrade Platform technology designed and developed by GTC over the last four years with input from HVB, DaimlerChrysler, ChevronTexaco, Europcell, Siemens, Bank of China and other corporates and banks. According to GTC’s CEO, Jacob Katsman, two major corporates and 25 banks are now live with @GlobalTrade eLC Delivery, Export LC, Export Collection and Guarantee applications. “Official announcements to the market will be made in the following months and the market should see that ideas of multi-bank applications for trade are indeed becoming a reality,” says Katsman. HVB is hosting @GlobalTrade applications for guarantee issuance, export letter of credit, and documentary collection processing at its data centre in Munich and providing those applications as a service to its clients and their banks. Corporate clients using these applications are not limited to HVB and can connect to all their banks.

All in one place

Now corporates do not need to enter multiple proprietary bank systems to communicate with their respective banks electronically when applying for letters of credit and guarantee issuance or receiving export letters of credit and drawing details. This brings about considerable cost savings, improved risk control, and real time information across all banking relationships. “The adoption of @GlobalTrade Platform by HVB brings about a paradigm shift in the bank’s thinking about open multi-bank platforms,” claims Katsman. “HVB has realised that its large customers want to communicate with all their banks in trade transactions through a single web-based platform and it has met this need.”

It’s not Bolero

Katsman admits that the GTC business model is radically different from the Bolero model, where banks need to pay relatively high annual fees to stay connected to the Bolero network. “We license our software to a bank that acts as an application service provider (ASP) to its corporate clients and other banks and logistics providers that are part of the corporate’s financial and logistics supply chain are invited to participate,” he says. “Usually there is no need to license additional software or buy hardware to participate for those parties. The ASP bank makes its own financial arrangement with the corporate client based on its internal pricing model. Corporates can also license @GlobalTrade applications directly from GTC and host them internally or in a third party data centre thereafter inviting their banks and logistics providers to collaborate with them on the platform. The platform is also open for corporate subsidiaries, departments and trading partners. HVB is currently offering to its clients @GlobalTrade the Export Documentary Credit Application and Standby-LC/Guarantee Application.

Export Documentary Credit Application is designed for corporates that wish to receive letters of credit (LCs) electronically from HVB and also from other banks, share LC details with parties within and outside their organisation, prepare compliant documents, collaborate on those documents with third parties, allow a bank of their choice to pre-check such documents electronically before they are presented, and thereafter present the documents electronically, in paper form, or mixed electronic and paper. Standby-LC/Guarantee Application enables corporates to apply for issuance of standby LCs or guarantees and any subsequent amendments electronically. In addition HVB-@GlobalTrade permits to administer corporate and insurance guarantees as well. The platform concept of HVB-@GlobalTrade allows a common and unified communication tool with/for all connected banks. A flexible role-based access control workflow enables centralised credit and process control over multiple subsidiary locations and/or users. The workflow is designed with an option whereby HVB (or in theory any other bank) can act either as a custodian or agent offering value-added services (eg, monitoring of fee settlement or credit line utilisation, and so on). The primary target market is large corporates that have multiple banking relationships and have significant volume of transactions that require trade services. HVB is offering additional value added trade services to complement the innovative technology offering.   The bottom line is a tailor made technology and trade services offering that meets the client’s current and future needs.