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
Trade for Corporates – in theory…
SWIFT flows FIN MT798
SWIFT flows FIN MT7xx
SWIFT flows FileAct
MT798s
MT798s
1
2
3
SWIFTNet
SWIFTNet
SWIFTNet
Importer
Exporter
Importer’s
bank(s)
MT700
Exporter’s
bank(s)
4
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)
MT798s
Documents
Trade for Corporates – in practice…
The business requirements of the Metsä Group…
Kimmo Helle
Vice-President, Treasury Development,
Metsä Group Financial Services Oy
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 export documentary credits and
documentary collections process responsibilities
Trade finance process
Handling of
documentary
credits and
documentary
collections
Daily support
to business
units
System support
and system
development
Process
ownership
Business
Units
Metsä
Finance
Metsä
Finance
Metsä
Finance
Common principles
Metsäliitto: Electronic L/C handling
3) Electronic Advice/MT798 message
SWIFT
Alliance
Lite
2) L/C advice
SWIFT/MT700
Issuing-Bank
Metsä Group
Financial Services
@Global Trade
5) Scanned documents
checked by Nordea in
Global Trade system
6) Cover letter from
Nordea
4) L/C process managed
in @GlobalTrade by CSC
1) Opening of L/C
7) Original documents with
Nordea´s cover letter
Customer
Metsäliitto group
Customer Service Center
Trade for Corporates – in practice…
How has Nordea met Metsä Finance’s
requirements?
Claus Asbjörn Stehr
Head of Trade and Project Finance, Nordea
11
Facts about Nordea
Customers
Other key figures
• 700 thousand active corporate
customers
• Capitalization EUR 30bn
• 10 million household customers of
which 7.5 million are in active
customer programs
• 36,500 employees
• Total assets EUR 571bn
Market shares corporate lending
• Finland:
37%
• Leading bank in the Nordic & Baltic
Sea region
• Denmark:
21%
• Norway:
16%
• 1,400 branches
• Sweden:
14%
Coverage
Rating
• Moody’s: Short: P-1, Long: Aa2
• S & P: Short: A-1+, Long: AA-
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
SWIFT
Alliance
Lite
Metsä Group
Financial Services
@Global Trade
• 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
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…
How did GTC make it happen?
Nick Pachnev
CTO, GlobalTrade Corporation
17
SWIFT for Corporates
Export 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
2006 Canada’s
10th Fastest
Growing
Company by
Profit Magazine
Best Independent Trade
Platform/System Provider
2005, 2006, and 2007 by
Euromoney’s Trade
Finance Magazine
Full Compliance with the 2010 criteria for
the SWIFT Corporates – Trade Finance
Label
Clients
Export LC advice through SWIFT
@GT
Ucon
Other
Banks
Export LC System
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
Solution Components & Setup
Alliance Lite is a desktop SWIFT application offering
SWIFT connectivity to new
Metsä Group
SWIFT
low volume users through
Financial Services
Alliance
the Internet. The application
Lite
@Global Trade
is installed internally
@GT
Ucon
@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 multibank 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
Contact Information
Nick Pachnev
pachnev@globaltradecorp.com
W: +1 416 661 8520
M: +1 416 837 8888
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: info@globaltradecorp.com
For more information please visit: www.globaltradecorp.com
Trade for Corporates – in practice…
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 request
on 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
Any questions?