The company’s trade finance team was using multiple systems and manual processes to create and manage letters of credit (LoC). This created disparate information, inconsistent data capture, and limited visibility for others in the LoC process. There were operational risks because the systems were not integrated and tracking of all LoCs was accomplished with a manual spreadsheet.
In addition, their requirements were unique due to the company’s role as both a trading entity and a bank, and the market solutions offered were not comprehensive enough to cover all of their requirements.
The client engaged MRE to strategically analyze, roadmap, design, and build a solution to minimize their systems footprint, streamline operational costs associated with letters of credit management, and reduce business risks.
The solution was to build a custom web-based application hosted in the Cloud, integrating with internal and external systems to manage LoC activities for their Bank and Trading businesses.
- Provided a single source of truth for LoCs globally with standardized end-to-end workflow process to request, create, enrich, amend, and drawdown LoCs for inbound/outbound Documentary and Standby LoCs
- Provided a repository for all documentation required for LoCs
- Integrated with SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, digitizing both inbound and outbound messages
- Integrated with their internal systems for trade capture (RightAngle), risk management, credit, and corporate data warehouse
The new platform provided a single point of entry and a full LoC lifecycle straight-through process (STP) workflow which streamlined the business process and reduced operational costs and risks.
Key benefits included:
- Provided visibility to front office, middle office, and back office in letters of credit management, reducing business risks
- Consolidated multiple systems into one single point of entry and workflow, removed duplicate data entry
- Integrated with trade systems and deal linkage for risk transfers
- Successful SWIFT message generation with automated data validations resulting in 99.87% submission success rate. This saved costs due to rework and provided faster turnaround time for customers
- Automated generation of LoC from inbound SWIFT messages which reduced paper and data entry
- Supported increased LoC activity due to acquisitions and business growth, increased LoC activity by 4x