Transforming Trade Finance - Global challenges and a new way forward

Transforming trade finance Global challenges and a new way forward

Name SurnameJob title

3© Misys 2014 9 April 2023

The big picture – rising demand for working capital finance

Increased global regulation and compliance demands

Increased expectations/sophistication of

commercial clients

Increased importance of liquidity management

Growth in demand for open account assistance and supply chain finance

Growth in international trade and South-South shift

Growth in Small to Medium Enterprises (SMEs)

Fragmented processing and service coverage from banks

4© Misys 2014 9 April 2023

There are opportunities but also key challenges

Information islands and varying product coverage globally mean no consolidated view across the business to inform decisions

Clients expect standard international service levels – hard with multiple processing centres, service channels and products across countries

Rising operating costs and limited ability to quickly adapt and broaden revenue streams into open account or working capital finance services

Caused by an inability to prioritise and proactively manage work for clients, based on service level agreements

Struggle to expand quickly to gain market share through innovative and competitive product offerings due to legacy operations and fragmented channels

No single view of business

Inconsistent international delivery

High costs, low margins and revenue decline

Client attrition

Inability to expand

5© Misys 2014 9 April 2023

What these challenges mean to you

No single view of business

Inconsistent international delivery

High costs, low margins, revenue decline

Client attrition Inability to expand

Fragmented data

Poor SLA management

Heightened group risk

Meeting local requirements

High operating costs

High FTE rate

Reputational impact

Less impactful value proposition for international corporates

Multi-country operational silos

Lack of standardised global processing baseline

Inconsistent product/service delivery

Operational risk Competition and regulation

6© Misys 2014 9 April 2023

Failure to address the challenges has a significant negative impact

Margin, cost and revenue pressure

No single view

Inconsistent global service & operations

Constrained growth

Loss of clients

Market share Revenue Brand image

Reduced ability to win new business X Failure to meet KPIs for growth

X Fail to improve global business operationsCustomer attrition

Increased operational errors and non-compliance

X Fail to meet risk KPIsX Unable to follow clients into new markets

Higher costs of local IT and staff Customer attrition Less competitive

Profitable, scalable growthX Failure to meet KPIs for growthCustomer attrition

Decreased opportunity to drive new revenue streams Customer acquisition

Brand image Client share of wallet

Declining revenues Ability to win new business

Industry commentators also reinforce these barriers to growth

Key for any centralised processing function is to free up the client facing elements of the organisation to deliver quality customer service.

Gareth Watts – Trade Product Manager, Bank of America

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7© Misys 2014 9 April 2023

A major challenge for the industry is the lack of data timely and detailed enough to understand and monitor trade finance metrics.

Thierry Senechal – Senior Policy Manager, ICC Banking Commission

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“Banks are seeking a return on their investment in new trade and SCF products. We see them turning to partners who have the reach, technology and the experience to help unleash the nascent potential in their trade finance business.

Enrico Camerinelli – Senior Analyst, Aite Group

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“

Implementing trade transactions such as L/Cs, should be the same around the world but when you hit the road you often find that local variations in regulation such as tax rules, may be very different from location to location.

Gareth Watts – Trade Product Manager, Bank of America

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“

The biggest driver will be the increasing need for advanced infrastructure systems, which will enable a wider spectrum of trade finance capabilities.

ICC Global Trade and Finance Survey 2013

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8© Misys 2014 9 April 2023

Banks are investing in their trade finance business to capture growth

Major drivers of spending are the international expansion strategies of banks, supply chain financing, and cash management - Celent

69%

of banks cited operational inefficiency, disparate

systems and low STP

45%

are dissatisfied with level of cash visibility across their banking

relationships 8%

CAGR

Est. revenues from transaction banking rising to $1.1trillion

by 202249%

plan to adopt or replace new trade finance systems within 3 years

Boston Consulting Group

Eurofinance corporate treasury survey

Finextra/Misys GTB trends CEB Towergroup

9© Misys 2014 9 April 2023

You too can adapt to unlock the potential of international trade services

Expand and compete effectively in both local and global markets without compromising operational control or increasing operational costs

A single view of businessfor better informed decisions

Centralised workflow control to expand the business

Drive margin and STP improvement to boost revenues

Consistent global SLAs and modern channels to win on service

A global operating model to expand - think local, act global

Focus on client self help and service level differentiation to meet and anticipate client demands for products and services

Increase volumes and revenues from corporate banking, driving STP efficiencies without increasing FTE/operational costs

Deliver consistent trade and working capital services with multi-regional processing - without losing local service or product flexibility

Gain real time views across operations without major investment in monitoring tools and optimise transaction throughput for clients

10© Misys 2014 9 April 2023

Globalisation

By transitioning from multiple independent regional silos...

No single view

Disjointedservice

High TCO

No STP, no SLA

Poor scalability

What’s the value for major corporate or SME clients?

11© Misys 2014 9 April 2023

To a proven multi-regional processing approach...

Centralised processing. Single global view. Global baseline.

Regional Hub e.g.

NAM

Regional Hub e.g.

EUR

Regional Hub e.g.

APAC

Become the ‘go-to’ bank for international corporates and SMEs

Centralised SLA management

Introduce global/regional teams and roles

Consistency of service

Pass efficiency on to clients – competitive edge

12© Misys 2014 9 April 2023

Globalisation

With an international, multi-channel unified corporate portal...

13© Misys 2014 9 April 2023

Globalisation

...that is fully integrated with a global trade finance back office

14© Misys 2014 9 April 2023

That drives global growth with service leadership and working capital services – while maintaining scalability and reducing cost

Flexible workflow customisation to implement your target operating

model

Centralised global SLA dashboards

Global/regional processing reduce IT (25%) and staff costs

(80%+)

Model bank proven to reduce time to market by 60%

A global sales tool – has helped grow corporate banking revenues by >89%

The deepest, integrated portal functionality for trade, cash and FX

Bank and client side self-service

FusionBanking Trade Innovation

FusionBanking Corporate Channels

Integration with a unified digital corporate channels

Dedicated mobile apps for tradeand cash

Pre-packaged and customisable workflows for the broadest range of

trade and WCF products

15

And delivers a new way forward with a focus on global service

An integrated, standardised platform capable of operating across multiple regions / countries

Team & role based workflow and security with virtual teams

Work flows automatically designated to locations:

• Central processing hubs• Specialist units

Multiple back office services and integration points

Enables local offices to act locally. Frees them up to ‘manage the customers’

Scalability, usability and performance

Cross zone SLA dashboard for all work in progress:

• Premium customers / Premium service

15© Misys 2014 9 April 2023

16© Misys 2014 9 April 2023

Delivered with more certainty and speed via Misys MAPs and Models

Build once, deploy many times…

E.g. 80% delivered using proven process and application models based on 200+ implementations

…leaving 20% customized via the toolkit for each regional deployment

The traditional requirements-led approach... or the Misys model and process led approach?

• Poor benefits realisation and poor scope control • A clear view of the end-to-end process to improve scope management

• Cost and timescale over-run and no stakeholder alignment • A baseline standard process model to speed global implementation

• Non-standard - difficult to extend and maintain • Powerful workflow customization to drive local compliance and product delivery needs

17© Misys 2014 9 April 2023

Increase profitability, reduce risk and become more competitive

Increased growth and expansion

Increased delivery consistency

Increased revenue; lower costs

Increased transparency of business

Increased client acquisition

New revenue streams

Reduce product time to market

Increase agility

Scalable operations & higher volumes

Consistent user experience

Reduce sales costs

Extended operating hours

Lower TCO

Improved brand image

Retain profitable business

Increase cross-sell

Increase revenue

Improve operating margins

Central control

Proactive decision making

Reduce operational risk

Reduce regulatory risk

Deeper client relationships

Greater client satisfaction

Brand image

Service control client by client

18© Misys 2014 9 April 2023

Effectively solve today’s challenges and prepare for the future

No single view of business

Client attrition

Inconsistent international delivery

High costs, low margins, revenue decline

Inability to expand

Cannot meet service level expectations

Loss of market share and revenue

Lose out to the competition

Fail to maintain relevance in trade finance

Fail to follow clients into new markets

Think local, act global

Differentiate with service leadership

Rapid time to market with model bank

Total workflow control - your target

operating model

Seize new opportunities in trade and supply

chain finance

Become the go-to bank for multinational clients

FusionBanking trade services facts

19© Misys 2014 9 April 2023

Solution has helped to increase client corporate banking revenues by as much as

• Best software provider for trade finance - GTR, Trade Finance and TFR

• Best in Class ‘Corporate Client Service’ – CEB TowerGroup

Business case analysis demonstrates ROI in trade finance within 3 years and a reduction of IT and operational costs by as much as

80%

Fusion Banking Trade Innovation helps customers increase trade volumes by

50% or more

89%

20© Misys 2014 9 April 2023