Presentation title by s8J162lP


									Trade for Corporates
- a practical case study

Metsä Finance, Nordea and GlobalTrade Corporation work
together to streamline data exchange for export L/Cs from
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
                                                                                   Exporter’s                    4
                                           bank(s)                                  bank(s)

 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)                                         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
• 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
• 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        Daily support      System support
   credits and        to business         and system
  documentary             units          development

   Business             Metsä               Metsä         Metsä
     Units             Finance             Finance       Finance

                            Common principles
         Metsäliitto: Electronic L/C handling

                            3) Electronic Advice/MT798 message
                                                                                Metsä Group
                                                                                Financial Services
                                                                                 @Global Trade
 2) L/C advice                             5) Scanned documents
    SWIFT/MT700                               checked by Nordea in
                                              Global Trade system

                                                                                4) L/C process managed
             Issuing-Bank                                                          in @GlobalTrade by CSC
                                   6) Cover letter from

1) Opening of L/C

                            7) Original documents with
                            Nordea´s cover letter                             Metsäliitto group
                Customer                                                  Customer Service Center
Trade for Corporates – in practice…

How has Nordea met Metsä Finance’s

Claus Asbjörn Stehr
Head of Trade and Project Finance, Nordea

Facts about Nordea

Customers                                 Other key figures
  • 700 thousand active corporate           • Capitalization EUR 30bn
    customers                               • Total assets EUR 571bn
  • 10 million household customers of       • 36,500 employees
    which 7.5 million are in active
    customer programs
                                          Market shares corporate lending
Coverage                                    • Finland:   37%

  • Leading bank in the Nordic & Baltic     • Denmark:   21%
    Sea region                              • Norway:    16%
  • 1,400 branches                          • Sweden:    14%

  • 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
                                                         Metsä Group
                                                         Financial Services
• Existing customer expectations for            Lite
                                                         @Global Trade
  new innovative solutions
• 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

Trade for Corporates – in practice…

How did GTC make it happen?

Nick Pachnev
CTO, GlobalTrade Corporation

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           Best Independent Trade
      10th Fastest            Platform/System Provider
      Growing                 2005, 2006, and 2007 by
      Company by              Euromoney’s Trade
      Profit Magazine                                    Full Compliance with the 2010 criteria for
                              Finance Magazine
                                                         the SWIFT Corporates – Trade Finance
  Export LC advice through SWIFT



                                                                 Export LC System

• 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
         low volume users through        SWIFT
                                                   Financial Services
         the Internet. The application
         is installed internally                    @Global Trade

         @GlobalTrade Ucon is a desktop application used for
         transferring files (SWIFT messages, ERP data, trade
@GT      documents) from corporate internal network to remotely
Ucon     hosted @GlobalTrade systems through Internet.
         The application is installed internally
         @GlobalTrade Export LC System is a web-based multi-
         bank 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
                                                     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

For more information please visit:
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?

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