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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 MT700 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 MT798s 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 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 Daily support System support Process credits and to business and system ownership documentary units development collections Business Metsä Metsä Metsä Units Finance Finance Finance Common principles Metsäliitto: Electronic L/C handling 3) Electronic Advice/MT798 message Metsä Group SWIFT Financial Services Alliance Lite @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 Nordea 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 requirements? Claus Asbjörn Stehr Head of Trade and Project Finance, Nordea 11 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% 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 Metsä Group SWIFT Financial Services Alliance • 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 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 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 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 low volume users through SWIFT Financial Services Alliance the Internet. The application Lite 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 firstname.lastname@example.org 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: email@example.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?
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