In the era of electronic documentation, JPMorgan is leading the move towards seamless and paperless trade finance services. A leader in classical trade finance and e-commerce, the bank has revolutionized its trade finance products to offer a number of different electronic platforms to clients that streamline the trade process and significantly reduce trade cycles.
TradeDoc is one such platform. The product offering allows traders to initiate, monitor and reconcile shipping documentation using the convenience of the internet. Clients can compose commercial invoices, packing lists and beneficiary certificates using the technology. More recently, bills of lading have been added to the list of documents that can be handled electronically, a significant breakthrough for a process that was once arduous and time consuming.
TradeDoc has been a success for importers and exporters who use the service to handle their Asian trade operations, says Paul Simpson, including German company BASF, one of the bank's well-known multinational clients.
"For exporters TradeDoc considerably reduces the time it takes to get paid, while for the importer there is a reduction in the time it takes to get legal title to the goods once they have arrived in port, " according to Bruce Alter, Asia Market Manager. Alter adds: "Asia has been a key testing ground for many of the bank's electronic initiatives. While these products are global in nature, they do tend to take shape in Asia where our clients tend to be more technology ready and are quite keen to improve trade turnaround times."
JPMorgan's regional trade product specialist, Idana Salim, says an example of JPMorgan's innovation in the area of paperless trade is its cooperation with the Singapore agencies to develop new electronic documents. "JPMorgan has been invited to give feedback to the Singapore International Chamber of Commerce ("SICC") on the latter's project to develop an electronic form of the Certificate of Origin," says Salim. "As one of the major trade finance banks recognised in the region as a leader in the electronic document front, the SICC is keen to get out input."
The Bank has also launched another platform, a platform with direct linkage into TradeDoc: Trade Information Exchange or TIE. Clients that benefit from JPMorgan's TIE platform are the large corporates as well as financial institutions. "We are now talking to these financial institutions about licensing this technology on an ASP basis," says Simpson. "We want to provide them with the payment and technology solutions that help them to support their clients."
Another product which is a top priority for the JPMorgan trade group is the web-based Trade Origination Process or TOP. The bank's clients use the system to submit applications for letters of credit (LC). The process is completely electronic and includes a template function which minimizes the work of LC initiation by storing a copy of the data that regularly appears on the documents and eliminating the need to re-key information. TOP is popular with the bank's large US retailer clients such as Phillips Van Heusen which ship large quantities of stock from Asian manufacturing hubs. The LCs are initiated in Asia where the companies' suppliers reside.
The secret to providing these online services is ensuring that clients are comfortable with the level of security provided, says Paul Simpson, global head - Trade Services for JPMorgan. "We have invested a lot of time and effort to ensure the security of the documentation," says Simpson. "Data files can be originated in several different formats and attached to a document workflow management delivery system that has 128 bit encryption security, the highest level of security available."
The latest campaign in JPMorgan's paperless trade drive is the implementation of the worldwide electronic trade system called Bolero. An initiative supported by a grouping of the world's largest logistics companies and trade finance banks, Bolero will get rid of trade inefficiencies by allowing documents and data to be exchanged and reconciled online between all parties in the trade chain. For the past eight months JPMorgan has run a successful pilot of the program with one of its largest multinational clients, FNC, the Colombian coffee association. "We have rolled out the platform for FNC in several markets around the world and, in some cases, it has reduced the trade cycle from 18 to 3 days," says Simpson.
JPMorgan is now in the process of signing deals with financial institutions in Asia that will allow them to private label the Bolero product. Asian banks that are not full members of Bolero will be able to offer Bolero services to their clients through an exclusive link with JPMorgan.
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