TradeEdge-

Bankers Edge in Trade Finance

Object Edge Inc.

315 Lennon Lane

Walnut Creek, CA 94598

USA

TradeEdge

Banker’s Edge for Trade Finance

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TradeEdge Overview

With globalization and growing supply chain complexities, the risks of doing business has increased multi-fold. At the same time, the developed market place demands multi-faceted finance options and variations. Bankers need to equip themselves with the best enabling technology to thrive in this demanding environment.

TradeEdge is designed to process all aspects of Global Trade Finance for major international banking institutions. The solution allows for multi-channel, multi-lingual and multi-currency operations. TradeEdge is built using the latest technology platforms and has been architected to provide users with state-of-the-art capabilities, while ensuring easy integration with existing legacy ecosystems.

TradeEdge caters to all important trade finance vehicles, such as Letter of Credit, Standby Letter of Credit, Letter of Indemnity, Documentary Collections and Guarantees. It supports all possible banking roles in a trade transaction, such as issuing bank, advising bank, remitting bank etc. With increasing trade volumes and risk, issues such as syndication and split liability are becoming increasingly important. TradeEdge caters to all such trends that characterize modern trade finance operations.

TradeEdge provides self-service for all system users, ranging from the corporate requiring trade finance to any of the bank roles engaged in trade finance, including all internal roles, within these banks, such as the clerical staff, supervisors, managers etc. The users can transact their business, have access to their book of business, view their transaction history and create reports through a highly intuitive user interface

Self-service is facilitated by a responsive and flexible workflow that is configurable with seamless connectivity to a rich set of back office functionality. TradeEdge is built to allow straight through processing, with easy configuration to allow manual exits and approvals. TradeEdge supports all required protocols for trade finance communication such as Swift, SCORE and Bolero. With its robust architectural foundation, TradeEdge can integrate with any eco-system with relative ease.

TradeEdge is brought to you by Object Edge, an organization that prides itself on its architectural capabilities and its domain expertise in International Finance. Object Edge has worked with some of the largest global financial institutions – to name a few, Credit Suisse, Charles Schwab, Dresdner Bank, Banker’s Trust, and Aviva. TradeEdge encapsulates this wide-ranging experience and architectural excellence, through a set of functional framework components that ensures consistent robust delivery to the customer

One of the important advantages that a framework-based architecture offers is its futuristic capability. Changes in business for the most part are already envisioned while creating the framework and there is minimal impact on the core solution on account of such changes. For instance, there have been extensive modifications to Swift over the last decade, but all these modifications, could be accommodated with minor re-configurations.

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Banker’s Edge for Trade Finance

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Trade Edge – The Product

TradeEdge is captured at a high level in the diagram below:

At the heart of TradeEdge are a number of extremely well-crafted engine-level frameworks that are designed to be generic in address while still capturing the essence of the functionality for which they are created. The frameworks are usable across trade finance vehicles, i.e. LC, DC etc. They are briefly discussed below:

Unit of Work

All trade finance vehicles go through a lifecycle of events, for e.g. LC’s lifecycle stages include issuance, availment, settlement, amendment, free-form message, liquidation, etc. These lifecycle stages may be grouped into a unit of work, and the framework provides a common, robust manner of handling them. For example, a unit of work is transactionally approved, disapproved, validated, etc.

.

Advising /

Confirming Bank

Remitting

Bank

Collecting

Bank

Issuing

Bank

BuyerSeller

Contract

Purchase Order

Covering Bank Reimbursement Bank

Frameworks

LC, Standby LC, Guarantee, LOI

Documentary Collections

Issuing Bank

Remitting Bank

Syndication

Dis

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Split Liability

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LC-Issuance

LC

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Liquidation

Go

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Banker’s Edge for Trade Finance

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Validation

Validation is part of the basic repertoire of OE frameworks and is used by TradeEdge to validate its units of work. Validation rules are represented declaratively, associated with business objects at any level of granularity. A rule is triggered when a unit of work, which contains rule’s owner object, is validated.

Settlement

Settlement is one of the more complex activities, which is very critical in terms of ensuring that results are totally consistent and verifiable. Our settlement framework has successfully gone through millions of transaction cycles and is extremely robust.

Payment

Payment sounds like a simple transaction, but with the host of intermediary parties, especially in the event of syndication and split liability, the scenarios could get extremely complex. Our payment framework allows providing a graphical UI, to configure payment routes, with total ease thus enabling complex payment routing at a press of a button. The framework also includes integration adapters which can be easily configured to interface with any payment and currency conversion system.

Booking

Accounting and liability booking is another significant part that requires comprehensive address. There are a number of account types, such as Nostro, Vostro etc., besides myriad transactions, that require complex accounting entries, including contingency bookings, reversals and adjustments. With our framework, we can easily meet all these requirements and accommodate any changes in accounting procedures.

SWIFT /SCORE / BOLERO

The frameworks that we have built for these standards have withstood the test of time. As indicated earlier, there have been extensive modifications to Swift over the last decade, but all these modifications, could be accommodated with minor re-configurations.

Commissions and Charges

Our charge framework allows for a highly flexible model for commissions and charges; these can be fixed amounts in any currency, or based on percentages against fundamental quantities such as credit or collection amount. Calculated charges may be defined in multiple steps, with different rates per step. Charges and commissions are defined in external files, and may be customized by authorized administrators.

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Banker’s Edge for Trade Finance

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NLS

Our framework allows for multi-lingual operations with total ease.

Correspondence

Flexible, multi-lingual correspondence generation is one of the most important aspects of Trade Edge. Our framework allows representation in two modes: a semantic definition of a particular correspondence independent of any output method, and a structured form based on a particular messaging standard, such as SWIFT or Bolero.

Scheduling (Agenda)

The framework provides for automatic planning for activities to be carried out and manages calendar entries denoting tasks to be done or things that the user is waiting on before he can proceed with the next series of steps. TradeEdge automatically creates, updates and deletes agenda entries. The user can also create and delete custom agenda entries at any time.

Technology

TradeEdge is built on open and modern architecture, which allows for high flexibility, scalability and maintainability. The n-tier, browser based architecture, with rich interface allows both local and remote access. This makes it highly suitable for implementations, where the data center is centralized though end users could be geographically dispersed across regions or even continents.

TradeEdge is built on J2EE platform and supports both Linux and Windows environment. The browser-based user interfaces uses RIA (Rich Internet Application) and hence has all the typical controls of a normal UI. The application can connect to popular databases, such as Oracle or DB2.

Feature List

Some of the major features of TradeEdge are listed below:

• Scope

The solution caters to LC, Standby LC, Back-to-Back LC, Transfer LC, Documentary collections, and Revolving LC’s (cumulative & non-cumulative). The system supports seamless transition from import LC to back-to-back LC and transfer LC etc.

Any number of intermediary banks can be introduced and the solution can work with any bank role, i.e. advising bank, issuing bank, remitting bank etc.

The solution caters to all payment modes, i.e. sight, deferred payment, mixed payment Acceptance and Negotiation. Documents can be negotiated on trust basis or copy basis.

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Banker’s Edge for Trade Finance

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System supports multiple beneficiaries and split liabilities

LC supports multiple availments and partial shipments.

Syndication is integrated with transaction processing and could include non-bank partners.

The system supports purchase of claims of the beneficiary in the case of export LC and discounting in the case of deferred payment.

• Interface

Web-based user interface is available for all lifecycle transactions

Payment can be routed graphically using a very friendly interface

• Functional

Booking of commissions and charges is highly flexible and can be based on % age, time, stepped etc. Commissions can be separately charged for risk and processing.

System can be configured to pick up exchange rate online. Alternatively the user can manually enter dealer quote or use a middle rate (typically used for conversions with only internal relevance), based on transaction type.

System supports re-instatement of inactive accounts and closed transactions

Multiple levels of approval (four eye principle) can be configured based on transaction type

Multiple modes of payment can be used, i.e. through SWIFT, SIC (Swiss Interbank Clearing), ACH (Automated Clearing House) etc.

Accepts document value with tolerance and availment could exceed or fall short of LC value by the stipulated tolerance. If tolerance values are exceeded, approval flows could be configured as required

Complete support for all correspondences (Swift, Score, Bolero or free form)

• General

Automatic generation of agenda entries to identify next steps

Effective search of document through a host of parameters, e.g. applicant, beneficiary, bank, document number etc.

A set of representative use cases are integrated in the system to run business level regressions tests

Calculators are provided for a variety of purposes, e.g. Interest calculation, commission calculation etc.

Interest calculation can be configured to comply with German practice, French practice, or English practice

Rounding rules can be configured by currency