Why trade finance is moving to the cloud

The development of cloud technology is opening the door for companies in the trade finance sector to move away from the inherent constraints of paper-based processes.

In Asia, this is particularly compelling, as importers don’t need to invest heavily in hardware and software to use cloud-based trade finance solutions – in some cases enabling them to leapfrog more costly and complex ERP tools.

As such, many operators in these less mature markets are very open to working in the cloud and receptive to the competitive opportunities it brings.

From a corporate perspective, SaaS-based multi-bank trade finance applications and exporter-led solutions are also extremely compelling in terms of cost and their potential to make essential processes more effective.

Typically, cloud-based trade finance solutions are far easier to deploy and use, especially when compared with more restrictive on-premise technologies. This in turn can enable corporate users to increase business efficiency and payment acceleration across their trading relationships. From a budget perspective, the fact that there is no requirement for large upfront investment means enterprises can use their op-ex rather than cap-ex budgets to fund the technology.

Electronic bill of lading (eBL) solutions are a good example of the flexibility cloud-based trade finance platforms offer for corporates and other trade finance users within the supply chain, making it possible to react quickly to immediate business demands.

For exporters, bill of lading documents are essential because they essentially act as one of the triggers for payment of the goods. Any delays in the presentation of the bill can therefore have an impact on the speed with which the payment is made.

In one instance, a last-minute change to the carrier scheduled to transport a multi-million dollar cargo of iron ore resulted in a requirement to enrol and on-board the new carrier as a Bolero user – just two hours before the ship was due to set sail. Were it not for the cloud-based aspect of the solution, it would not have been possible for the new carrier to issue the fresh bill of lading documentation prior to the ship’s departure.

Rather than forcing all parties to converge on a single platform, collaborative SaaS-based trade finance technology works in conjunction with corporate and carrier communities’ existing systems, reducing many of the barriers to entry and making it possible for more participants in the trade chain to make the most of the benefits it offers.

Users only need to connect once to gain common access to all other community members, while remaining completely insulated from a trade partner’s specific technology and business processes.

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2 Jul 2013, 2 p.m.

Tom -good article and nice example that shows benefits from a non typical industry. Cloud based solutions provide customers a new level of integration possibilities as most as-a-service software platforms are being built (or overhauled) to work in this model. If companies want to really grow think of a migration strategy to cloud based technologies instead of overhauls of existing legacy systems.


6 Jul 2013, 12:49 a.m.

MNX is in a prime position to capture the trade finance market. Advantages of MNX include the flexibility in workflow automation, advanced functionality to aggregate data processing, and client mandated automatically generated reports to gain new insight from ‘Big Data’. The trifecta of processes, automation and reports with minimal human interaction reduces costs, risk and error, and increases margins, efficiency and productivity.

A payment interface directly infused in the MNX platform where the lifecycle of a trade occurs not only generates savings, it also means it is possible to build an automated rating method to assess trading relationships and gain more leverage in the art of trading. MNX cloud platform is amicable to feature additions such as but not limited to a rating system, so firms investment in the solution never goes stale. MNX adapts and evolves to meet requirements and maximize innovation.

Existing Electronic bill of lading solutions are not flexible in how they respond to orders that change after the initial placement. It is difficult to signal and revise a purchase order once the initial trade is engaged. MNX provides the flexibility to change orders under terms. Once a change request is made, MNX automatically notifies all parties involved immediately to re-approve the trade, or re-negotiate.

MNX eliminates billing procedure bottlenecks by installing a payment interface and an automated billing module directly into the trading platform. The emphasis here is totality of data, which pivots the billing paradigm from time consuming and disorganized to immediate and 100% accurate.

MNX compliments existing technology investments by focusing on the trading behaviors and automating the back end work that goes hand in hand with trading. MNX offers a truly end-to-end solution by adapting to each business process a firm requires, and most of the time integrating or communicating with additional technology.

Once a Virtual Partnership is approved on MNX, the company is able to realize benefits such as potential group purchasing opportunities with their new partner, potential trading opportunities, file sharing, and peer-to-peer social networking. Although a Virtual Partnership engages the two companies and creates more opportunity via the Network Effect phenomenon, company’s data and processes remain secure and confidential. Each company remains in their own Virtual Private Network.

Thank you for reading, check us out at www.mnxconnect.com!