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Banks to gain access to Demica trade finance platform

Demica, the working capital solutions specialist whose trade receivables platform is already used by HSBC and JP Morgan, has unveiled a new portal that will broaden access to other banks, which will be able to use its transaction management tools and set up deals directly.

The functions were previously only available through Demica’s internal systems, reports Global Trade Review.

By opening up access to the platform, which launched in 2002, more banks can participate and automate their trade receivables programmes, Corporate clients use it to upload their unpaid invoices, which banks can assess to finance the bills that meet their particular risk exposure thresholds. Demica currently handles the client onboarding process, as well as uploading the risk criteria of banks looking to offer clients early payment on invoices.

Upcoming changes

GTR reports that from the end of Q3, banks can get a login for the Demica platform that enables them to set up their own transactions with corporates through new, streamlined dashboards and upload term sheets directly. The platform will then automate the bank’s finance programme and generate related reports and payment messages.

Banks will also be able to ‘white label’ the portal by incorporating it into their own systems and add their own branding to provide a more personalised user experience for users. Five to seven banks are expected to white label the solution in the coming years, Demica’s CEO Matt Wreford told GTR.

The company says that by removing itself from the transaction it will allow banks to increase the volume of deals completed on the platform. It currently reports having US$9 billion of assets under administration for its receivables pool, with between three million and four million invoices financed daily. It expects this figure to grow significantly once the portal is live.

The new online dashboards will enable corporate treasurers and internal bank users to view real time performance of a receivables finance transaction and underlying portfolio data down to an invoice level.

Demica says this enhanced reporting capability will help banks meet the European Securities and Markets Authority’s (ESMA) regulatory requirements for banks on securitisation reporting, which requires an invoice-level breakdown of transactions. By being compliant, banks will receive significantly lower regulatory capital treatment.

The company adds that the new portal is now being piloted by one unnamed bank and refined by its own development teams.

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