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Digital trade finance tools continue to multiply

The pandemic has disrupted the entire global supply chain, highlighting the need for greater financial agility between buyers and suppliers. Oracle and Mitigram are the latest technology vendors to try to address this space.

First, with what it calls "componentised architecture" and built-in machine learning (ML), Oracle Banking Supply Chain Finance is designed to give corporate banks the flexibility needed to help their clients optimise working capital and reduce transaction risk.

"Supply chain financing is surpassing traditional trade financing; we saw an opportunity to bring to market a modern solution that can supercharge supply chain financing by leveraging tech innovation," said said Sonny Singh, executive vice president and general manager at Oracle Financial Services. "With Oracle Banking Supply Chain's fully digitised processing and real-time analytics, banks can help corporates further optimise working capital and liquidity in their supply chains."

Digitising the entire supply chain

By digitising the entire supply chain financing process, banks can now deliver timely alternative financing options and provide quicker approvals. Providing omni-channel portal access, corporate banks can provide their clients with real-time visibility into transactions. Oracle Banking Supply Chain Finance also provides real-time availability of funds and payment reconciliation through complete automation and straight-through processing (STP) of disbursement and liquidation processes.

Oracle says its solution can free banks from legacy monolithic systems by using component-based architecture to create relevant products and services. This allows corporate banks to meet their customers’ unique business and regulatory needs and cut down time-to-market. As such, banks can deliver increased value to corporates by optimising working capital across a wide variety of financing options, including reverse factoring, supplier finance, payable finance, receivable finance and more.

By leveraging ML, the system allows automatic data capture from scanned invoices, thereby reducing labour-intensive manual efforts. The key information from invoices is automatically extracted and processed for funding basis pre-configured financing parameters, allowing up to a 70% reduction in time and effort for finance processing and invoice management.

Oracle claims its solution can also do the following:

  • Automatically detect un-matched payments initiated by buyer or supplier and reconcile them against outstanding invoices or finances, reducing disruption in the supply chain.
  • Allow banks to set precise limits for various types of transactions through automated workflows with the flexibility to customise various finance or invoice management lifecycle processes.
  • Enable corporates to perform multiple transactions such as supplier onboarding, bulk uploads, and real-time monitoring, which results in improved business efficiency.
  • Easily integrate with any third-party applications through Rest APIs, resulting in rapid integration and ease of data consumption. This makes integration of the solution easier and brings seamless service to the corporate customer across Oracle and non-Oracle solutions.

Tinder for trade finance?

Elsewhere, Mitigram has released Open Market DISCOVERY; a new module that it says will further democratise trade finance by helping corporates, traders and banks to build global networks, access new relationships and originate new trade transactions.

Corporations can use Open Market DISCOVERY to find and invite new banks with matching credit appetite to price for trade finance contracts where their existing banking partners may not have capacity. Mitigram says its module will expand existing networks of relationships and help to ensure continuous business flows.

For financial institutions, the solution is bring pitched as a tool to drive new business and to build trade assets at no extra cost. Mitigram cites that, in July, The International Chamber of Commerce (ICC) released its 2020 Global Survey on Trade Finance, which found that 77% of bank respondents surveyed plan to transition trade finance to digital as a way to grow their businesses. 70% of respondents felt that it was their most urgent priority.

“For banks, Open Market DISCOVERY is an origination tool,” said Benoît Steinbach, managing director for Corporate Sales at Mitigram. “Banks are permitted to indicate their risk appetite within the platform, our automated Open Market DISCOVERY extension instantly indicates qualified and new business opportunities to banks that would otherwise find these transactions difficult to source.”

A soft launch of Open Market DISCOVERY to subscribers took place in mid-August. Mitigram says this immediately resulted in significant traffic, including a number of substantially-sized, multi-million dollar transactions.

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