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Eurofinance Monaco: SWIFT’s presentation on the emerging Bank Payment Obligation trade finance instr

Marie-Christine Diaz, SWIFT in her excellent and comprehensive presentation 'BPO - a corporate perspect on supply chain finance' described how the limitations of the existing instruments payment and risk mitigation tools could be overcome by using the BPO, an ICC standards based instrument:

Source & Copyright©2012 - SWIFT

Marie-Christine showed how BPO offers the best cost v. risk performance:

Source & Copyright©2012 - SWIFT

The audience were well aware of the limitations of the existing trade payment and risk mitigation tools. They could see the benefits of the BPO, but although there are an impressive number of banks (40 banks, including 25 of the largest, as at 12 September) and several well known companies have used BPOs, they seemed to think that problem is going to be:

  • how banks are going to extend their financing services using the BPO
  • the learning curve for corporates to understand how to enter the relevant data required for a BPO, etc
  • the time it will take for general market acceptance to be achieved.

This is an important trade finance initiative that really is a 'win-win' for buyers, suppliers and banks (and SWIFT). But that does not necessarily mean it will be successful, BPO will need supporting and promoting by everyone, including you.

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This item appears in the following sections:
Trade & FSC Management
Trade Finance
Trade Transaction & Payment Services