Andrew Raymond, CEO

Managing credit lines with multiple banks involves huge amounts of time for corporate treasuries securing and monitoring finance for trade transactions.

They spend long hours accessing different portals with varying user interfaces and functions to apply for and manage the same trade finance products. Assuming that is, that there are even portals to access. Applying for and monitoring letters of credit and bank guarantees is very difficult when logging in and out of different portals. Despite the increase in digitisation, some banks are decommissioning the tools that facilitate bank guarantee management, complicating matters further.

Consequently, large importers and exporters find managing hundreds or thousands of letters of credit (LCs), standby LCs or bank guarantees every year to be a huge challenge. With the advent of the Covid-19 pandemic these issues have multiplied, especially as paper trade documentation continues to drag down efficiency.

Benefit from banks’ advancing trade digitisation

As a starting point in their journey to much greater efficiency, treasuries need to drop the use of paper in transactions. The newly-published 2020 International Chamber of Commerce Global Survey On Trade Finance shows that despite increasing trade digitisation among banks, many corporates still rely on slow and cumbersome paper-based processes. Yet just 15 per cent of the banks surveyed said LCs must be in paper form in the jurisdictions in which they operate.

But attitudes are changing; the Covid-19 restrictions on physical movement demonstrated the financial supply chain’s vulnerability when paper letters of credit or guarantees are held up by the same restrictions as cargoes, even though the documents travel separately from the shipment.

A comprehensive solution for credit lines

To remove all these hurdles to efficiency, corporates need a more far-reaching digital solution that provides a single, consolidated view of their credit lines, letters of credit and guarantees for every bank they deal with.

Treasuries need to shift to an online multi-banking trade finance solution such as Bolero’s advanced Galileo platform in order to avail themselves of the security and efficiency that flows from the digitisation of letters of credit and guarantees.

Galileo is packed with user-friendly functionality and has been designed to deliver immensely greater visibility and control without any compromise on security. From a single interface, treasury departments can manage and edit letters of credit, bank guarantees and electronic presentations, as well as benefit from the full use of Bolero’s signature electronic bills of lading.

For large, multi-national corporates with subsidiaries or treasuries distributed in different global regions, Galileo also provides greater visibility across borders and organisational boundaries, providing efficiencies at scale in use of credit lines and working capital.

Increasing visibility and control

The case for linking into the growing digital banking eco-system through a single interface is becoming more convincing by the day. As the world continues to endure the disruption to normal operations caused by the pandemic, the advantages of an easily accessible, single, secure interface with multiple banks become obvious.

A cloud-based platform such as Galileo underpins business continuity, providing fast and secure access to LCs, guarantees, ensuring their continued supervision. This is highly advantageous when remote working is increasing substantially, both as a response to Covid-19 and as a business strategy. Tracking, audit trails and encryption built into Galileo also reduce the opportunities for fraud that are especially a problem when paper documents are employed.

The adoption of multi-banking trade finance solutions will allow corporates to manage and optimise their LCs, guarantees and credit line relationships with banks with an ease and efficiency that has previously been impossible and is now very necessary.