Tom Rahder, Vice President, Product Strategy at Bolero, discusses the benefits and future of electronic letters of credit.
December 05, 2013 | Esther TanBroken supply chains can, over time, lead to large amounts of inventories being held up, resulting in a waste of time and capital. Importers often experience the delay in receiving goods because of the slow arrival of documentation and they in turn refrain from releasing money to the exporters. Bolero - which actually stands for Bill Of Lading Electronic Registry Organization - was originally set up to perform electronic presentation of the bill of lading. Its electronic letter of credit (eLC) presentation capability also aids it to tackle the basic problem of matching the arrival of goods and documentation from the customs and logistic perspective and most importantly, the banking perspective.
According to Tom Rahder, Vice president, Product strategy at Bolero, eLC volume at the moment accounts for less than 1% of overall trade in 2013. This figure has increased from 0.01% less than a year ago. However, he pointed out that eLCs should instead be measured in terms of value, as the main sectors utilising eLCs are the big players in metals, mining and chemical, where trade flows range up to $25 billion annually.
Accuracy, the big issue
Large multinationals all face one similar issue - having one too many panel banks from the LC advice side. Most amendment processes are very manual with the use of multiple post-it notes. Complexity in these amendments can be removed through digitalising the process, reducing the highly probable human errors and trade cycle time by seven days, allowing companies to reap the financial benefits quicker.
“The missing link is the electronic movement of the documents. It is just as important to open accounts, documentary collection or other more complex trade policies,” said Rahder.
Many exporters demand banks to have a branch near their processing centres so that the documents can be presented physically. However, with electronic presentation, banks can win businesses without incu...
Categories:
Channels, Payments, Technology & Operations, Transaction BankingKeywords:URBPO, ICC, ELC, EBL, Bolero, Tom Rahder, Supply Chain
Tom Rahder, Vice President, Product Strategy at Bolero, discusses the benefits and future of electronic letters of credit.
December 05, 2013 | Esther TanBroken supply chains can, over time, lead to large amounts of inventories being held up, resulting in a waste of time and capital. Importers often experience the delay in receiving goods because of the slow arrival of documentation and they in turn refrain from releasing money to the exporters. Bolero - which actually stands for Bill Of Lading Electronic Registry Organization - was originally set up to perform electronic presentation of the bill of lading. Its electronic letter of credit (eLC) presentation capability also aids it to tackle the basic problem of matching the arrival of goods and documentation from the customs and logistic perspective and most importantly, the banking perspective.
According to Tom Rahder, Vice president, Product strategy at Bolero, eLC volume at the moment accounts for less than 1% of overall trade in 2013. This figure has increased from 0.01% less than a year ago. However, he pointed out that eLCs should instead be measured in terms of value, as the main sectors utilising eLCs are the big players in metals, mining and chemical, where trade flows range up to $25 billion annually.
Accuracy, the big issue
Large multinationals all face one similar issue - having one too many panel banks from the LC advice side. Most amendment processes are very manual with the use of multiple post-it notes. Complexity in these amendments can be removed through digitalising the process, reducing the highly probable human errors and trade cycle time by seven days, allowing companies to reap the financial benefits quicker.
“The missing link is the electronic movement of the documents. It is just as important to open accounts, documentary collection or other more complex trade policies,” said Rahder.
Many exporters demand banks to have a branch near their processing centres so that the documents can be presented physically. However, with electronic presentation, banks can win businesses without incu...
Categories:
Channels, Payments, Technology & Operations, Transaction BankingKeywords:URBPO, ICC, ELC, EBL, Bolero, Tom Rahder, Supply Chain
