2. TradeEdge
Banker’s Edge for Trade Finance
TradeEdge Overview
With globalization and growing supply chain complexities, the risks of doing business has
increased multi-fold. At the same time, the developed market place demands multi-faceted
finance options and variations. Bankers need to equip themselves with the best enabling
technology to thrive in this demanding environment.
TradeEdge is designed to process all aspects of Global Trade Finance for major international
banking institutions. The solution allows for multi-channel, multi-lingual and multi-currency
operations. TradeEdge is built using the latest technology platforms and has been architected to
provide users with state-of-the-art capabilities, while ensuring easy integration with existing
legacy ecosystems.
TradeEdge caters to all important trade finance vehicles, such as Letter of Credit, Standby Letter
of Credit, Letter of Indemnity, Documentary Collections and Guarantees. It supports all possible
banking roles in a trade transaction, such as issuing bank, advising bank, remitting bank etc.
With increasing trade volumes and risk, issues such as syndication and split liability are
becoming increasingly important. TradeEdge caters to all such trends that characterize modern
trade finance operations.
TradeEdge provides self-service for all system users, ranging from the corporate requiring trade
finance to any of the bank roles engaged in trade finance, including all internal roles, within
these banks, such as the clerical staff, supervisors, managers etc. The users can transact their
business, have access to their book of business, view their transaction history and create reports
through a highly intuitive user interface
Self-service is facilitated by a responsive and flexible workflow that is configurable with
seamless connectivity to a rich set of back office functionality. TradeEdge is built to allow
straight through processing, with easy configuration to allow manual exits and approvals.
TradeEdge supports all required protocols for trade finance communication such as Swift, SCORE
and Bolero. With its robust architectural foundation, TradeEdge can integrate with any eco-
system with relative ease.
TradeEdge is brought to you by Object Edge, an organization that prides itself on its
architectural capabilities and its domain expertise in International Finance. Object Edge has
worked with some of the largest global financial institutions – to name a few, Credit Suisse,
Charles Schwab, Dresdner Bank, Banker’s Trust, and Aviva. TradeEdge encapsulates this wide-
ranging experience and architectural excellence, through a set of functional framework
components that ensures consistent robust delivery to the customer
One of the important advantages that a framework-based architecture offers is its futuristic
capability. Changes in business for the most part are already envisioned while creating the
framework and there is minimal impact on the core solution on account of such changes. For
instance, there have been extensive modifications to Swift over the last decade, but all these
modifications, could be accommodated with minor re-configurations.
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3. TradeEdge
Banker’s Edge for Trade Finance
Trade Edge – The Product
TradeEdge is captured at a high level in the diagram below:
Contract
Purchase Order
LC-Issuance
Seller Buyer
Syndication
Issuing Bank
LC, Standby LC, Guarantee, LOI
Advising /
Issuing
Purchase of Claim
Confirming Bank
LC-Availment
Goods Release
Bank
Discounting
Frameworks
Documentary Collections
Remitting Bank
Collecting
Remitting Bank
Bank Split Liability
Liquidation
Covering Bank Reimbursement Bank
At the heart of TradeEdge are a number of extremely well-crafted engine-level frameworks that
are designed to be generic in address while still capturing the essence of the functionality for
which they are created. The frameworks are usable across trade finance vehicles, i.e. LC, DC etc.
They are briefly discussed below:
Unit of Work
All trade finance vehicles go through a lifecycle of events, for e.g. LC’s lifecycle stages include
issuance, availment, settlement, amendment, free-form message, liquidation, etc. These
lifecycle stages may be grouped into a unit of work, and the framework provides a common,
robust manner of handling them. For example, a unit of work is transactionally approved,
disapproved, validated, etc.
.
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4. TradeEdge
Banker’s Edge for Trade Finance
Validation
Validation is part of the basic repertoire of OE frameworks and is used by TradeEdge to validate
its units of work. Validation rules are represented declaratively, associated with business objects
at any level of granularity. A rule is triggered when a unit of work, which contains rule’s owner
object, is validated.
Settlement
Settlement is one of the more complex activities, which is very critical in terms of ensuring that
results are totally consistent and verifiable. Our settlement framework has successfully gone
through millions of transaction cycles and is extremely robust.
Payment
Payment sounds like a simple transaction, but with the host of intermediary parties, especially in
the event of syndication and split liability, the scenarios could get extremely complex. Our
payment framework allows providing a graphical UI, to configure payment routes, with total
ease thus enabling complex payment routing at a press of a button. The framework also
includes integration adapters which can be easily configured to interface with any payment and
currency conversion system.
Booking
Accounting and liability booking is another significant part that requires comprehensive address.
There are a number of account types, such as Nostro, Vostro etc., besides myriad transactions,
that require complex accounting entries, including contingency bookings, reversals and
adjustments. With our framework, we can easily meet all these requirements and accommodate
any changes in accounting procedures.
SWIFT /SCORE / BOLERO
The frameworks that we have built for these standards have withstood the test of time. As
indicated earlier, there have been extensive modifications to Swift over the last decade, but all
these modifications, could be accommodated with minor re-configurations.
Commissions and Charges
Our charge framework allows for a highly flexible model for commissions and charges; these can
be fixed amounts in any currency, or based on percentages against fundamental quantities such
as credit or collection amount. Calculated charges may be defined in multiple steps, with
different rates per step. Charges and commissions are defined in external files, and may be
customized by authorized administrators.
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5. TradeEdge
Banker’s Edge for Trade Finance
NLS
Our framework allows for multi-lingual operations with total ease.
Correspondence
Flexible, multi-lingual correspondence generation is one of the most important aspects of Trade
Edge. Our framework allows representation in two modes: a semantic definition of a particular
correspondence independent of any output method, and a structured form based on a
particular messaging standard, such as SWIFT or Bolero.
Scheduling (Agenda)
The framework provides for automatic planning for activities to be carried out and manages
calendar entries denoting tasks to be done or things that the user is waiting on before he can
proceed with the next series of steps. TradeEdge automatically creates, updates and deletes
agenda entries. The user can also create and delete custom agenda entries at any time.
Technology
TradeEdge is built on open and modern architecture, which allows for high flexibility, scalability
and maintainability. The n-tier, browser based architecture, with rich interface allows both local
and remote access. This makes it highly suitable for implementations, where the data center is
centralized though end users could be geographically dispersed across regions or even
continents.
TradeEdge is built on J2EE platform and supports both Linux and Windows environment. The
browser-based user interfaces uses RIA (Rich Internet Application) and hence has all the typical
controls of a normal UI. The application can connect to popular databases, such as Oracle or
DB2.
Feature List
Some of the major features of TradeEdge are listed below:
• Scope
The solution caters to LC, Standby LC, Back-to-Back LC, Transfer LC, Documentary
collections, and Revolving LC’s (cumulative & non-cumulative). The system supports
seamless transition from import LC to back-to-back LC and transfer LC etc.
Any number of intermediary banks can be introduced and the solution can work with any
bank role, i.e. advising bank, issuing bank, remitting bank etc.
The solution caters to all payment modes, i.e. sight, deferred payment, mixed payment
Acceptance and Negotiation. Documents can be negotiated on trust basis or copy basis.
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6. TradeEdge
Banker’s Edge for Trade Finance
System supports multiple beneficiaries and split liabilities
LC supports multiple availments and partial shipments.
Syndication is integrated with transaction processing and could include non-bank
partners.
The system supports purchase of claims of the beneficiary in the case of export LC and
discounting in the case of deferred payment.
• Interface
Web-based user interface is available for all lifecycle transactions
Payment can be routed graphically using a very friendly interface
• Functional
Booking of commissions and charges is highly flexible and can be based on % age, time,
stepped etc. Commissions can be separately charged for risk and processing.
System can be configured to pick up exchange rate online. Alternatively the user can
manually enter dealer quote or use a middle rate (typically used for conversions with
only internal relevance), based on transaction type.
System supports re-instatement of inactive accounts and closed transactions
Multiple levels of approval (four eye principle) can be configured based on transaction
type
Multiple modes of payment can be used, i.e. through SWIFT, SIC (Swiss Interbank
Clearing), ACH (Automated Clearing House) etc.
Accepts document value with tolerance and availment could exceed or fall short of LC
value by the stipulated tolerance. If tolerance values are exceeded, approval flows could
be configured as required
Complete support for all correspondences (Swift, Score, Bolero or free form)
• General
Automatic generation of agenda entries to identify next steps
Effective search of document through a host of parameters, e.g. applicant, beneficiary,
bank, document number etc.
A set of representative use cases are integrated in the system to run business level
regressions tests
Calculators are provided for a variety of purposes, e.g. Interest calculation, commission
calculation etc.
Interest calculation can be configured to comply with German practice, French practice,
or English practice
Rounding rules can be configured by currency
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