Automate Complex Transactions such as Trade Finance using Intelligent Automation

by Navin Gupta, on Jan 12, 2024 5:35:51 PM

Key takeaways

  • Intelligent Automation improves the speed and accuracy of complex transactions.
  • Trade Finance is one such complex process that involves heavy paper work in a value chain.
  • Intelligent Automation ensures collaboration among all stakeholders in a complex environment. 

Jumpstart automation using Intelligent Document Processing in paper-intensive environments

Some of the business sectors, such as Banking, Insurance, Financial Services, Manufacturing and Supply Chain involve highly complex transactions requiring fund inflows and outflows, credit assessment, discounting, guarantees, receivable factoring, underwriting, etc. These transactions involve multiple parties and high level of task complexities, mostly with heavy documentation in structured as well as unstructured formats. Above all, the businesses have a diverse set of clientele and they handle multiple client cases at any given point of time. Eventually, the processes become person-dependent and can hamper the process dependencies and workflows that are triggered both upstream and downstream. Intelligent Automation, can automate such complex transactions, for example Trade Finance, simplify, and democratize the processes, and hence reduce the turn-around-time from days to hours and from hours to minutes. 

Why do businesses require Trade Finance? 

Business requirements are varied in nature. The manufacturer, for instance, requires different raw materials to fulfill order commitments. Small and Medium Enterprises work on wafer thin margins and manufacture only on receiving orders. This just-in-time manufacturing creates a risk for both the seller and buyer and brings forth a high risk element especially across long-winding value chains. Businesses engage BFSI entities in these transactions from both the seller and buyer sides in order to get a confirmed delivery of cash receivables and goods, respectively. The seller’s bank waits for the letter of credit from the buyer’s bank and the buyer’s bank waits for the bill of lading to be presented along with other documents. The complex interchange of documents for selling and receiving raw material, parts, and goods makes it necessary to involve BFSI entities with their specialized function of Trade Finance in order to hedge the business risk. 

How does Intelligent Automation enable Trade Finance?

Trade Finance involves heavy paperwork that encompasses multiple parties, such as buyers, sellers, logistics service providers, and banks. Buyers and sellers work along complex value chains spread across the globe. They have to manage multiple raw materials and parts in an intricate balance between just-in-time and just-in-case manufacturing approaches while ensuring cash receivables and adequate liquidity. They have to manage and update details about each batch of incoming and outgoing consignment in the inventories, CRM systems, production inventories, etc. They have to update each F&A system with the details read from structured and unstructured documents for further processing and real-time synchronization, which is impossible when done manually. Intelligent Automation enables businesses and BFSI entities to handle the sale and procurement of different parts and consignments, including reading and processing tedious documentation, with high accuracy, ease, and speed. 

How does Intelligent Automation help businesses with Risk Management?

Businesses often have to deal with cash flow imbalance and liquidity crunch even while they enter the market for buying parts and raw materials. Similarly, the seller is not face-to-face with the buyer for having assured cash receivables. When banks act as intermediaries in such transactions, they have to be on a sure footing while issuing letter of credits or guarantees to their customers. The banks have to be sure that a transaction is not a money laundering case, so on and so forth. Banks have their networks with credit bureaus and AML enforcement organizations. However, checking for each customer case manually is next to impossible and if wrong information is released then it can lead to loss of face and reputation. 

Intelligent Automation connects both internal and external business systems in real-time. It also readily ingests paper-documents and brings them in the ambit of end-to-end automation. The technology helps banks to process each case with speed and high accuracy. In the business context, both buyers and sellers can mitigate the risk of non-shipment and non-payment by engaging in Trade Finance automations that link all concerned parties along with the state’s banking infrastructure, credit bureaus, and AML authorities. It also enables the buyer to buy-out time for actual payment and generating liquidity. It also secures the interest of the seller by assuring their cash receivables. 

How does Intelligent Automation empower Supply Chains?

Manufacturers, banks, and all buying and selling entities along a long value chain have to promptly abide by a takt rhythm to fulfill both just-in-time and just-in-case manufacturing approaches. Intelligent Automation unites all the entities on a digital platform. This technology platform enables the participating entities to onboard only credible entities and transact with them to build trustworthy supply chains in an aspiring economy. 

Simply put

Modern day businesses engage in complex cross geography transactions that involve heavy paper work. The processes eventually become person dependent with long turnaround time. Intelligent Automation automates such complex paper-intensive transactions involving multiple entities, reduces person dependences, and improves turnaround time from days to hours and hours to minutes.

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Topics:DigitalIntelligent Automation

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