Agenda

1 Cash Management Challenges & Solutions

2 Working Capital Challenges & Solutions

3 Trade Finance Challenges & Solutions

4 Systemic Challenges & Solutions

2
Section I: Cash Management Challenges & Solutions

3
Challenge 1: Manual and Time-Consuming Processes
Within internal and payment processes, there typically lies a large proportion that involve manual and paper-
based workflows. To tackle this, the automation of processes through digitalization paves the way to efficiency.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers
Underlying processes within Cash Management may be relatively Many banks still rely on manual systems and remain adamant on
inefficient due to factors such as involvement of multiple parties, switching to automation due to difficulty in building interfaces from
continual dependence on manual processes and regulations. scratch, and lack of integration capabilities for legacy systems.

Banks lose approximately 20-30% of their revenue every year due to The average age of Bank IT Applications is among the
inefficiencies caused by manual and repetitive tasks, re-emphasizing highest across industries
the need for workflow efficiency and optimization of customer service. Average Insurer 18
Average Universal Bank 14
>

Average Retailer 4.5

Average Digital Bank 3
Solution: Automation of Manual Processes
Overall Median
Robotic Process Treasury Management

Automation
Automate treasury
processes through software
robots and/or AI agents
System
Automate repeated and
manual processes, and
centralizes cash flow data
>
Why Automation is indeed crucial:
A 2019 survey conducted by Fenergo found that 78% of banks
stated they had lost customers to digital-first competitors.

Case Study:
Outcome:
1. Reduce need for manpower in critical tasks such as customer
service, KYC processes, cash collection and deposits. GEM Connect to address Aim to link treasury
workflow challenges practices into automated
2. Reduce processing time and costs as such technologies help across collections, workflows, simplifying
to streamline process efficiency. payments, funding and and streamlining complex
FX in APAC markets cash processes
3. Retrieve real-time financial data and analyze information in
one centralized system. Conclusion: Pursuing automation is a vital goal for all corporate
banks in order to differentiate customer offerings, and banks that
4. Offers improved control over bank accounts and compliance,
invest the necessary capital and time into digitalization will reap its
and management of in-house banking and financial operations. benefits in the long run.

Source: Temenos, AutomationEdge, Nomentia, McKinsey, Treasurers, CDOTrends,

Deutsche Bank 4
Challenge 2: Banking and Payment Fraud
As banks suffer substantial financial and reputational costs with regards to fraud, a strong implementation of
fraud detection and payment security measures become necessary in a time of technological advancement.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers
Banking Fraud remains persistent in a time of greater dependence on Barriers to the practical actualization and adoption of fraud detection
technology, exposing banks to not just financial loss, but as well as strategies include complex and interconnected financial systems,
reputational and efficiency deterioration (e.g. time & manpower). outdated legacy systems that lack integration capabilities, and
limited resources and skilled cybersecurity personnel.
Globally, the cost of fraud for banks is estimated to hit US$40.62bn

>
by 2027, 25% higher than in 2020, and Asia banks are estimated to
lose ~5% of revenue to fraud, higher than the global average of 4%.
Why Fraud Detection Security is indeed crucial:
>

§ A 2023 survey conducted by The Motley Fool found that security

and fraud protection features was the most important factor
Solution: Fraud Detection and Payment Security on choosing where to bank, with 92% of respondents stating so.

§ An alternative for banks would be to establish partnerships

Behavioral Analytics Transaction Fraud and/or make strategic investments into the cybersecurity space
/ Biometrics Monitoring Conclusion: A robust fraud detection strategy is paramount to
ensure the protection of customer data and bank accounts, and banks
should prioritize innovation in security infrastructure and services.
Device Machine Learning &
Fingerprinting Artificial Intelligence

Outcome: Case Study – HSBC’s Strategic Investments:

1. Greater security in the form of multi-factor authentication and A cybersecurity company – HSBC invested
real-time cash monitoring. US$40m to add its capabilities (detection and
response) and safeguard against cyber threats.
2. Higher level of customer confidence and trust when
conducting financial activities online.
Beyond Encryption’s email security system – to
3. Boost accuracy and speed of automated response assist HSBC in building enhanced digital
workflows with the help of ML and AI. relationships with their customers

Source: ACI Worldwide, Synpulse, Cosive, Motley Fool, Retail Banker International
5
Challenge 3: Liquidity Access and Limited Visibility
Lack of integration into corporates’ ERP is a barrier to real-time positioning and cash forecasting. Transactional
data sharing is by using API in ERP through Open Banking can help improve liquidity access and visibility.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers
However, there are some barriers to adoption:
91% of IT leaders agree that connecting ERP to banks is one of the
• Data privacy: Involve sharing sensitive and personal information.
most complex project. The lack of ERP integration is due to different
The lack of familiarity leads to non-credibility and doubt.
global banking formats and lack of technological expertise
• Standardization: Due to different banking format, integration
become more costly and complex.
IT team are not well-versed in coordinating real time resources and

>
often fails the initial testing phase and multiple rounds of re-testing,
which is time-consuming and costly.
Regulatory pressure to drive Open Banking APIs
>

§ Data sharing can be facilitated through risk-based, permission-

oriented approach, complemented by audit trails.
Solution: Transaction Data Sharing through API in ERP
§ Customer transparency and control must remain at the center
of product design decisions.

Revised Payment Services Directive (PSD2)

Governs payment systems in the EU and regulates
access to payment data by other parties than bank.

We have seen significant development in open banking in regions

such as US, EU, UK, China and Southeast Asia.

Conclusion: Transaction data sharing can be effective through

Outcome: regulatory pressure to facilitate open APIs. Additionally, as value
proposition becomes more evident to client, businesses may also be
1. Centralization service provides greater visibility of real-time more open to develop real-time operations
cash positioning under single administration,

2. Help corporation streamline their financial processes and Case Study - ISO 20022 Payments
reduce error, maximizing operational efficiency
New standard for financial information, providing
3. Opportunity to make more informed decisions & drive growth consistent, rich and structured data for financial
transaction.

Source: SWIFT, Deustche Bank, Mckinsey

6
Challenge 4: Decentralized Cash Management
Decentralization is commonly used by MNCs but has limits its real-time cash visibility. To tackle this issue,
Artificial Intelligence (AI) and Machine Learning (ML) with ERP Integrated Dashboard is the way to go.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers

Pros Cons
Not all ERP vendors are ready, Costly & time-consuming due to
- Local knowledge - Lack consolidation heavy investment & redesigning, Lack of AI experts due to complexity
- Quick decision - Lack standardization

However, with the recent slowdown in global economies, real-time
cash positioning is key to optimize operational efficiency, M&A,
CAPEX planning, debt management, strategic planning
>
>
Drivers for AI-related ERP Dashboard Solutions
1. High potential for AI-ERP solution from leading vendors
AI industry expected to continuously grow to USD$190bn by 2025
Oracle AI: Enhance operational efficiency through

the automation of transactional processes, provision

of intelligent insights, recommendation of action
Solution: AI & ML for ERP Integrated Dashboard Solutions
2. Cloud Acceleration
Integrating ERP and AI technologies for intelligent ERP solutions Allow more opportunities for Cloud-ERP for more accessibility and
lower upkeep costs. Bulge brackets has also ventured into cloud

Are corporations ready?

After witnessing the ripple effect of pandemic, we see an increasing
trend in adopting AI assistant to improve cash management structure,
Automated Simplified Department especially for MNCs for entire organization visibility.
Financial Immense Integration
Conclusion: Not all business are suitable for AI-related ERP. Due to
Reporting Data (Centralization) the scale and high cost, corporations should balance cost-benefit of
AI-related ERP dashboard solutions.
Outcome: Business strategy? Geographical presence?
Market exposure? International expansion?
1. Providing actionable insights + improving decision-making

2. Boost accuracy of cash forecasting through virtual assistants Case Study – HSBC-Blackmore (HSBCnet)
Centralizing treasury operations helped achieve
3. Facilitate reconciliation of global subsidiary accounts and improve effective cash management process and support
bottom-line performances its growth and expansion in Asia-Pacific due to
improved visibility.

Source: StrategicERP, Mckinsey, JP Morgan, HSBC, Oracle

7
Section II: Working Capital Challenges & Solutions

8
Challenge 1: Insufficient Credit Risk Analysis
Increasing pressures from market conditions and regulators after 2008 GFC to develop credit risk tools

Credit Risk Analysis Challenges of Credit Risk Analysis

1
Credit risk has emerged as a predominant banking-related Inefficient Data Management
challenge globally
2
Inadequate risk tools
77% of financial institutions listed credit risk as their primary concern
and 79% placed credit risk transformation projects as a high-priority 3
Limited data visualization capabilities
>

4 Outdated risk assessment models to reflect

Have your (banks) concerns about the following risk changing market conditions
categories increased or decreased over the past year?
Impact:
Environmental 4% 27% 61% 8%
1 Insufficient credit risk analysis leads to higher default probability
1.
Regulatory 18% 48% 33% 2%
2.
2 Creates financial implications for banks including loss of revenue,
increased costs associated with debt recovery, and potential legal
Operational 5% 43% 48% 4% disputes
Cybersecurity 39% 44% 17% 0% 3.
3 High no. of non-performing loans increases bank insolvency risks

Consumer 10% 40% 49% 1%

Example:
Compliance 21% 49% 29% 2% • Banks often handle siloed data which could lead to data
duplication or vital information being overlooked, resulting in
Credit 13% 64% 21% 3% inefficiencies throughout the lending lifecycle
• Updated database in real-time with streamlined collection, storage
0% 20% 40% 60% 80% 100% and organization of data facilitates easy retrieval of relevant
information
Increased significantly Increased somewhat
• This allows risks assessments to be made with greater precisions
No change Decreased somewhat/significantly
Source: BankDirector
9
Challenge 1: Insufficient Credit Risk Analysis
Increasing pressures from market conditions and regulators after 2008 GFC to develop credit risk tools
Solutions
1
How it works:
• Analyze historical & real-
time data
Machine • Identify patterns in income,
Learning > employment history, credit
score, payment history
• Continuously adapt &
improve from new data for
risk models to remain
updated and refined
2
How it works:
• Integrates the processes
Application • Enable automated real-
Programming > time data sharing
Interface (API)
• Smoothen their
transmission of information
between ERP systems and
rating agencies
Source: J.P. Morgan, CreditRiskMonitor
Case Studies
• Uses ML to analyze large
amounts of data such as credit
history to assign credit scores to
potential borrowers
• Uses ML to analyze historical
data and make predictions about
future outlook, economic
conditions, etc. that may affect
borrower’s repayment ability
• Real-time access to bankruptcy
prediction scores
• Real-time access to crucial data
points (e.g. bond agency rating
reports, outstanding accounts
receivables, credit limits)
• Provides reliable and secure
channel for data transmission via
standardized communication
10
Team’s View
Despite challenges (e.g. technological
integration, security), ML algorithms allow
banks to swiftly respond to the more
immediate market fluctuations and
evaluate which industries have undergone
> material changes to their default risk. This is
important in light of the COVID-19
outbreak that had disrupted global supply
chain as ML would allow banks to make
more informed credit decisions
API will be crucial in improving the accuracy
and timeliness of information for credit risk
assessment as well as reporting processes
to all relevant stakeholders. It allows for more
>
streamlined and reliable receipt of
information and execution of actions from
these platforms to improve workflow
efficiency
Challenge 2: Need for Working Capital Financing
The current macro-economic conditions have placed external pressure on companies’ working capital. This can
be addressed through solutions like Receivables Programs and Supply Chain Financing.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers
Businesses require efficient financial products to manage working The actualization of receivables and supply chain finance programs can
capital and ensure sufficient liquidity so that the companies can encounter barriers including customer’s acceptance, integration
meet their short-term operational needs. challenges and technological adoption.

>
Additionally, the carrying cost of money trapped in working capital is
significantly more expensive than years past considering higher
Case Study 1: Bank of America's Intelligent Receivables™
interest costs and by extension, higher internal hurdle rates.
BOFA’s Intelligent Receivables™ tool
>

showcases the tangible benefits of

Anticipation of Invoice Providing Liquidity to employing AI and data capture in
Collection through the Suppliers through Supply receivables management. It’s forecasting
Receivables Program Chain Finance Programs capabilities and comprehensive view of
collections greatly aid businesses in
• Proactive approach to managing their liquidity.
• Reverse factoring to
manage cash flow
unlock cash

>
• Corporations can better
• Injecting liquidity into the Case Study 2: DBS Sales Invoice Financing
plan their cash release and
supply chain
expenditure schedule In the case of DBS, the Sales
• Stronger and more resilient Invoice Financing (SIF) service
• Avoid potential liquidity provides an advance payment
supplier relationships
crunches against unpaid sales invoices,
thereby unlocking cash from
receivables and aiding in better
working capital management.

>
The continued evolution and adoption of such solutions reaffirm their
practicality and the tangible benefits they offer to businesses in
managing their receivables and liquidity, thus ensuring smoother
operations and financial sustainability.
Source: J.P. Morgan, Bank of America, DBS
11
Challenge 3: Suboptimal Use of Cash Surplus
Companies often accumulate cash surplus from their operations. Instead of letting this surplus sit idle,
businesses are exploring ways that can enhance their supply chain stability and relationships.
Summary of Challenges and Solutions Feasibility of Solutions and Potential Barriers
Potential Barriers to Actualization:
Macro Challenges
Strong technological infrastructure is pivotal for implementing dynamic
discounting. Also, managing dynamic discounting across various
Higher for Longer regions presents a complex challenge due to differing regulations,
Stubborn Inflation
Interest Rates currencies, and banking systems

>
Elevated Cost of
Economic Uncertainty
Capital
Case Study – Citi’s Dynamic Discounting:
• Citi’s Dynamic Discounting ensures that clients achieve maximum
…in today’s environment, cash becomes a more valuable returns on their excess cash while building resilience and
resource and companies have to ensure optimized utilization supporting suppliers.
• As early payment is an option for mid- to long-tail suppliers, Citi
>

clients can use the excess cash to reduce costs.

• In addition to strengthening supplier cash flows, dynamic
Broader trend in utilizing cash surplus towards collaborative and integrated discounting also helps strengthen long-term trading relationships.
financial solutions that can benefit all stakeholders in a supply chain

Citi’s approach to Dynamic Discounting makes it a practical and

viable solution for actualization in the corporate world:
How It Works
•1 Citi’s partnership with CF2O to offer Dynamic Discounting
− This partnership indicates a technological infrastructure that
• Suppliers are offered early payments in
facilitates the solution being offered through a secure online
Dynamic exchange for discounts
marketplace, addressing integration challenges
Discounting
• Suppliers receive payments sooner to enhance •2 Citi’s globality facilitates seamless transactions
their cash flow − Citi prides itself as a global bank, and has a proprietary
network encompassing 95 countries, which can be a growth
• Corporations earn a higher return on their cash enabler for clients in this way, providing a foundation to help
surplus by paying less than full invoice amount launch treasury towards achieving its goals

Source: J.P. Morgan, Citi, Global Finance

12
Challenge 4: Lack of Visibility in Real-time SCF Process
Supply chains have become complex and dynamic networks that extend across multiple geographies

Summary of Challenges and Sollutions Feasibility of Solutions and Potential Barriers

Lack of real-time visibility on overall process flow, status, and Digital platform solutions:
execution of financial transactions
1.
1 Transforms centralize information: Allows stakeholders
have immediate insight into transaction statuses & cashflow
> 2.
2 Offer multi-geographical capabilities: Enable seamless
1
Information may be unavailable, inaccurate, cross-border communication and data sharing
Reasons

inconsistent, or incomprehensive
3.
3 Support end-to-end transaction tracking: Facilitates real-
2 Orders placed across a range of systems create a time monitoring of financial processes to reduce amu risks
disconnected flow of data and uncertainties with financial transactions
>

1
Inability to effectively assess, monitor, and
manage any potential financial risks for buyers
and suppliers
Impact

Data Security & Privacy

Regulatory Frameworks:
2
Hinders the ability of businesses to respond The openness of digital
Digital platform solutions
adaptively to market fluctuations, demand shifts, platforms could potentially
must navigate the different
and supply chain disruptions expose businesses to
regulations and
vulnerabilities and threats,
standards, ensuring
necessitating robust
>

compliance and adaptability cybersecurity frameworks to

to the legal landscape
Case Study: Dltledgers safeguard against malicious
across various geographies
intents and data breaches.
A finance digitization platform that uses blockchain
Solution

technology and allows relevant stakeholders in multiple
geographies to track the flow of capital throughout the
supply chain, enhancing transparency. It provides real-
time reports, secure tracking of verified documentation,
accurate data and digital document repositories, as well
auto-matching and reconciliation system to allow for peer-
to-peer sharing in real-time.
Team’s view: Digital platform solutions will bring enhanced visibility,
real-time tracking and global connectivity to the SCF process. As
these challenges on security considerations and regulatory
complexities are being continuously tackled over time, we will
witness increasing adoption of these digital platform solutions
in the SCF lifecycle in the future.

Source: Dltledgers, Oracle

13
Section III: Trade Finance Challenges & Solutions

14
Challenge 1: Duplication Issue and Lack of Visibility
Duplication still remains a problem in trade finance today, as seen from Hin Leong Trading 2020 scandal. The
lack of visibility in documentary trade processes hinders clients from making critical decisions.
Reasons on the existence of duplication Importance of visibility

4 billion documents created annually

Each cross-border transaction requires up

Legacy of to 36 documents and 240 copies on Clients struggle to
traditional trade average synchronize and integrate
finance is that data across various
most processes > Handling all trade finance documents systems, restricting them
are still largely might take as long as 3 weeks from being responsive in
paper-based their overall supply chain
High dependence on paper would mean approach
chances of tampering with documents are
high

• Lack of global standards Higher level of control and Integration of banks in trade
coordination with banks transactions means banks
• Varying legal and regulatory allows clients to successfully have a vital role of
frameworks achieve their strategic goals influencing the exchanges
o Privacy regulations
Other issues > o Technological restrictions

>
• Lack of collaboration and
coordination between banks
o Information silos
o Competition concerns However, banks are currently lacking in this area

Source: Global Trade Review, Aberdeen Group, International Journal of Supply & Operations
Management 15
Solution 1: Digitalised Platform and Blockchain
The first step to going digital is to create an easily accessible hub for all parties. Blockchain can be integrated
to the digitalised platform to strengthen the security and storage of the data in the digital space.
Digitalising trade finance Blockchain as an enhancement
Transparency
All stakeholders can view the
ledgers any time which fosters trust
Benefits >
Security
Blockchains are tamper proof and
keeps data secure

Cyber Attacks
Blockchains are still susceptible to
attacks through infected devices
Barriers > Huge Energy Consumption
Computers processing the
DBS completed its first trade financing transaction with Audi Singapore transactions consumes lots of
and Premium Automobiles, worth S$3.5 million LC in 2020 electricity
>

Private Blockchains and

ü Processing time shortened from roughly a week to less than one
VPN requires more identity
working day
and access controls
ü Provide real-time updates on the progress of their transactions Mitigation >
New Model of Computations
>

Proof of Stake model aims to

Second trade ongoing worth S$2.8 million significantly decrease energy usage

Partior’s Blockchain
CamelONETM Trade Value-added service on NTP that has a
Finance Portal duplicate invoice check • Spearheaded by MAS and other banks
Case
Study > • Aims to facilitate cross-border
transactions between banks
However, digitalisation means that trade transactions will be
more prone to cyberattacks • 70 banks on the Blockchain

Source: DBS, Global Trade Review,, Ledgerinsights , IBM, Euromoney, Flaticon

16
Challenge 2: Poor Invoice Matching & Auditing Process
As the trade industry is still using paper-documents, the invoice matching, reconciliation and auditing processes
are inefficient, thus innovative digital solutions are required to streamline these processes.
Summary the Challenge and Solutions Feasibility of Solutions and Potential Barriers
Poor invoice matching process arises due the delayed sharing of Optical Character Recognition (OCR):
numerous paper-documents, mismatches in information amongst
different documents, missing information and clients with Challenges of successfully utilising OCR includes highest accuracy rates
only at 90%, thus the need for human intervention remains, but this is
numerous simultaneous transactions with extensive quantities of
limited intervention of ensuring the technology is performing correctly.
documents Additionally, language barriers specifically recognising characters and
image quality, such as lighting and handwriting of the physical document
As the reconciliation and auditing processes are indivisible with and scanning of it.
the invoice matching process, inefficiencies due to the delays in
AI Algorithms:
one of these processes, causes delays in the following processes
Challenges of successfully using AI includes need for supporting
technology like OCR, a lack of standardised document format and need
>

for changes in regulations. The UCP600 and national policies need to be

Solution: OCR & AI Algorithms updated to include the extent to which AI can be implemented in the trade
industry, otherwise due to legal repercussions, the value of the AI solution
Transforming the trade finance industry from the use of paper- is limited.
documents to a paperless transaction through OCR digitalised
documents and AI Algorithms processing and auditing the documents Reduced manual input in processing an LC
can be employed by banks to generate value for both the bank and Conclusion:
clients as streamlining this process increases efficiency, reduces Implementing OCR is
errors and delays. necessary to reduce
delays, increase
Outcome: efficiencies of the
overall process,
1. Increased efficiencies in invoice matching, reconciliation and
however the usage of
auditing processes as the technology recognises, extracts and
matches documents according to various factors AI algorithms will
have to be
2. Quicker transferring information between different parties progressively
including bank intermediators, as the information is digitally implemented
recorded and easily accessible for both the bank and clients according to updates
in trade regulations
3. Increased accuracy in information shared as manual input is nationally and
eliminated, discrepant documents are recognised early in auditing
and delays due to incorrect information is reduced internationally.

Source: Office of the Comptroller of the Currency, Hofmann & Berlin, Elsaid, S, Vilda, Patel,
Pura, Achar 17
Section IV: Systemic Challenges & Solutions

18
Smart Contracts
Addressing today's financial challenges as they result in low efficiencies across sectors of the industry

Cash Management Smart contracts are self-executing programmable contracts that

encode an agreement between two or more parties, the terms of
a transaction are written as a protocol that exists across a
Banks internal processes are very manual and time consuming distributed, decentralized blockchain network system

Benefits
Payment processes are time consuming with the involvement of
multiple parties leading to increased inefficiencies Automation
Banks are required to do their due diligence on their
clients, Smart contracts helps to streamline the
Need for end-to-end digitalization to make cash centralization, KYC Process and other repetitive tasks
reconciliation and fraud detection workflows more efficient
Reduced Transaction Costs
Smart contracts automate most of the work, Banks
Working Capital can hire less people to do the same job
Duplication arises from repetitive data entry or task execution, >
which consumes valuable time and increases the likelihood of Greater efficiency
errors Smart contracts leverage on blockchain which runs
24/7 and have low error rate
Slow pace of invoice approval delays the availability of working
capital for businesses affecting their operational efficiency and Artificial Intelligence
financial stability Smart contracts can leverage on AI to draft
contracts automatically based on pre-defined
Discount offered by suppliers for early payment not fully utilized specifications and conditions
due to process inefficiencies resulting in less cost savings and
strained relationship
Transparency
All stakeholders can view the progress of their
Trade Finance
transactions on the Blockchain

Inefficiencies arising from cross border transactions

Smart contracts are forecast to grow at a CAGR of 24.2% by 2029

Source: Flaticon, Valuates, Forbes, LinkedIn, businessofapps

19
Smart Contracts
While Smart contracts do have some issues that need to be ironed out, they are no doubt a key to a better
future in finance
Barriers to Smart Contracts
Complexity
Lack of Regulations
Blockchains requires complex codes to run and
Blockchains & Smart contracts are fairly new to the
thus requires technicians with high expertise
financial industry and are not well regulated
leading to lower adoption rates

Scalability Interoperability
Banks are currently testing out the smart contracts No fixed global standard for different Blockchains
technology using a small blockchain in their lab to communicate with each other

>
Case Study 1: Working Capital – Supply Chain Case Study 2: Cash Management

Bank of China Hong Kong (BOCHK) trials CBDC smart contracts for
prepayments

• BOCHK issued simulated Hong Kong dollars to employees of the

Bank, which they could spend at ten participating merchants

• When employees buy a prepaid service contract from a

participating merchant, the customer’s prepaid funds are converted
into digital Hong Kong dollars under their own name

• Once the merchant provides the good or service, the smart

contract executes automatically and the merchant receives the
payment immediately

• Additionally, the bank integrated the eHKD with existing point of

sale functionality, BoC Pay and BoC Bill “Payment Express”, and
Deutsche Bank has partnered with Roche’s to set up a procurement did not require merchants to install any new software
system that runs on Smart Contracts and integrates with ERP systems
• This significantly reduces the burden on merchants and enhances
Participants have access to this same data, which can then be integrated the overall convenience of the payment system.
into their internal systems

Source: Flatico, Ledger insights, DB, Forbes

20
Communication Barrier Between Banks and Clients
Both supply chain financing and trade finance process lack the communication from banks to clients and vice
versa, which prolongs the process and increases different parties’ frustrations.
Working Capital – Supply Chain Finance Documentary Trade Finance Processes
Customers have queries, need assistance, or require real-time
Different parties involved in a transaction are from different
updates regarding their status of their supply chain finance
countries and operate on different platforms
processes

Challenge becomes magnified when considering the breadth and

Complexity of documents required in a trade finance process
depth of interactions in supply chain finance
>

Documents moving back and forth between the same parties

Walmart used chatbots to negotiate with suppliers
to streamline purchasing procedure in 2021.

>
68% of suppliers approached and chatbot was able
to negotiate and reach agreements, reducing
turnaround time to an average of 11 days Buyers and suppliers can upload their relevant
documents online using chatbots
Average saving of 1.5% saving on the spend
negotiated and an extension of payment terms to Chatbots verify these documents and provide
an average of 35 days real-time updates

Trade finance documents such as LC require a range of skills

Chatbots significantly speed up communication and response
and expertise to examine and ensure they are correct, which
times when dealing with suppliers, who are key components of
may be limited by the chatbot’s pre-programmed commands and
supply chain management
scripts
>

ü Chatbots are useful in communicating and collecting non-complex documents

ü Beyond that, banks have to engage an advanced chatbot that has the ability to detect inaccurate data or solve a problem when unusual situations
arise (which often happen in trade finance due to its complexity)

Source: Medium, Oracle, verloop.io, Linkedin, Acuity, boost.ai

21
Digitizing the Onboarding Process
Digitization in the onboarding process is becoming increasingly crucial in the corporate banking sector due to a
myriad of factors that drive efficiency, compliance, and customer satisfaction
Summary the Challenge and Solutions Feasibility of Solutions and Potential Barriers
Key Challenges of Traditional Manual Onboarding: Barriers to Actualization of Digital Onboarding:
• Stringent regulatory compliance and due diligence requirements
1− Processes can be time-consuming, error-prone, and may not like Anti-Money Laundering (AML) and Know Your Customer
meet the evolving expectations of modern businesses.
(KYC) laws.
2− As corporate banking deals with high-stake transactions and • Rigorous requirements of documentation verification and in-
complex financial services, the urgency for a streamlined, accurate,
and swift onboarding process is paramount. person checks to ensure the authenticity and legality of the
business operations.
>

>
DBS Successfully Digitized its KYC and Onboarding
Solution: Digitizing the Onboarding Process
Process

DBS is connected to various central

Case Study – CitiDirect repositories for KYC Data
• With lesser information required, digital onboarding process is made
simpler in a single window.
• Through CitiDirect, clients can complete an entire account opening Standardization and streamlining of data
online, track their status and provide information. during onboarding process made possible
• Documents can now be signed with electronic signatures, making it
convenient for clients.
Integrated digital signatures and video
capabilities for smoother onboarding journey for
clients

>
Despite these challenges, it is evident that digital transformation can
effectively address the inherent drawbacks associated with manual
onboarding. Financial institutions such as HSBC digitize their
onboarding processes in which 82% of its clients rated their
experiences as excellent.

Source: Citi, DBS. HSBC

22