Technology has brought major reforms in the medical, aerospace as well as the automotive industry. However, the combined changes in all these industries still cannot match the scale of use of technology in the baking and financial sectors. The trade services in the banking sector have seen some of the most technology-driven changes in the past couple of years.
Here are some of the most common technologies currently used in the trade finance sector across the globe.
Key Trade Documentation
Documentation is an important part of the trade financing practices. Flawless and consistent documentation is a must for all the companies that wish to grow in this sector. The documentation practices help the companies file their taxes as well as keep a trail of the money that goes into different accounts within the organization. The documentation of standby letter of credit both at the importer’s and exporter’s end plays a key role in the whole process.
A reliable trade finance company will help you establish a new bank account or link your private bank account to the trade financing practices effectively. Modern-day trade finance companies use automatic document generation tools to generate as well as keep track of the most important documents in the process.
Invoice/Purchase Order Finalization
Without the necessary documents on invoice/purchase order finalization, the entire process of trade financing can come to a halt. Today, computers can store vast amounts of data in a highly organized fashion so that you can effectively track all the flow of money from one account to the other.
These tools can provide regular updates of the deal to the owner with regular reminders as well as automating the mailer processes. The tools help as an active calendar that can take actions on its own instead of a passive one that just marks a process/date on your timeline.
Efficient Verification Via Maker-Checker Mechanisms
The verification process of documents takes up a large amount of time in trade finance practices. Conventionally, the banks employed a large taskforce only for this mechanism. The shift of one decimal point in a critical document can cost a loss in millions of dollars. This is why banks invested heavily in such a task force. However, the modern-day trade finance banks do not have to invest in such practices anymore. Instead of investing heavily in the inefficiency of the human taskforce, they employ a highly advanced maker-checker mechanism. This mechanism keeps track of the consistency of information that is flowing through the system.
RPA (Robotic Process Automation) technologies have taken the world by a storm today. This technology is capable of mimicking human actions millions of times in a completely error-free manner. The RPA technologies are helping modern-day banking individuals perform more logical and thought-related operations instead of plain repetitive and mundane tasks such as filling up an invoice sheet.
AI (Artificial Intelligence) in sync with the RPA technologies has significantly reduced human efforts. Now, the computers can think just like humans and take logical decisions based on strict data points. AI does not bring the inefficiency of human emotions into the picture, thereby increasing the statistics of usability more in its favor.
Cognitive and Machine Learning Technologies
AI + RPA + ML (Machine Learning) technologies with cognitive abilities are the perfect combo that is revolutionizing the banking industry today. These technologies come together to minimize errors, increase efficiency, and productivity as well as reduce the cost for banks.
Employment of these technologies is the first step towards true digital transformation. The banks that are actively employing these technologies are already ahead of the banks that are not.