It’s over a year and a half since the release of the Universal Rules for Bank Payment Obligation (URBPO) by the International Chamber of Commerce (ICC). Yet, despite a lot of initial interest – and many months of discussion – it is only in the last few months that we have begun to see a noticeable increase in the volume of requests for information (RFIs) and requests for proposal (RFPs) coming through, particularly from the banking industry.
Interestingly, a lot of banks are looking to go beyond the basic functionality (i.e. replacing paper-based letter of credit with an electronic alternative). In many cases, this means offering value-added services, such as automated matching of shipping documents and other straight-through processing designed to make international trade finance more efficient.
This confirms Bolero’s belief that, in moving to BPO, banks and technology providers have the opportunity to create compelling and differentiated product offerings, transforming the currently neglected area of the corporate-to-corporate flows through the fast and efficient electronic exchange of key documents.
Elsewhere in the supply chain, for exporters, the primary advantages include the reduced risk and cost caused by delayed, lost or stolen documents, as well as the opportunity to guard against potential fraudulent activity. For importers, a smooth-running, collaborative BPO process allows secured financing from banks to be accessed at the earliest possible opportunity, as well as removing the costly and often time-consuming requirement to issue Letters of Indemnity.
Used strategically, all parties can use BPO to work more collaboratively within the trade finance chain, increasing the efficiency of what may previously have been rather cumbersome trade flows. In this respect, the fact that interest in this new financial instrument is now growing can only be good news. So while it’s still too soon to talk about a ‘new era’ for BPO, if the interest we’ve seen is anything to go by it’s certainly a case of watch this space…
If you'd like more information on BPO, have a read of our BPO White Paper