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Trade Finance Workflow automation: What you need to know.


Trade financing is a significant part of banking operations and contributes a considerable share to its annual revenue. As trade financing plays an integral role in the relationship between banks and corporates, it has the potential to generate revenue and improve profitability with the right technologies. In this competitive world, banks must digitize their trade financing operations to succeed in the future and benefit from market growth. Therefore it's necessary to digitize and automate its processes.


Challenges in Trade Finance


The number of trade documents involved in each trade financing activity is enormous. Many banks still rely on traditional document processing methods, and the process is still paper-based and labor-intensive. As a result, the risk of errors is high, there is a longer transaction turnaround time, and it also causes constraints on regulatory and compliance.



The traditional trade document processing task is lengthy and requires several processing and approval levels. Once the customer submits the application at the branch, the staff checks all the documents, which may vary from product to product, scans the documents, and sends them to the trade finance team, where another staff again checks it to make sure that all the documents are proper and enters relevant data into the system. This data is then verified by another staff. Also, compliance and AML checks must be done against various internal and external systems.


The Need for Automation


Automation solutions can simplify trade document processing, eliminate errors, reduce the transaction turnaround time, and improve accuracy and compliance. An AI-powered automation tool can help banks automate document-heavy processes and ensure a smooth business process.


Here's how AI can help automate the workflow.


An AI solution can fetch various documents in digital format from sources like an email or shared folder. There are different types of trade finance documents, and the automation solution can classify each of them according to their type and extract necessary information from them. The extracted information is verified against any internal or third-party systems, and AML checks are carried out to flag any discrepancies. The processed information can be consolidated and transferred to any existing system, enabling complete automation of the trade document processing workflow.


Key Benefits of Trade Finance Process Automation


Improved efficiency and productivity: As AI-powered automation enables faster processing, banks can reduce the turnaround time. With better compliance checks, banks can associate with credible customers, meet their demands, and reduce customer churn rates.


Reduced Errors: Unlike traditional methods, the risk of errors is significantly lower with automation which improves the accuracy of the process.


Reduced Fraud: AI can play an important role in identifying and preventing fraud by carrying out thorough AML checks.


Save time and money: An AI automation solution can streamline trade finance operations and save time and money on hiring and training employees to do repetitive and time-consuming tasks.


In today's world, it has become imperative for banks to go digital and adopt technologies to enable them to be industry leaders. They should be equipped with automation solutions that can solve the growing business challenges and remain competitive.