TSU/BPO: Is paper still essential
for Trade transactions?
SIBOS Boston - October 1, 2014

Daisuke Kamai

Head of e-Trade Product, Transaction Banking Division,
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Toshihiro Fukao

General Manager, Financial Business Sales Department 3NTT DATA Getronics Corporation
Copyright © NTT DATA Getronics Corporation

AGENDA

About NTT DATA Getronics
Current Issues in Trade Finance andTSU/BPO Overview
Case Study:
3 Steps of BTMU’s approaches to TSU/BPO
BTMU and NTT DATA Getronics:
3 Steps toward providing the TSU/BPO Service
Copyright © NTT DATA Getronics Corporation

1. About NTT DATA Getronics
Clients
 3 Major Japanese Banks
The Bank of Tokyo-Mitsubishi UFJ Japanese Branches ofForeign Financial
Institutions
 Tier 3 Japanese Banks Japanese Securities
Company Japanese Trust Banks

Established

September 21, 1960

Headquarter

Tokyo, Japan

Capital

831.81 million yen

Shareholders

NTT DATA Corporation 70%
Getronics Finance Holdings B.V. 30%

Employees

587

FinancialSolutions

SWIFTNet
BOJ-NET Connectivity
Anti-Money Laundering
Transaction Banking

ITServices
Copyright © NTT DATA Getronics Corporation

BusinessSolutions

Smart DevicesSolutions

2. Current Issues in Trade Finance
What could be issues of Letter of Credit (L/C)?
1. WORKLOADHigh volume of workload for both corporates and banks
Longer operation time for document checking by using
2. OPERATION TIME paper based L/C
High costs to take Bank’s L/C service for corporate
3. COSTcustomers

TRANSACTION

Increasing of Open Account transactions“Lettersofmight
creditbe
areThese days,
only youaround10%of our“While ita dead.
high-margin
business,wouldmakebusinessis based
ongothem,
still margin
have banks
more money
if youafteryetthewelower
massconstantly
marketapproaching
ustryingtosellan
expensiveandcomplex
productand listen to your clients.”
that doesn’t suit our needs.”
Kah Chye Tan, chair of the ICC Banking Commission
Gary Slawther, treasurer at Octal Petrochemicals
TSU/BPO can be one of the new solutions for these issues in Trade Finance.
Copyright © NTT DATA Getronics Corporation

2. Current Issues in Trade Finance

Irrevocable

Contract

Contract

AdviceDocuments

LetterofCredit

Buyer

Data

Seller

Application

Documents

Buyer

Documents

Bank
Payment
Obligation

Documents
LC Issuing
BankLC Advising
Bank

Payment
Bank services based on paper
document processingCopyright © NTT DATA Getronics Corporation

Undertaking
Contract
Seller

Buyer

Data

DataMatching

Documents

Seller

OpenAccount

Data
BPO Obligor
Bank

BPO Recipient
BankPayment
Bank services based onelectronic trade data exchange

Buyer’sBank

Seller’s
Bank

Payment
Bank services limited topayment processing2. Current Issues in Trade FinanceCounterCount

Banking groups adopting BPO

58

Banking groups live on BPO

12Corporates live on TSU/BPO

More than 30

Banking groups reachable on TSU84

BIC8s reachable on TSU

166

BIC8s and BIC11s reachable on TSU

250

Countries reachable on TSU

47

Copyright © NTT DATA Getronics Corporation

SOURCE: Sept 4, 2014, Market adoption of BPO, SWIFT's Corporates and Supply Chain team

2. Current Issues in Trade Finance: Solutions≫ Streamlining operationalprocesses≫ UR BPO ICC UniformRules≫ Low awareness≫ A few participating banks

Why TSU/BPO has not been expanded yet?

It is now in the phase of the TSU/BPO expansion where these gaps exist.

Why banks have not fill these gaps so far?
Its investment? There would be big bang approach or step-by-step approach.
Approach
Copyright © NTT DATA Getronics CorporationApproach3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO
BTMU joined the TSAG (Trade Service Advisory Group )2003
BTMU successfully completed the prototype test
2004
SWIFT started the development of TSU model for its promotion
2005

The Bank of TokyoMitsubishi UFJ, Ltd.
(BTMU) and NTT DATA
Getronics have beenworking together toward
providing the TSU/BPO
service to BTMU’s clients.

BTMU started the testing for the commercial
release with NTT DATA Getronics’s support
2006
1st Step
BTMU started the TSU service for corporate customers
2007

BTMU released the TSU Process Management
System with NTT DATA Getronics’s support
2010
2nd Step

BTMU released the BPO support version of the TSU Process Management System

2014

2012
ICC ratified the URBPO by the International Chamber of Commerce
2013
3 rd Step

BTMU released the TSU Front-End System with NTT DATA Getronics’s support
Copyright © NTT DATA Getronics Corporation

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO≫ BTMU commenced the TSU service with minimum effort for theircorporate customers by using the Standalone Alliance WebStation.

Copyright © NTT DATA Getronics Corporation

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPOBuyerSeller
Manage the whole process in the TSU

Buyer’s BankTSU

Seller’s Bank Reducing operational risks to avoid missing out an appropriate
operational flow or missing documents:
 Consistency operational status management from the beginning ofreceiving Purchase Order (PO) data to these payments

 Reducing compliance risks through rigorous paperwork procedures:
 Using audit trail
Copyright © NTT DATA Getronics Corporation

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO

TSU
application

TSU
P/O copy
application
Matching
ResultMatching
ResultP/OData
Input onTSU
Matching Result(Contract Info)

Matching
MatchedContract
Data

Matching Result(Shipping Info)

Settlement
Process

Copyright © NTT DATA Getronics Corporation

TSU

Matching

Data
Input onTSU
Matching Result(Contract Info)

Data
Input onTSU

Matching Result(Shipping Info)

Transfer ofMoney

TSU
application

TSU Process Management
SystemContract

EXPORTEREXPORT BANKIMPORT BANKTSU Process Management
SystemIMPORTER

Contract
TSU
application

P/O copy

Matching
ResultBills-bought
application
Ship doc copy

Shipping
Document

Matching
ResultReceiveFunds

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO

SCREENIMAGETSU Process Management System

FUNCTION OVERVIEW

 Status management
 Accept clients documentations
 Accepted reference data
 Data approval
Copyright © NTT DATA Getronics Corporation

 Notification to clients Transaction trail reference Settlement date management

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO

The voice from corporates:“Improving turnaround time.”“Reducing paper work”
MT202 GENERAL FINANCIAL INSTITUTION TRANSFER

MT202 GENERAL FINANCIAL INSTITUTION TRANSFERS ENDERS ES S ION
IS NFi e l d Nam e
T r an s ac t i o n Re f e r e n c e Nu m be r
Val u e Dat e , C u r r e n c y C o de ,Am o u n t

IBBIW S W 1 X X X INT ERNAT IONAL BUS INES S BANK C ORP ORA
2222
123456

S ENDERS ES S ION
IS NFi e l d Nam e
T r an s ac t i o n Re f e r e n c e Nu m be r
Val u e Dat e , C u r r e n c y C o de ,Am o u n t

S e n de r ' s C o r r e s po n de n t

53B

T ag
20

ContentsT-10004

32A

0 3 0 2 1 9 JP Y 6 0 0 0 0 0 0/1111
C IT IJP JT X X X
BOT K JP JT/1234567890
DEUT JP JT/123456
ABNANL 2 AIn t e r m e di ar y

56A

Ac c o u n t W i t h In s t i t u t i o n

57A

Be n e f i c i ar y In s t i t u t i o n
Be n e f i c i ar y In s t i t u t i o n

58D58AIBBIW S W 1 X X X INT ERNAT IONAL BUS INES S BANK C ORP ORA
2222
123456T ag
20ContentsT-10004

32A

0 3 0 2 1 9 JP Y 6 0 0 0 0 0 0/1111C IT IJP JT X X X
BOT K JP JT/1234567890
DEUT JP JT/123456
ABNANL 2 A

S e n de r ' s C o r r e s po n de n t

53B

In t e r m e di ar y

56A

Ac c o u n t W i t h In s t i t u t i o n

57A

Be n e f i c i ar y In s t i t u t i o n
Be n e f i c i ar y In s t i t u t i o n

58D
58A

Buyer

SellerManage the whole process in the TSU

Buyer’s BankTSU

Seller’s Bank

 Timely and accurate status information can be delivered.
 Expand further operational streamlining.
Copyright © NTT DATA Getronics Corporation

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO

BTMU TSU Front-end System service
has released in April 2014.

Copyright © NTT DATA Getronics Corporation

3. Case Study: 3 Steps of BTMU’s approaches to TSU/BPO
BTMU’s Global TSU Network (As of Sep2014)
Live

LondonParis

Guangzhou
KarachiDubai

Beijing
HKTokyoShanghai

BKK Hanoi
KLHCM
SGP
JKT

Testing

Planning

New York

Taipei
ManilaSantiago
SydneyCopyright © NTT DATA Getronics Corporation

ReadySao Paulo
Buenos Aires

4. BTMU and NTT DATA Getronics:
3 Steps toward providing the TSU/BPO Service

1st Step
BTMU:≫ Established theTSU/BPO
operational flow
based on L/Coperational flows
NTT DATA Getronics:≫ Set up the SABsystem

Copyright © NTT DATA Getronics Corporation

2 nd Step
BTMU:≫ Established theprocess
management
NTT DATA Getronics:≫ System

Development forthe process
management

3 rd Step
BTMU:≫ Increased thelevel of theservices to theircustomer

NTT DATA Getronics :≫ System

Development of the
TSU front-endsystem

4. BTMU and NTT DATA Getronics:
3 Steps toward providing the TSU/BPO Service

Copyright © NTT DATA Getronics Corporation

Copyright © 2011 NTT DATA Corporation

Copyright © NTT DATA Getronics Corporation