First National launches automated L/C AT FIRST National Bank, the Trade Department of the international division produces solutions to its customers problems.
We're facilitating trade. Not only do we provide the necessary trade finance, we establish what deal the customer has in mind and assist in structuring it for him, says Frank Dunlop, chief manager of the trade department.
According to Dunlop, a number of deals are still based on structures from the trade sanctions era. We're looking at better solutions for the client. And part of that is greater flexibility.
A recent example involved a deal between a local exporter and a Ghanaian importer. The Ghanaian wanted 90 days credit terms while the exporter needed payment at sight. By building those costs into the letter of credit we were able to structure the deal in such a way that both parties were happy.
It's a question of getting to know the client. As part of this campaign, the bank recently undertook a survey to establish what the client needed most.
The answer was quicker turnaround time, quicker response time to queries on letters of credit and greater accuracy.
The response from First National has been the introduction of a new fully automated letter of credit system.
Dunlop explained: The system is on the customer's desk and allows him to issue and receive letters of credit (LCs) from his desk top.
Both the back office and the customer's side are fully automated.
The customer enters the LC, it comes into our back office system where it is checked on the screen. If it's in order it goes off.
Not only does it save in turnaround time, but if your financial director wants to check on everything that goes out, he has instant access to all that information via the system. First National started rolling it out at the beginning of this year and already has a considerable number of major corporates using it.
Dunlop believes that most of the bank's customers will ultimately opt for automation, although at this stage it is volume-based and generally limited to larger corporates.
In addition we're working on taking information from the LC and generating documents from that information so that discrepancies will be a thing of the past. The Bank does however cater across the spectrum, not limiting its reach to larger clients.
According to senior manager Henry Golding, the short-term export guarantee system underwritten by the Department of Trade and Industry has taken off extremely well. We were the first bank to offer it and a number of banks have followed our lead. The Specialised Trade Services division offers the full range of trade finance options from back to back LCs, structured trade transactions and consignment finance, to merchanting transactions, transferable LCs, and pre- and post-shipment finance.
In line with its philosophy of providing a total solution, its consultancy service embraces free training seminars for clients.
By helping a client to streamline his operations, the bank was recently able to save him R100 000 a year on bank charges.
That's what it's all about. Our focus has changed. We have become more innovative and more flexible.
