With technology, the traditional paper based banking is about to completely disappear and becoming with time paperless transactional handled. Internet banking for example made it easier for business to handle transactions, using ATMs was a revolution, mobile banking etc.. but how would this continue with the advance tech? what is coming?
FinTech as the new industry that uses technology to improve activities in finance. The use of smartphones for mobile banking, investing services and cryptocurrency are examples of technologies aiming to make financial services more accessible to the general public
When we take trade finance in particular, in the form of LC (letter of credit). We all capture the traditional way this kind of transaction is handled. From submitting the application to the importers bank, issuing the LC to receiving it to issuing the shipping documents to the release the goods …etc. paper is the way steps are documented but not for so long. Paperless trade taking place on the basis of electronic communications, including exchange of trade-related data and documents in electronic form is the future substitute.
Tomorrow is coming to with Fintech that will allow completely all parts involved on trade finance to deal with each other and make transaction with no papers all at. Can you imagine? bankers nowadays can look at it from the perspective of advancing processes and mitigating risks etc. banks will need to deliver a superior digital experience based on the latest technology trends – it all starts with an intelligent digital experience.
According to SciDev, Several countries have incorporated elements of paperless trade in cross-border trade transactions. Mikic says that Thailand, by investing US$31 million in paperless transactions, saved about US$1.5 billion.
In March, India announced the launch of the Indian Customs Electronic Commerce/Electronic Data interchange Gateway (ICEGATE) to handle 98 per cent of the country’s imports and exports in real time and provide an electronic interface for the trade, transport, banks and regulatory agencies.
Currently, according to Park, East Asia has the highest implementation rate for trade facilitation and paperless trade in the Asia and Pacific region at 73.7 percent, after Australia and New Zealand.
Thailand, India are among the Asian countries that have adopted paperless trade.
“Digitalisation, along with institutional coordination, is a great tool to further enhance trade facilitation implementation and reduce trade cost”. Cyn-Young Park, Asian Development Bank
According to APEC, Traders will benefit from paperless trading through reduced cost of shipping goods across borders, through lower communications charges, lower paper handling charges, fewer errors and faster receipt of payments, reduced trade finance charges and lower inventories.
Tareq Al Asadi