Switching to an end-to-end digital bank guarantee process is easy
trace:original bank guarantees
With trace:original, it is possible to fully digitise bank guarantees. trace:original is replicating today’s paper workflow through an end-to-end digitalisation process that is acceptable to all parties while keeping their current systems. There are no special requirements on any counterparties to the bank except that they need a computer and access to the internet. Not even a change of current laws and regulations is needed, provided they are technology-neutral.
How bank guarantees work today
There is no one way on how to issue digital bank guarantees. Bank guarantees are predominantly issued on paper or through SWIFT, if it is a bank-to-bank guarantee. Occasionally guarantees are also issued as electronically signed PDFs or on closed platforms. The multiple different processes applied for issuing guarantees create problems for all:
The applicant has no visibility over lead times for issuance and delivery to the beneficiary, it is not possible to agree with the beneficiary on a specific standard format and the termination or release process is often lengthy.
For the bank, the paper process creates extra lead times and costs, and an end to end digital process is often not possible. Far from all beneficiaries accept PDFs, and should not, as they are not original documents. Platform solutions are challenging due to that which ever platform selected it will not reach the required network as it is not feasible or even possible to onboard all.
For the beneficiary, the paper process creates several operational and data management challenges and is risky and costly. The simple PDF is not a viable original document, and it is not feasible to require all banks to be on the specific platform preferred by the beneficiary.
What are the benefits of using trace:original?
With trace:original, all digital guarantees can be handled in one workflow, with a trace:original digital original document as an information carrier, that can then be transferred in any way the holder wishes.
The applicant can get visibility over lead times through the process and can provide the input data content and format for the guarantee at the very start. The applicant and beneficiary can also agree on a specific standard for the content of the guarantee which will make it fully machine readable and machine processable for all. This can be done in the existing software and processing environment, and without being onboarded to any specific platform.
For the issuing bank it is possible to immediately start digitalising in parallel with current paper processes, without any requirement to change the actual process. The bank can digitise all the steps of the issuance process including adding electronic signatures and/or seals. The issuance and the sending of the digital guarantee will be instant and there will be only one digital format regardless of the beneficiary’s preferred way of receiving the guarantee, email, through platform or SWIFT.
The beneficiary will receive a digital original bank guarantee and not a copy nor a data record on a platform. Should the beneficiary already be on a platform the guarantee can easily be recorded on the platform. If a specific standard has been used inside the guarantee, the document can be fully machine readable, machine processable and automatically stored and managed within the beneficiary’s environment.
Digital guarantee (BG) process with trace:original
Follow the process of a trace:original digital bank guarantee, from issuance to termination. (Click each step for details of the process)
- The applicant makes request to the bank for a BG to be issued in favour of the beneficiary
- The bank goes through standard processes and procedures to approve and prepare the issuance
- The BG is approved and ready to be issued
- The bank's trade finance application sends the BG content as PDF and/or standard structured data to the trace:original node, the ‘digital printer’
- A new unique original document is created with the BG content
- The bank adds e-signatures and/or e-seal to the BG document
- Once the BG is issued and signed the bank transfers possession of the digital original BG to the beneficiary. There are several options:
- Pull from bank (e-mail)
- Push to beneficiary (digital key and e-mail)
- SWIFT file act
- Direct node to node
- Upload to preferred platform
- A verifiable and exact copy of the original BG is sent to the applicant
- The beneficiary amends the BG by adding content to the original
- The beneficiary invites the bank to sign/seal the amended BG.
- The bank signs/seals the amended BG, without the beneficiary giving up possession of the original
- The beneficiary invalidates the BG
- A new BG is issued and signed/sealed by the bank
- The beneficiary transfer back possession of the BG to the bank (can add amendment before doing so).
- The amendment is made by the bank (if not done by the beneficiary), then the new version of the BG is signed/sealed and possession is sent back to beneficiary
- The beneficiary sends the claim with a copy of the BG and/or a proof of possession (e-mail)
- The bank checks validity of the BG and/or proof of possession on own node or public notary
- The bank informs applicant and issues own claim against applicant
- The bank pays the beneficiary if it is a valid claim
Anyone can implement and start using trace:original for issuing of digital originals
It is only the one creating a digital original document that needs to be a customer of Enigio. Once a document has been created it is free to use and manage for anyone the same way as a paper document.
Three easy steps to start issuing digital guarantees:
- Define preferred set up, inhouse, cloud solution provided by Enigio or through your current software provider (trace:original is already available through serval software providers)
- Go through simple APIs and connect to your current system. (Standalone GUI is also available)
- Start issuing any type of digital original documents
If you would like to know more about what trace:original can do for you, especially when it comes to:
- Easily get an end-to-end digital bank guarantee process in place
- Reducing lead times to almost zero
- Reduce your cost by 2/3 compared to your paper process
do not hesitate to get in touch, book a meeting or demo.
Schedule a one-on-one call to see how trace:original can help you achieve a fully digital end-to-end workflow of digital original documents, without any changes to your existing infrastructure.
In the call we will go through your specific needs and suggest a matching solution. We will also go through a live demo of trace:original, creating your first digital original document.