ABN AMRO Bank among the banks that have successfully transitioned to new structured and more complex message formats for Guarantees and Standby Letters of Credit

Norwegian software vendor Commercial Banking Applications AS (CBA), has confirmed that its IBAS GTF – Global Trade Finance Factory solution – enabled a seamless transition for all clients to the new structured message formats included in the latest SWIFT Release 2021. ABN AMRO Bank was one of several banks to successfully complete the switch over in November 2021 using CBA’s IBAS solution.

“The changes involved in this transition were numerous and complex – affecting the whole trade finance transaction flow from the customer front-end, through to back-office workflows, third-party transaction monitoring, quality control and master data management – making it essential to work closely with our technology partner CBA to plan and test all workflows in advance,” said Frans Westdorp, Product Owner Trade Finance Core Systems, Reporting and Enablement at ABN AMRO Bank. “This was the biggest change in trade finance ever, so we’re absolutely thrilled that everything went so smoothly, both around the immediate cutover date and in the weeks that have followed.”

After first making a preliminary version of the new IBAS release available to IBAS user banks in a cloud environment, CBA then released its IBAS GTF solution in early June, allowing additional time for testing in advance of the planned SWIFT changes. Banks needed to ensure all back-office applications, front-end systems, APIs and other interfaces were prepared for the move away from unstructured messages to more complex and structured message types that allow for increased automation and straight-through processing.

Rolf Hauge, CEO and founder, CBA, explained: “ABN AMRO Bank’s global trade finance operations – supported by CBA’s IBAS GTF platform – are very sophisticated and highly automated. It was critical the bank could seamlessly transition to SWIFT’s new complex message types with no impact on its day-to-day operations. The bank uses our software on a multi-country basis, and I’m pleased to say that its customers around the world, equipped with our front-end, have not experienced any impact in how they conduct their trade finance transactions. Even if the result of a Guarantee or Standby LC request is a highly structured and complex SWIFT message, it is important that the complexity does not burden the bank’s customers or employees. IBAS does all the heavy lifting in terms of automatically translating customer requirements for Guarantees and Standby LC requests into the required formats.”

IBAS GTF optimises the business logic associated with handling the new requirements for Standby LCs, which must now always be issued, advised and amended using the same message type as Guarantees.  The front-end customers are guided through the submission process, helping them understand the nature of the Standby LC transaction and how it differs to a Guarantee. Similarly, at the back end, bank staff benefit from software that’s not only SWIFT compliant, but also tailor-made in line with Standby LC market practice. This makes the entire process more transparent and straightforward for all parties involved.

“To sum up, IBAS GTF gives ABN AMRO Bank the best of both worlds: simplicity – not impacting the customer or the bank’s operations; and complexity – allowing the bank to increase automation and explore opportunities associated with more structured message types. Usually, there is a trade-off between simplicity and complexity in software solutions, but thanks to the sophisticated business logic in IBAS we are delighted to have been able to achieve both,” said Westdorp.