The third and final bank and founder member of Proponix, the US-registered provider of web enabled trade finance services is set to outsource its letter of credit (L/C) processing functions to the company it co-founded.

"Bank of Montreal will migrate their business soon, and as they come onto our platform, it will move to a 24/7 processing capability," president and chief executive of Proponix told delegates at a recent trade finance conference in London.

Outsourcing banks wanted

Bank of Montreal will then join fellow founders, ANZ Banking Group and Barclays Bank, in outsourcing its L/C processing functions, in outsourcing to Proponix, whose fourth and final founder is trade finance solutions provider, American Management Systems (AMS).

ANZ and Barclays have so far outsourced over US$12 billion in L/C processing business to Proponix. Once all three founder members have found their way onto the Proponix platform, the next task will be to attract banks without a commercial interest in the operation to obtain the critical mass that so far has proved elusive for purveyors of e-payment mechanisms.

Hong Kong hub

In February 2002 Proponix opened its Hong Kong service centre, seen by the company as a hub providing processing functions to financial institutions in key Asian markets. Barclays has already migrated its L/C processing services to the centre and ANZ is in the process of doing so.

The service centre provides L/C reissuance services. Bank clients can bring export documents such as L/Cs to the service centre to be catalogued, scanned, imaged and queued into the system. From there, documents are processed electronically at Proponix processing centers in Melbourne and Toronto.

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