Article

The decline in letter of credit usage within supply chains is slowing according to a recent survey. The Misys Transaction Banking Survey also suggests a slowing of the trend for supply chains to marginalize bank trade finance products in favour of open account payments. Research into transaction banking trends carried out by Misys indicates that the financial crisis appears to have slowed two recent and related trends dominating the provision of trade services. These are the increasing marginalization of banks in the financial supply chain and declining L/C usage. Over the past year, nearly two-thirds of those surveyed reported an increase in their banks' involvement in their customers' trade business. The financial crisis has made risk mitigation more important to banks involved in the financial supply chain with 90 per cent of respondents stating that this was a focus for them. The survey says the rate at which organisations are turning towards open account transactions appears to be slowing too.