Nasdaq listed S1 Corporation has announced the latest version of its Internet-based offering for managing international trade finance operations for the financial services industry.

The developers say that S1 Trade Finance 2.1 has been developed to meet the growing demand for open account processing functionality, but it also features enhanced capabilities for creating and reporting on trade documents from purchase order and letter of credit (L/C).

Integrated

Because all of these things are combined in one integrated system, the company claims that its latest offering enables banks to reduce processing costs, increase the speed and accuracy of information exchange and improve overall trade cycle time.

According to a statement issued by the company, nine out of the top 25 US banks, as well as several top Canadian and global banks are currently using S1 Trade Finance and plan to migrate to the new version.

L/C improvements

One of the improvements S1 Trade Finance 2.1 over its forerunner is the ability to automatically create an L/C-based upon purchase order data entered or imported into the system.

Although improvements to L/C functionality feature in the new version, the developers appear to be stressing its open account processing capabilities most. These include the ability to create applications and amendments, make inquiries, and receive presentation notifications, such as discrepancies.

Open account trend

S1 Trade Finance says that this emphasis responds to increased demand for open account over L/C facilities and quote research findings by TowerGroup to back its claim.

"The Trade Finance market is in a new phase, with companies seeking to transfer more and more activity to the Internet in order to create greater efficiencies," according to TowerGroup.

"Part of that transition involves a pronounced shift from documentary L/Cs to open account transactions. This trend is due in part to the reduction in the number of trading partners, and their increasing familiarity with each other. With this consolidation in the industry, banks must obtain new business from other banks by using better technology, lowering prices, and offering global support combined with the ability to process open account transactions," claims the US-based financial services research and advisory group.

Pick and mix

Trade Finance 2.1 is offered as part of S1's modular Business Solutions along with several other products that include a purchase order processing system developed in late 2002 in conjunction with Bank of America.

According to the company, customers can choose each component of the solution for individual functionality or implement the entire suite of applications.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.