Absa, recent winners at Global Finance’s 2020 World’s Best Corporate/Institutional Digital Banks Awards in Africa, is transforming trade on the continent.

The group is broadening access to trade finance by digitising its trade finance offering, ensuring increased trade opportunities that boost economic growth in Africa.

“Trade is critical to Africa’s growth,” says Michelle Knowles, pan-African head of trade finance product at Absa Corporate and Investment Bank. It has been hindered by a lack of access to trade finance, despite growing demand for products that give importers and exporters multiple ways of financing trade transactions and a range of proven risk mitigation options.

Trade finance gap set to widen

“There is demand for trade finance across the region,” Knowles says, “but supply is not keeping up”. She says the estimated trade finance gap in Africa is between $110bn and $120bn.

“Only a quarter of Africa’s trade finance needs are being met.”

She says the trade finance gap is likely to widen in the next 18 months, leaving businesses facing an uphill battle to access the resources and support they need to fulfil their trade needs.

“Trade finance is an integral part of Absa’s business. We are accelerating our efforts to meet the demand for trade finance and be a key provider of trade finance on the continent to enable the free trade agreement,” Knowles says. This includes digitising trade finance products.

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African experience and digitisation

With its experience in Africa and its digitisation journey, Absa is well placed to make good on its commitment to grow trade.

“Our experience in Africa and understanding of trade finance means we can deliver an accessible trade finance product,” Knowles says.

The group launched its online trade finance portal, Trade Management Online, in 2019, and is busy with other automation initiatives focused on operations and services to further reduce costs, improve efficiency and provide a consistent client experience across all regions.

The portal recently won Global Finance’s Best Online Portal in the World’s Best Corporate/Institutional Digital Banks in Africa 2020 round one award. The bank also won the regional award for Best Trade Finance Services.

Trade Management Online offers the bank’s corporate and business banking clients a comprehensive range of functionalities. Clients can initiate, receive and manage the full life cycle of trade finance products and services through the channel, including:

  • letters of credits;
  • bank guarantees;
  • import and export trade loans; and
  • collections.

Clients can also communicate via online messaging with technical experts in the bank through the platform.

Trade Management Online is available to Absa clients in the group’s African markets including Botswana, Mozambique, Zambia, Tanzania, Kenya, Mauritius, Uganda, Ghana, Seychelles and SA.

The portal is accessed through Absa’s best-in-breed digital platform, Absa Access.

“Our clients can now have a single view of all their trade and cash products — a unique proposition in the markets we operate,” says Randy Mavunda, head of digital trade finance operations at Absa.

Mavunda says the system is also multi-tenancy, which means clients have a single view of all their transactions in all the markets they trade in. As with any good digital offering, there is reduced paperwork and a shorter turnaround time. Absa has been on a journey to digitise and make its products easy for clients to access and use.

“We invested in a multiyear programme and developed a common framework to make sure we have a workflow system in place so our online channel can deliver a consistent and reliable client experience across the value chain,” Mavunda says.

More efficiency ahead

The team is now taking the next steps on their digital journey in which Absa will leverage data and intelligence, including automating key processes. Mavunda says an example of this is automating the checking processes regulation requires.

“We are working on initiatives to leverage the data for decision support using artificial intelligence (AI) and deep learning techniques. This enables us to be better at managing and monitoring fraud without relying heavily on manual controls,” he says.

“Using our AI models we can monitor for anomalies proactively and escalate these to management for a decision, making our trade platform safe for our clients and the bank.”

He says the bank is also focusing on building models to offer better decision support and improve on the overall turnaround times for processing trade products. “This will allow us to get ahead of the curve, and be more adaptive to changes while keeping the costs to serve low.”

Knowles sums up the bank’s trade finance products and platform in three words: efficiency, convenience and protection.

“We recognise the shift towards digital trade finance. Our award-winning portal and products meet our clients’ and the continent’s trade finance needs.”

This article was paid for by Absa Corporate and Investment Banking.

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