Commerzbank Processes First BPO Live Transactions in Austria
The buyer, a customer of Commerzbank AG Austria, is TAM-Europe d.o.o., located in Maribor, Slovenia, one of Europe’s largest bus and commercial vehicle manufacturers. The suppliers are MAN Truck & Bus AG, a leading commercial vehicle manufacturer headquartered in Munich, and ISAF Bus Components srl, an Italy-based supplier and customer of UniCredit.
The BPO is an irrevocable undertaking of the buyer’s bank to the seller’s bank to execute payment on maturity. This undertaking is based on the successful matching of agreed electronic trade data on SWIFT’s Trade Services Utility (TSU) platform.
Companies are increasingly recognizing the benefits of the BPO, which include more efficient, flexible and faster communication and handling of transactions. With successful matching of purchase order and shipment data, the BPO can also serve as an enabling framework for supply chain finance – optimizing liquidity and working capital, and minimising payment risk.
“With the first-ever BPO transaction in Austria, we’re front-running the digitization of the trade finance business,” said Enno-Burghard Weitzel, Head of Product Management Trade Services at Commerzbank. “These client-centered digital services are the basis of our enhanced modernization efforts. By focusing on new digital trade finance services – like distributed ledger technology and blockchain-enabled offerings – we are paving the way for the supply chain of the future.”
“As an innovative company, TAM-Europe is very interested in adopting new technological solutions for optimising processes,” said Bryan Zhao, CEO of TAM-Europe. “With the BPO, we are following the digitization trend. We see it as a new payment instrument that can be a successful supplement to open account transactions and letters of credit. Gradually, we aim to handle all our trade transactions with the BPO.”
“We appreciate the fast and cost-saving BPO processing,” said Elke Endres, Treasury / Export Finance & Insurance, MAN Truck & Bus AG, “which supports us in our ambition to simplify our trade finance transactions.”
Commerzbank first went live with the BPO in October 2014. The bank has since increased its BPO business, settling transactions with partner banks for multinational companies, large corporations and SMEs, both within Europe and overseas. In 2016 the bank facilitated the first BPOs in the UK and also processed the first live BPO transaction between Germany and China.
Global Traders on the Move: Latest Leadership Update