Wachovia Bank, N.A., today announced the launch of TradeXchange, a secure, Web-based messaging platform designed to provide greater visibility throughout the financial supply chain from purchase order delivery through invoice settlement.
"As one of the first banks in the world to initiate letters of credit over the Internet, we continue to focus on innovation and technology - particularly relating to the evolution of the financial supply chain," said Steven Nichols, managing director and head of Global Trade Services in Wachovia's Global Financial Institutions and Trade Services division. "Buyers, sellers and their banks must navigate an increasingly complex international trade environment, including new challenges created by the movement to open account transactions. TradeXchange will facilitate this process by providing critical supply chain tools in a fully collaborative and real-time environment."
Wachovia designed TradeXchange to be intuitive and easy to use, while adding enhanced functionality, including facilitating pre- and post-export financing, indemnities for buyer default, purchase order delivery/acknowledgement, document preparation, electronic document management and document compliance.
Wachovia's philosophy is to be a partner supporting its global financial institution clients, as opposed to competing with them in their geographies. In keeping with this philosophy, Wachovia will leverage its leadership in trade outsourcing to provide TradeXchange to its international correspondent banking clients on a private label basis.
"TradeXchange does not just Web-enable old processes," said John McFadden, managing director and head of Wachovia's Global Trade Services' product management. "TradeXchange allows a seller's local bank to collaborate online and to provide pre- and post-export finance to its customers. Similarly, a buyer's bank can benefit by providing value-added purchase order delivery, credit indemnities and document compliance management. Our goal in providing TradeXchange on a private label basis is to re-intermediate our partner banks into the financial supply chain."
William Fitzgerald, managing director and head of Wachovia's Global Financial Institutions and TTrade Technology group, states that, "Building TradeXchange is one more example of leveraging our Corporate and Investment Banking technology platform to provide innovative trade solutions to our correspondents. TradeXchange represents a key component of a major strategic development initiative that eventually replaces the core platform with a GRID-based Service Oriented Architecture framework called TradeWorks. The combination of TradeXchange and TradeWorks will enable Wachovia and our trade insourcing partner banks to offer a highly extendible array of trade finance products to their respective customers."
Separately, Wachovia today announced the opening of a remote check image capture site in Korea.
Clients can now deliver their U.S. dollar check deposits to the local site, where Wachovia scans the checks and transmits the images to the U.S. for clearing.
"The launch of our Korea processing site demonstrates Wachovia's commitment to expand our suite of image services and build our global capabilities," said Jim Ho, managing director and head of Greater China and OECD Asia. "Placement of this capability in our Korean branch allows us to reduce the transportation costs associated with this important product line, while enhancing our position as a major player in the global market."
A leader in U.S. dollar check processing, Wachovia has been at the forefront of the U.S. banking industry's move toward image exchange, building its own image-exchange platform and applying image technology to gain processing efficiencies throughout its check operations.
The Korean image capture site complements Wachovia's Remote Deposit Capture (RDC) and Remote Image Cash Letter (RICL) solutions. These services use image-based technology to enable clients to electronically capture and transmit their U.S. dollar check deposits, allowing the client to truncate the original checks at the point of capture. With RDC, clients use a desktop scanner and Wachovia software to scan and transmit their check deposits to the United States for clearing. Clients with in-house image capture technology can opt to create x9.37 image clearing files for direct transmission to Wachovia through the RICL service. Clients across 33 countries now use Wachovia's RDC and RICL solutions.
As part of its comprehensive image strategy, Wachovia is interested in the judicious deployment of image sites where they can best serve clients. "This site is an important step forward in our efforts to extend the cost savings and efficiencies associated with Check 21 to clients everywhere in the world," said Jennifer O'Keefe, vice president, Wachovia Treasury Services. "The thrust behind Check 21, and the image solutions it generated, was to eliminate transportation cost and streamline processing for efficiency and accelerated funds availability to the client."
Following The Check Clearing for the 21st Century Act of 2004, popularly known as Check 21, Wachovia rapidly introduced a series of image-based services—including RDC and RICL—to extend associated benefits to its clients. Wachovia also was among the first to receive an RICL file via SWIFTNet FileAct, successfully piloting the service with a bank client in Spain in 2005. In August 2007, Wachovia's Treasury Services division announced it had reached the $1 billion mark in Remote Deposit Capture (RDC) volumes processed in one day.
"We can't ask for anything better than RDC," said Anne Doobarry-Clement, senior manager of Operations, Treasury/International Trade Centre for First Citizens Bank Limited, based in Trinidad and Tobago, West Indies. Doobarry-Clement has used Wachovia's RDC solution since 2006.
According to Doobarry-Clement, the bank's U.S. dollar check processing costs have decreased by at least 60% in the first year of implementation, and Doobarry-Clement expects savings to reach 80% by next year.
Additional benefits to First Citizens Bank include the elimination of courier expense, time savings on deposit preparation, and accelerated funds availability. An unexpected benefit has been a reduction in deposit errors related to multicurrency checks. Before RDC, these items might inadvertently have been included in a paper U.S. dollar check deposit sent to the United States for clearing. This would result in a loss of funds of three to four days until the errant items were returned to Trinidad by courier for reprocessing. With RDC, a multicurrency check is rejected immediately from the deposit batch in Trinidad.
"Wachovia has an unwavering commitment to staying close to our clients, which is reflected in the continued expansion of our global capabilities," explains Christine Jenkins, director of Global Payment Services in Wachovia's Global Financial Institutions and Trade division. "Our clients continue to seek cost-effective and efficient solutions for their US dollar payment needs and we want to ensure we are where they need us to be, when they need us to be there. As our clients' needs evolve, our goal is to continually look for new ways to leverage our services to facilitate their success."