The TSU provides a collaborative central matching utility for banks to provide innovative services to their corporate customers beyond the settlement end of the transaction, including for financing, risk mitigation and associated value-added services. The two banks are using it to service both Chinese and Japanese customers and signed the agreement with the aim of using the TSU for more customers, based on the benefits they have already seen.

"Payment service and collection with the TSU lets us offer trade settlement to our corporate customers that is faster, less burdensome in terms of document preparation, saves cost and is more compliant to local regulations," said Takeo Sato, General Manager, Trade Business Division of Bank of Tokyo Mitsubishi UFJ.

"The interbank agreement and the signing not only clarifies the business rules and working models for using the TSU between the two banks, but also builds solid fundamental for the TSU commercialisation," according to Cheng Jun, Director, Corporate Banking Unit (Global Trade Services), Bank of China, "and it's critical to the innovation and promotion of the TSU business in China and over the world."

Michael Cheung, Head of China for SWIFT, notes that "the agreement is a milestone in Asia and reflects the commitment of our industry leaders to move the Asian and indeed global community forward in terms of automated, standardised trade settlement. " The two banks are both members of the Trade Services Advisory Group, which is responsible for advising SWIFT on trade services and trade settlement issues.

According to Jackie Keogh, head of global transaction banks and supply chain management at SWIFT, "The world economy relies upon the financing of trade to keep the wheels of commerce turning, and now more than ever the financial services industry is in need of innovative solutions to close the liquidity gap in trade finance and ultimately stimulate growth."