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How Optimus multibank portal eases trade finance transactions processing

This article was originally published on BusinessDay


Victor Eze, 40, is the head of the supply chain unit of one of the largest corporations in Nigeria. While one of his responsibilities is to ensure that the company’s shipments get to their destination, he never looks forward to the long hours and delays that come with doing his job in Nigeria. Sometimes he could spend almost 3 months on one Shipment cycle.

The waiting period of three months is not set in stone. It can be longer or shorter depending on what side of the bed that the government agencies and banks that facilitate import and export trade wake up from. The difficulties range from delays in Customs approvals to regulatory bottlenecks to issues with port logistics, bank limitations on international trade, complexities surrounding the settlement of the underlying trade, and a lack of visibility on transaction status that allows for proactive planning of the next steps.

In his more than 10 years of experience importing goods into the country, Eze cannot recall a moment when the process – from placing the order for goods to obtaining bank approvals, currency conversions, payment, and receiving the goods – was not frustrating and everything worked smoothly. And the longer the process takes, the higher the cost the importer has to bear.

Over the years, stakeholders in the market have sought to reduce the cost burden and the delays by automating most of the processes. This is also known as TradeTech. As a subset of Fintech, TradeTech refers to a collection of financial technology and innovations that make global trade more efficient, inclusive, and equitable. While foreign solutions dominate TradeTech in Nigeria, one local company may be seeking to automate the entire process.

Union Systems, a Lagos-based financial technology company, in 2020, launched a multibank trade finance portal called Optimus. Optimus enables importers like Eze to manage over 80% of their trade finance transactions with partners online, eliminating the need for physical meetings with banks, suppliers, customs, port officials or other value chain stakeholders. It is the first of its kind by a Nigerian company and possibly in Africa.

To import or export goods in Nigeria, businesses must go through a series of processes and receive approvals. This entails initiating a regulatory form on the Nigeria Single Window or Trade Monitoring System (TRMS) portal and selecting an authorized dealer bank. The bank then validates the regulatory forms and receives shipping documents.

An e-Form ‘M’ is a mandatory documentation process required by the Federal Government of Nigeria and it is processed through the Federal Ministry of Finance and the Central Bank of Nigeria, to monitor and keep track of goods imported into Nigeria and to facilitate the payment of import duties. The same goes for the e-Form NXP, which is used to register for export in Nigeria.

Other requirements include regulatory certificates from Nigerian government agencies such as SONCAP (Standards Organization of Nigeria Conformity Assessment Program) or NAFDAC, depending on the items being imported, and other certifications from relevant Nigerian government agencies related to each import or export.

Completing any of these processes could take weeks, if not months, and involve a lot of back-and-forth with bank representatives. While most banks have provided online trade portals, they still lack the necessary transparency into the processing of customers’ trade transactions both within and outside the bank. Another challenge is that the features available are typically limited to the areas in which the bank does business. As a result, users that transact with multiple banks would need to log into several bank portals one after the other to complete all their transactions.

Union Systems’ solution, on the other hand, adopts a multi-platform approach, guaranteeing that all the steps to complete a process, as well as all the stakeholders that a user would need to contact, are located within the portal. In this regard, the portal provides access to a variety of banks, insurance providers, logistics companies, regulators, and other entities. This means users would not need to log in and log out to access the different relevant authorities. There are also real-time feedback features that allow users and service providers to communicate.

While there is a single-bank version of Optimus, the multibank version is the one that grabs the most attention. This is mainly because larger corporations with multiple bank partners are looking to replace proprietary bank portals and formats with multibank trade finance portals to improve visibility on their trade finance transactions. At the moment, Optimus is the only solution in Nigeria that has the capability of meeting the large needs of these big corporations. 

“The shift by corporates to multibank portals is a global trend in the international trade community, and we’re proud to be at the cutting edge of it in Africa. Top banks and corporates from around the world are forming consortiums to streamline trade transaction processing. We’re excited to partner with more banks and stakeholders in this space to provide superior customer service to their mutual customers and promote easy facilitation of trade finance activities,” said Chuks Onyebuchi, Chief Executive Officer, Union Systems Limited.

A survey by the World Economic Forum finds that the integration of technologies in trade finance can boost efficiency in trade facilitation and improve the supply chain. It could also lead to new innovation around products and services, and the inclusion of smaller players in the trade.

A portal like Optimus can help corporates get better bargains from banks given they can see all their banks, their rates, and transaction charges within one portal. Beyond monitoring their banking transactions, corporates can process and manage all their trade transactions without visiting the banks and have a single view of their overall credit line utilization at group levels, promoting transparency and efficient management of their trade transactions. They can pay and print payment receipts of Customs duties and NESS fees and manage all trade payment obligations across domiciled banks. Corporates can engage with their suppliers online during the initiation of the LC draft with the bank. They can also track their shipment from any country of supply to Nigeria and easily know the expected arrival date of their goods ahead of time.

“The single most important value is the convenience of doing business without having to jump from one place to another. Your transactions are transparent to you, and you can properly evaluate the service delivery of all your banks. Optimus puts the corporate in charge of their trade transactions,” said Segun Aribisala, Product Manager, Union Systems.