S. African Bank Gets Tool for Trade Finance

First National Bank of Southern Africa has licensed trade finance software and services from American Management Systems Inc.

The deal, terms of which were not disclosed, calls for American Management Systems to connect the Johannesburg-based bank's back-office trade systems with its corporate customers.

Bank officials said the deal will give companies based in South Africa realtime linkages with about 5,000 correspondent banks in more than 160 countries.

The Fairfax, Va., software and consulting firm recently completed the first phase of the deal by installing its back-end system, called Tradeline, which automates tasks associated with processing letters of credit.

The move by $21.1 billion-asset First National is indicative of the international push to reduce paper-related trade finance costs.

The estimated annual value of goods traded internationally stands at $3 trillion. About 7% of that total is spent on paper-related expenses, according to the Bolero Association, a New York-based association for companies involved with electronic trade finance.

"Banks are looking to enhance the automation of their back-office functions," said Daniel Wunderlich, vice president of American Management, which is an information and technology consulting firm.

American Management's Tradeline product, under a year old, is used by about 40 customers, including corporations and banks.

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