A new company plans to offer global banks an online option for the processing of complex international transactions, and is promising speed, flexibility, and the potential to lower costs.
Proponix, a joint venture of Bank of Montreal, Barclays Bank PLC, Australia and New Zealand Banking Group, and the software firm American Management Systems, wants to capture a share of the estimated $10 billion market by providing the back-end processing for letters of credit guarantees, bankers acceptances, and reimbursements, while allowing banks to manage the front-end relationships with their corporate clients.
Technology is global trade banks biggest challenge, Proponix president and chief executive Bill Graham said in a Tuesday conference call introducing his company. These banks are confronting increasing demand from corporate clients who want more functionality and more Internet capability to make this job less paper-intensive, he said.
Giving an example of how Proponix could save time, Mr. Graham said a client could apply for a letter of credit at its own banks Web site, and the information would be transmitted to Proponix over the Internet.
Outsourcing these transactions avoids the risks of investing heavily in an in-house processing system, Mr. Graham said. Its one thing to write a substantial check for a piece of technology, but is it the right technology?
Since the prices for in-house technology systems are rising, he said, banks need flexible, neutral solutions so that they can join together to share technology.
Proponix joins Bolero International, ec-Finance, and TradeCard in offering Internet methods for the execution of global trade tasks.
Executives at Proponix and the three bank companies emphasized that Proponix will operate independently. Currently, Mr. Graham said, some banks outsource these transactions to other banks, and that can make for tensions with customers. Proponixs independence, he said, insures against conflicts of interest and also allows banks to brand their trade transactions fully.
Proponix is conducting a pilot test with an Australian bank. Mr. Graham said he expects his companys services to be fully functional by yearend.