Annual discussion on the latest developments on trade finance, in Miami on 3-6 April.

1. A member of MUFG, a global financial group
BPO Sub-group
Presentation
MUFG Bank, Ltd.
MUFG Bank
Transaction Banking Division
3 April 2018

2. Chair
Michael Quinn, J.P. Morgan
Participants
20 experienced trade finance professionals nominated by the national
committees
• Representing banks, Fintechs, Consulting firms, Service Providers
• Veterans of the development of the TMA(Transaction Matching
Application) and BPO(Bank Payment Obligation)
• Represent the major participants in “real” BPO transactions
BPO Drafting Group
2

3. 3
Objectives
 Make the BPO more relevant to the industry
Background
 With the outbreak of DLT(Distributed Ledger Technology) &
Blockchain applications, there is a further need for a form of
settlement and risk mitigation.
 Our view is that BPO can serve as a framework for risk mitigation in
those emerging technologies.
Tasks
a. Evaluate how BPO meets the current business drivers in trade
finance
b. Revise URBPO to make it more effective in the current
environment and to provide a framework for its application in new
technologies
The Objective of the BPO sub-group

4. 4
1. Marketing and Awareness of BPO in its current state
Tasks
a. Publish materials through to the National Committees which
are helpful to membership to understand and implement BPO
b. Leverage industry organizations to communicate to the
banking community and the corporates who participate in global
trade the merits of BPO and how it assists in digitization of
Trade Finance.
c. Making members of the working group available to national
committee members to assist in their evaluation and
consideration BPO
The Scope of work of the BPO sub-group (1/3)

5. New BPO White Paper coming soon…
The Bank Payment Obligation (BPO)
pushes the evolution of trade towards
digital handling of data, providing
potential for mitigating payment risk,
allowing faster and more flexible
processing and increasing capital
availability by financing.
The new BPO White Paper will provide
details and insights about:
What exactly is the BPO?
How does the BPO work?
An enabling framework for Supply Chain
Finance
Market Adoption: hurdles and targets
Benefits of the BPO
Future potential of the BPO
5
Coming soon…
For further information please contact:
Angela Koll, Commerzbank AG Frankfurt
Specialist Product Management
Trade & Supply Chain Finance & Innovation
Phone: +49 69 136 43706/ M: +49 162 2554362
email: angela.koll@commerzbank.com

6. 6
2. Revision of URBPO
Objective
 To include the roles and responsibilities of buyers and suppliers
addressing a current deficiency in URBPO today.
 Revision of URBPO to address conditions within DLT technologies that
create obligations
Tasks
a. Review the existing URBPO to recommend revisions which will include the buyer
and seller
b. Work with industry initiatives that are exploring DLT/Blockchain to define “conditions”
in the DLT enabled supply chains which would create an obligation to pay
c. Publish a framework of a revised URBPO which can guide the future developments
of digitized trade without delaying the move from DLT programs in market
d. Complete a revised URBPO sufficiently vetted and approved by nation committees
The Scope of work of the BPO sub-group (2/3)

7. 7
3. Address data standards
Objective
 To improve the TMA’s effectiveness and meet the short term needs
of URBPO and identify possible implications of emerging
technologies on the rules
Tasks
a. Recommend and incorporate changes to TMA (Currently SWIFT
Trade Services Utility) which address current limitations which have
inhibited market acceptance
b. Based upon the learnings from DLT/Blockchain of “conditions”
which create obligations among the parties incorporate data
standards that reflect these
The Scope of work of the BPO sub-group (3/3)

8. Latest BPO Trends
(Data from SWIFT)

9. Adoption of
ISO 20022
for BPO in
Trade
Finance
27Banking groups live on BPO / TSU
22Banking groups testing BPO on TSU
194
Banks (BIC8) reachable on
TSU
85
+
Corporate relationships live on BPO
80Banking groups reachable
on TSU
18 / 2018 of the top20 trade banks (*) are
reachable on TSU to process BPOs
68%68% of the top50 trade banks (*) are
reachable on TSU to process BPOs
51Countries reachable on TSU
(*) ranking based on Cat 7 traffic
supplychain@swift.com

10. 10
ISO 20022 Messages (live) BPO/TSU Traffic Evolution
SWIFT Trade Messaging Trend
Source: SWIFT
Watch
FY 2016 FY 2017 Growth
11,539 13,882 +20.30%
0
200
400
600
800
1 000
1 200
1 400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ISO 20022 messages (live) for the BPO/ TSU
2016
2017

11. supplychain@swift.com
Chemicals
General Retailers
Personal Goods
Mining
Technology Hardware
& Equipment
Automobiles & Parts
Food Producers
ISO 20022 for BPO brings value in various industries

12. 27 banking groups live on ISO 20022 for the BPO
Including 7 of the top15 trade banks (*)
(*) ranking based on Cat 7 traffic
supplychain@swift.com

13. Partner/client
name/logo here
(edit on Master)
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