Corporations selling high-value goods or projects are typically required to provide guarantees to their customers, to financially protect the fulfillment of the contract. The guarantee liabilities impose an off-balance sheet risk for the corporation, and therefore the process relies heavily on tightly defined structure and involvement of individuals with appropriate authorization.
Guarantee issuance is one of the deal-breaking final stages for closing a business assignment, and trade finance as a supporting organization must be able to process the issuance without unnecessary delay. Without a centralized solution, the management and tracking of the liabilities generated in different parts of the corporation is a tedious task. A fully electronic guarantee management process also offers continuous visibility into the guarantee statuses and supports the timely release of guarantees to avoid unnecessary bank fees.
Business units can apply for bank and corporate guarantees from regional or global Trade Finance departments and follow the application status online.
Users fill in and submit the application form online to treasury, who can then process and issue the guarantee.
The solution supports both a centralized model, in which units apply for guarantees from the treasury, and a decentralized model, in which units report existing guarantees into the database.
Before handling, the guarantees can be required to be authorized by a selected number of control users.
Users can attach related documents to guarantee applications and reported guarantees.