Saving time
With digitised and streamlined process, the opportunities for saving time are increased, at least in the actual trading part of the transaction. The ancient art of negotiating can still take some time though.
“Digitalising and streamlining the process saves time and is not dependent on location. However, the amount of time you save is dependent on the case; the transaction is quick, the lengthy part is getting a deal, which can often take 6 months. The counterparty risk decreases significantly, as the counterparty’s bank helps to divide the risk. From the buyer’s viewpoint they can confidently pay for the goods, without worrying about substantial bank guarantees.”
“The really big plus on both the buyer and seller side is that you can agree on more flexible payment terms. We are a small player which means that our projects are big for us but small for our customers. A 200k to 500k EUR order is big for us but can often be a routine daily order for them. It requires a lot of planning from our side while it’s just one paper amongst many for our counterparties. We ask for a 30% pre-payment and as large companies, our customers often don’t understand why. If they used a portal like this, it would make the process and making business quicker and would create more trust,” says Ismo Nironen.
Increasing the bank network
Collaboration with the other banks has made it possible to create a large European trading ecosystem with a critical mass of customers. The intention is to bring other European and international banks onto the we.trade platform in the future in a collaboration that will benefit all companies engaged in trade internationally.
Patrik Zekkar says: “With we.trade we have significantly reduced the financial risk of conducting cross border trade. This technology is a real breakthrough for small businesses in particular as it enables them to trade with other businesses that they may not have been able to trade with before due to risk and uncertainty. This platform is a controlled and transparent environment that removes the unknowns from the trading process and creates trust. However, it’s not only the technology that protects customers and gives them visibility – a rule book and a legal structure has also been put in place that stipulates the conditions around submitting transactions in we.trade.”
Ismo Nironen concludes: “The we.trade portal is simple and you don’t need to be an IT specialist to use it. If you can type the required information in a field and press ‘OK’ you are good to go. This is indeed interesting and will definitely decrease the step to making international trade. It will work really well in Europe, where the big partner banks are present. For us, certain Latin American countries are challenging, since they have different ways of conducting business, which means you need to adapt or skip the business case. If the right bank in Peru was in the we.trade network we would immediately get new business. It will be really interesting to see what happens next!”
Read more about we.trade at Nordea or contact txbmarketengagement@nordea.com