BankMuscat, named as Oman’s Bank of the Year*, is Oman’s largest commercial bank, providing a wide range of consumer, private and corporate banking services. International trade finance forms a major part of the bank’s Corporate Banking activities, since BankMuscat now dominates Oman’s trade finance sector, where it commands a market share of more than 40%, following its merger with Commercial Bank of Oman in December 2000. To support its expanding operations, the bank chose to adopt the latest technology, in order to improve the services offered to clients.
Musallam Al-Shukairy, Assistant General Manager, Trade Finance & Overseas Credit, explains, "The implementation of a new system using the latest technology was a cornerstone in our strategy to enhance customer service. We wanted to replace our long-serving, in-house developed software with a solution that would increase the efficiency of our operations and raise productivity, to ensure we could respond quickly to customer requests. At the same time, we needed a solution that could be integrated with our core system, as well as giving us the potential to introduce new delivery channels in the future, to ensure we retain our competitive advantage in the marketplace."
During the evaluation process, BankMuscat reviewed a number of different product offerings, including China Systems’ Eximbills. Staff from the bank’s Trade Finance & Overseas Credit Department were involved in the assessment and decision-making process, which included a number of reference site visits. The bank’s final selection of Misys’ Trade Innovation as its preferred trade finance solution was based primarily on the system’s ease-of-use and speed of implementation.
Musallam Al-Shukairy says, "One of our objectives was to ensure that our customers would benefit from the investment as soon as possible. Another reason for our choice of Trade Innovation was that it would provide a high degree of integration with our core banking system. Trade Innovation met our requirements on both these fronts, having proved easy to implement and since it is a very open system, offering us the integration potential we require."
"Trade Innovation is supremely user-oriented and is designed for business users rather than I.T. staff, having been developed in conjunction with banks which are leading players in the trade finance sector. I believe that our users’ involvement in the implementation process was the key reason for the success of the project," he continues. "While the bank’s I.T. department took responsibility for the underlying system infrastructure, the main implementation work was carried out by the department’s business users, in addition to their normal job responsibilities, with assistance from a Misys Business Consultant on a part-time basis."
The implementation process took just six months to complete, following the finalisation of the contract between BankMuscat and Misys at the end of November 2000. Trade Innovation incorporates applications to process Letters of Credit, Collections, Guarantees, Bills Financing and Syndications, and supports the full range of the bank’s trade finance business. Misys also worked with the bank’s staff to develop an interface based on TCP/IP protocols to integrate Trade Innovation, running on the Microsoft Windows NT platform, with BankMuscat’s Unix-based MIE core banking system.
Musallam Al-Shukairy is justifiably proud of his department’s achievement. He comments, "Our initial business analysis shows that there has been a significant improvement in processing times." In fact, a preliminary assessment of benefits after the first three months of operation shows that the average volume of transactions being processed has increased by more than 50%. At the same time, the turn around of trade-related transactions such as opening Letters of Credit, Guarantees and Collections are being completed in just 25% of the time taken previously, which represents an exceptional increase in productivity.
"Since Trade Innovation is interfaced directly to both SWIFT and the bank’s core system, the laborious and time-consuming process of posting entries manually has been eliminated. Outgoing payment messages can be transmitted directly to the SWIFT network, while incoming payment messages can be mapped directly to the appropriate transaction. This facility has eliminated the need for manual intervention and has dramatically reduced the duplication of effort previously involved," Musallam Al-Shukairy comments.
He goes on to say, "All the documentation produced by the system, such as customer acknowledgements, advice notes, progress ‘chasers’, Guarantees and discrepancy notices, can be tailored to the bank’s precise specification and produced to a uniformly high standard, enhancing still further the bank’s image in the eyes of its clients. Trade Innovation’s unique workflow mechanism has also assisted in improving the overall efficiency and working practices of the department, and enabled us to provide a consistently high level of service to our clients."
Currently Trade Innovation is located at the bank’s Head Office in Muscat, although there are plans to install a network to link the system with BankMuscat’s major regional branches in the future. "We are also planning to implement an e-banking front-end to Trade Innovation," Musallam Al-Shukairy points out. "This will provide corporate clients with internet-based access to the system and offer them the facility to initiate requests or track the progress of Letters of Credit, as well as making information available on-line."
He concludes by saying, "Misys’ local presence in the Gulf was a major factor in our choice of solution, and the excellent relationship and co-operation between the two organisations contributed greatly to the success of the project. We are also comfortable with the level and direction of Misys’ ongoing investment in the product, which will enable both us and our customers to benefit from technological developments and new industry standards in trade finance, such as BOLERO."