ABB , a global technology leader in electrification, robotics, automation, and motion, has successfully implemented an innovative solution to streamline and optimize its trade finance guarantees process. With a presence in more than 100 countries and revenues surpassing $30 billion, managing complex financial operations such as trade finance is a crucial part of ABB’s success. Recognizing inefficiencies in its guarantees management, ABB took decisive action to modernize the process, ensuring greater control, compliance, and operational efficiency.
The Challenge: A Complex, Decentralized System
Historically, ABB has issued a vast number of trade finance guarantees—currently, around 25,000 are outstanding. These guarantees are essential for securing international trade transactions, but their management had become increasingly cumbersome. ABB’s decentralized structure meant it was working with more than 150 banks worldwide. The sheer complexity of managing so many stakeholders made the guarantee issuance process difficult, compounded by banks that were not fully prepared to integrate with ABB’s existing automation tools.
Additionally, the interface used by the company was highly customized, making it difficult to upgrade or adapt to new requirements. As Petra Hunjet Moison, Global Head of Export and Trade Finance at ABB, noted, “The process was painful, slow, and not user-friendly.” ABB needed a solution that could simplify workflows and centralize the process. The aim was also to focus on a smaller group of core banks, around 30, and to find a platform that supported banking communication through the Swift channel.
The Solution: A Centralized, SaaS-Based Platform
To address these challenges, ABB initiated a request for proposals (RFP) aimed at finding a solution that could match these requirements. After careful evaluation, ABB selected a SaaS-based platform.
One of the major outcomes of this project was the consolidation of banking partners. ABB reduced the number of core banks it worked with, simplifying banking relationships and enhancing profitability for both ABB and its banking partners. This consolidation also allowed for greater standardization across the board, with more consistent language in guarantee issuances, although some regional exceptions, like China, or Egypt where local language regulations apply, remain.
Achieving Buy-In: Business Case and User Engagement
Convincing the business to support this transformation was relatively straightforward for ABB. The treasury team developed a robust business case demonstrating how the new platform would deliver significant cost savings, improve compliance, and enhance control. The positive reception from business users was equally important. More than 2,000 users at ABB are involved in the issuance of guarantees, and they were quick to acknowledge the need for change. The old process was not only slow but also poorly connected to the banks, requiring significant manual intervention and customization, which slowed down operations.
By providing a user-friendly platform that offered real-time connectivity with banks and streamlined workflows, ABB was able to significantly reduce the time required to issue guarantees. This improvement enhanced operational efficiency. In order to streamline guarantee issuance, ABB has implemented a system for delegating authority based on roles, allowing members of the company outside the treasury department to perform certain tasks within the guarantees platform. This role-based delegation reduces the need to maintain a list of individual authorized members and ensures that every action within the system is tracked, enhancing accountability and control.
Integration and AI: A Path to Further Innovation
The implementation of this new platform was just the first step in ABB’s broader efforts to optimize its trade finance and treasury functions. The company has also integrated AI into its treasury processes. Instead of requiring extensive training for new team members, ABB introduced a chatbot that can navigate the large volume of internal documentation related to guarantees and other financial operations. This innovation reduces the need for manual training, allowing employees to access critical information more quickly and efficiently.
Key Takeaways: Savings, Control, and Compliance
The successful implementation of ABB’s new trade finance guarantees management platform has already delivered tangible benefits. The company has gained greater control over its financial operations, improved compliance with global regulations, and significantly reduced costs. By centralizing its banking relationships and embracing innovative technologies, ABB has positioned itself as a leader in treasury transformation.
For other companies considering similar projects, ABB’s experience offers valuable lessons: avoid over-customization, focus on user-friendly platforms, and emphasize automation to drive efficiency. Finally, engaging business users early in the process and building a strong business case can make the approval and adoption process much smoother.
ABB’s approach demonstrates how even large, complex organizations can successfully transform their trade finance operations, setting a new standard for treasury excellence.