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At Enigio, we have not found any digital solution in the market that can carry and exchange information as a paper can, and this is one of the reasons why we have developed trace:original – a digital original document in its true sense.
With trace:original, it is possible to replicate the paper process making it fully digital from start to end and for all parties. It is the final and missing piece of the puzzle.
The only requirement for any party coming into contact or dealing with a trace:original document is that they must have a computer and access to the internet – nothing else.
For the party issuing the digital document, only three components are needed, and the first two are usually already in place:
- A PDF or any digital content
- An electronic signature, e.g. DocuSign
- A digital original document, trace:original
Full digitalisation of bank guarantees (or any other document) is that easy.
How bank guarantees work today
There is currently no one way on how to issue digital bank guarantees. Today, bank guarantees are predominantly issued on paper or through SWIFT, if it is a bank-to-bank guarantee.
Occasionally, guarantees are also issued as electronically signed PDFs or on closed platforms.
The multiple different processes applied for issuing guarantees create problems for all parties in the process:
- The applicant has no visibility over lead times for issuance and delivery to the beneficiary, so it is not possible to agree with the beneficiary on a specific standard format, and the termination or release process is often lengthy.
- For the bank, the paper process creates extra lead times and costs, and an end-to-end digital process is often not possible.
Far from all beneficiaries accept PDFs, and should not, as they are not original documents.
Platform solutions are challenging due to the fact that, whichever platform is selected, it will not reach the required network, as it is not feasible or even possible to onboard all.
- For the beneficiary, the paper process creates several operational and data management challenges and is risky and costly.
The simple PDF is not a viable original document, and it is not feasible to require all banks to be on the specific platform preferred by the beneficiary.
The applicant can get visibility over lead times through the process, and can provide the input data content and format for the guarantee at the very start.
The applicant and beneficiary can also agree on a specific standard for the content of the guarantee, which will make it fully machine-readable and machine-processable for all.
This can be done in the existing software and processing environment, and without being onboarded to any specific platform.
The termination of the guarantee can also be significantly quicker as there is no original document that must be found and returned. This will free up limits and reduce costs both for the applicant and the bank.
For the issuing bank, it is possible to immediately start digitalising in parallel with current paper processes, without any requirement to change the actual process.
The bank can digitise all the steps of the issuance process, including adding electronic signatures and/or seals.
The issuance and the sending of the digital guarantee will be instant, and there will be only one digital format regardless of the beneficiary’s preferred way of receiving the guarantee, email, through platform or SWIFT.
The beneficiary will receive a digital original bank guarantee, and not a copy nor a data record on a platform.
Should the beneficiary already be on a platform, the guarantee can easily be recorded on the platform.
If a specific standard has been used inside the guarantee, the document can be fully machine-readable, machine-processable, and is automatically stored and managed within the beneficiary’s environment.
Anyone can implement and start using trace:original for issuing of digital originals.
It is only the party that is creating a digital original document that needs to be a customer of Enigio.
Once a document has been created, it is free to use and manage for anyone, in the same way as a paper document.
Three easy steps to start issuing digital guarantees:
- Define preferred set up, inhouse, cloud solution provided by Enigio, or through your current software provider (trace:original is already available through serval software providers)
- Go through simple APIs and connect to your current system. (Standalone GUI is also available.)
- Start issuing any type of digital original documents
Read our latest issue of Trade Finance Talks, Spring 2022
