AI & ML playing vital role in helping underwriters classify standard of risk

Sunil Pandita, VP- Sales, India, Newgen Software

There has been considerable growth in the trade finance market over the past decade. With the trade finance software market revenue currently standing at $1.7 billion, it is projected to grow to $2.9 billion by 2027, shares Sunil Pandita, VP- Sales, India, Newgen Software with Rashi Aditi Ghosh of Elets News Network (ENN).

Newgen has recently launched a trade finance platform. Can you give us more detailed insights into this new product?

In today’s fast-paced world, banks cannot remain immune to the needs of their digital-first customers. They need to extend a modern digital service across all their offerings, including trade finance, and they need to prioritise this now! With thisin mind, Newgen offers a trade finance platform that drives end-to-end automation of the trade finance process (from origination, issuance, amendment to collection), automates origination workflows, and reduces turnaround times by almost 50%. Backed by a low code automation engine and cloud-native architecture, this platform allowsunified processing of trade transactions and can easily be configured to launch any new structured trade finance product.

Newgen’s trade finance platform enables banks to cater to all trade finance requirements, including issuing letters of credit, handling remittances and project exports, and optimising various processes, including open account trade, bank guarantees, invoice discounting, and purchase order financing. The platform enables effortless compliance with international and domestic regulatory requirements, including SWIFT and ISO20022.

What digital strategies are you planning to implement to stand out in the market to help the banking sector?

Newgen’s trade finance platform is future-ready and all set to help banks simplify their trade-related operations. The platform is powered by futuristic technologies like blockchain and low code and enables last-mile automation, as per the needs of the evolving market. Our trade finance platform is well-equipped to help banks orchestrate their user journeys (banks’ users as well as customers) across all touch points, provide a customer portal, facilitate a unified front and backend, and offer seamless integration with core banking systems and third-party applications such as anti-money laundering systems, credit bureaus, and more.

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The platform is also supported by an in-built business rule engine which allows banks to configure future compliance needs, as well as an inbuilt enterprise-class document management system that enables intelligent document processing.

What is the current landscape of the trade finance ecosystem?

There has been considerable growth in the trade finance market over the past decade. With the trade finance software market revenue currently standing at $1.7 billion, it is projected to grow to $2.9 billion by 2027. As the focus shifts to the digitisation of financial services, banks are now looking to modernise their traditional processes and there is a growing need for the automation of manual and paper-heavy trade finance processes.

Banks are now kick-starting their digital transformation journey by investing in smart, agile technologies to transform their product lines. With trade contributing to almost 40-50 per cent of the margins for banks, trade finance has become a pivotal area in the banking sector, with a lot of focus falling on wiping out inefficiencies and making trade financing digital.

What are the challenges faced by an organisation while undertaking its digital transformation journey?

A critical challenge that organisations often face in their digital transformation journey is insufficient management support. Since an organisation’s business processes can span across processes, departments, and functions, without adequate management support, achieving digital transformation objectives can become challenging.

Organisations also encounter difficulties due to weak collaboration between departments, multiple applications, repetitive work, insufficient in-house experience for handling digital transformation projects, among others. Organisations need a platform that can smoothly strike out these challenges and streamline their operations.

How is AI & ML helping in the continuous evaluation of the underwriting & risk model for the banking sector?

New-age technologies like AI and ML play a pivotal role in helping underwriters classify the standard of risk associated with a case and to determine the quantifiable risk factors and maintain risk scoring.

AI and ML algorithms can enhance the accuracy level of underwriting, deal with various aspects, including expense management, litigation, and fraud identification, and make underwriting more cost-effective.

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