How Union Systems is redefining the future of trade finance technology in Africa

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The African Development Bank (AfDB) estimates that Africa’s trade finance transactions – the sector concerned with international trade and commerce between indigenous and international organizations – reach $ 1.1 trillion per year. Africa’s trade finance sector, despite its potential, has been hampered in large part due to the continued reliance on manual processes. But digitization, led by native solution providers, is slowly changing the dynamics.

Trade finance technology ensures smooth facilitation of international business operations. Over time, players in the African trade finance sector have relied on software solutions developed by international technology companies to automate their operations. However, these software applications are often designed for global markets and do not take into account the peculiarities of African countries.

This reality creates an obstacle to the growth of trade finance in Africa. To address this problem, indigenous technology solutions companies like Union Systems Limited (USL) have started to redefine the African trade finance industry by developing and deploying indigenous technology solutions that take into account local requirements and optimize end-to-end processes. at the end.

From personalization to creation

Union Systems started as a local partner of an international software company, implementing and customizing their trade finance software applications for banks across Africa. During this time, the company noticed that there were significant gaps between foreign applications and local requirements that customizations alone could not fix. These issues were unique to the region’s regulatory environment and although they form an important part of the day-to-day international business operations of African banks, they were not ranked among the characteristics that international software companies considered important. This is because their software was designed to solve global issues while ignoring region specific issues.

Based on its experience, Union Systems decided to move from implementing international software to building its own software solutions. The company has spent the past five years developing and deploying its local Africa-focused software applications to meet the demands of trade finance in Africa.

Trade-X, USL’s first native solution, automates all local trade finance operations and regulatory requirements in Nigeria. Thanks to the software, some Nigerian banks have been able to transform their business operations. The company has recently broadened its scope from solving Nigeria’s unique regulatory issues to managing Africa’s business operations on a larger scale.

As a result, the Trade-X product has been redesigned to include advanced artificial intelligence features such as optical character recognition technology, handwritten text recognition technology and business intelligence, among others, and has been renamed Kachasi. .

Kachasi is the first local trade finance software that automates the complete lifecycle of international and domestic trade finance transactions. International trade processes are document-centric and Kachasi has significantly reduced its reliance on physical documents by digitizing them to speed up transaction processing. The software is easily adaptable to the regulatory requirements of any country and allows banks to react quickly to changes in regulatory policies. With very robust features, Kachasi’s ability to operate seamlessly across different African countries without requiring costly and rigorous customization is redefining the African trade finance technology space.

In 2020, Union Systems expanded its impressive list of trade finance technology solutions with the launch of Optimus. To import or export goods to Nigeria, companies have to go through several complex processes and obtain numerous approvals. These processes range from obtaining an M form to personalized approvals to port logistics, among others. These usually take months and require a lot of communication with the bank representatives or interaction with several commercial bank portals to complete the necessary transactions.

USL’s Optimus solves this problem. It is a multi-bank trade finance business portal that allows importers and exporters to initiate, manage and gain visibility into their trade finance transactions with all of their banks from a single portal. online, eliminating the need to log into different banking portals. The multi-bank approach ensures that all the steps necessary to complete a process, as well as all the stakeholders that an importer and exporter would need to interact with, are in the portal.

Indigenous solutions boost intra-African trade

The rise of companies like Union Systems is a big boost for the industry as it means that the challenges created by international software and the gaps not covered are addressed, leading to increased operational efficiency.

In the long run, indigenous, locally built trade finance technology solutions have immense potential to boost trade within the continent.

Trade is widely seen as vital for economic growth and development, and in 2018 Africa voted for more and better trade with itself, which led to the agreement that established the Zone of African Continental Free Trade (AfCFTA).

The landmark deal went into effect in January this year as it seeks to increase intra-African trade, which, at less than 20%, is paltry compared to levels seen in Europe (69%), Asia ( 59%) and North America (31%).

While the AfCFTA has effectively achieved its key goals of creating a single African market of over one billion consumers with a total GDP of over $ 3 trillion, locally built technology solutions are crucial to facilitate business operations. day by day.

And just as important is the fact that these applications by Union Systems lend credence to the notion of African solutions to African problems: that Africans are best placed to solve the continent’s problems, using local resources.

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