Frank Tezzi, vice president, CGI Financial Services, Trade & Payments at Montreal-based information technology and business consulting services provider CGI, discusses how SaaS can help banks meet clients’ future trade finance needs.
Global Finance: Banks are scrambling to stay ahead of the evolving global trade finance market and meet expanding client needs. How important a role does software-as-a-service (SaaS) play?
Frank Tezzi: Banks face complex headwinds in the current climate, including heightened customer and compliance expectations, rising IT and operational costs, reduced budgets, and evolving product needs. By utilizing a SaaS application, they can achieve a consistent long-term cost structure, reduce IT overhead, and leverage collective advances in compliance and core IT development. This allows banks to focus on their market differentiators while ensuring they are on modern platforms that meet future product needs.
GF: How does CGI address the evolving regulatory landscape in trade finance, including know-your-client and anti-money laundering (KYC/AML) requirements and sanctions screening?
Tezzi: CGI’s team of subject matter experts collaborates with our customer base to monitor ongoing local and global regulatory changes. As part of our ongoing technology updates, we routinely add new capabilities based on customer needs and required regulatory updates. CGI also proactively engages with a broad range of fintech partners to integrate the best capabilities into our existing ecosystem, ensuring our customers have access to value-added services in their trade processing.
GF: What impact has Basel III had on trade finance and how banks adjust their risk management practices?
Tezzi: Basel III continues to pose significant challenges for global trade banks as the final rules are being settled. The increased cost of capital is a major concern, leading banks to become more selective in their financing. This often means prioritizing less risky customers, which unfortunately could widen the existing trade financing gap for small to mid-sized enterprises, especially in riskier markets.
In response to these pressures, banks are shifting their business models. Instead of holding assets on their books, they’re increasingly originating and distributing them. This reduces the ongoing cost of capital while also allowing for more efficient risk distribution.
Finally, there is a strong drive toward greater efficiency across the banking system. To cope with the increased cost of doing business, banks are seeking out technology solutions that offer more automation and seamless integration. To realize this, banks must modernize their core platforms to support future innovations and stay competitive.
GF: Your SaaS offering, CGI Trade360, recently had successful go-lives with US Bank, NatWest, HSBC, and Bladex. What are the key contributors to its success?
Tezzi: CGI is unique in the market for consistent implementation delivery to our customer base; this is achieved by leveraging our highly tenured trade consultants. CGI Trade360 has been operating at a market level for more than 24 years. It utilizes our implementation methodology, built on over 40 years of trade market practice experience and driven by our extensive governance processes, which ensure delivery excellence for complex engagements.
This is all supported by an application developed in close collaboration with our customer base to meet broad market needs. Finally, CGI views all engagements as part of a holistic partnership with our clients, particularly given our extensive consulting footprint in more than 500 financial institutions globally.
GF: How are you applying artificial intelligence within CGI Trade360 to enhance trade finance operations, and how important do you think this will be in the future?
Tezzi: The clearest use case today relates back to intelligent process automation. CGI has collaborated with various partners, including Conpend’s TradeAI, to integrate these capabilities into our back-office workflow. Data is automatically extracted from physical documents and loaded back into CGI Trade360, including compliance parties and discrepancies against the underlying transaction. All of this is built on the foundation of AI solutions. This type of processing is a necessary stop-gap on the way to broader end-to-end digitization. CGI has committed to invest over $1 billion in AI services and solutions over the next three years, which will have a broad impact on CGI Trade360’s capabilities.
