Proponix, a joint venture between Bank of Montreal, Barclays Bank PLC, Australia and New Zealand Banking Group and American Management Systems, launched today. The company says it will be the first independent company of its kind to offer a unique outsourcing model, as well as technology, to provide online transaction processing 24 hours a day, seven days a week for trade banks around the world.

Proponix is headquartered in Toronto and will have processing centers in Toronto and Melbourne, Australia, with other key operations in Hong Kong and Sterling, Virginia.

“We recognized the need to break through the traditional barriers of outsourcing by delivering a flexible, neutral service that will meet the needs of the trade finance industry, and independent research supports our belief,” said Bill Graham, president and CEO of Proponix. “This is a partnership between leading global banks and the premier trade services software company. We understand what our customers’ need and Proponix is the only company to offer end-to-end outsourcing services, not just on high volume items.”

Using Object TradeLine(TM) software, Proponix will provide the back-office engine for processing trade finance services and an Internet front-end trade portal. Proponix will provide online transaction processing for letters of credit guarantees, bankers’ acceptance, documentary collections and reimbursements. Through an internet-based trade portal, banks and their customers will be able to initiate and track their trade transactions online.

Other benefits Proponix say it will offer banks include: cost reduction per transaction, replacing fixed cost with variable costs tied to volumes, improving processing speed and turnaround, reducing exposure to technology selection and ongoing capital expenditure, improving client functionality, information, and service via internet capabilities.

A total of 28 major banks from North America, Europe, Asia and Australia were surveyed last month on topics ranging from how much they spend annually on global trade/finance operations and key challenges facing the industry, to greatest benefits and barriers of outsourcing their global trade processing. Results of the independent research commissioned by Proponix are being released as part of the company’s global launch.

About half of the banks surveyed said they spend more than US$10-million per year on global trade processing. Online transactions processing for international trade banking services is an estimated US$10 billion market. Key findings from the research include:

> 34% said technology is their biggest challenge, followed by growing revenue (31%) and improving overall profitability (27%) of their operations.
>The three most urgent technology projects for global trade which the banks have done recently, or plan to do soon, are: building internet front-end capabilities; installing new or updating back office software; and updating legacy computer systems to meet customer demands.
>The largest benefit of outsourcing is lowering the price of each transaction (62%)
>Of this group, 100% said outsourcing would cut costs, with 41% stating the savings in the 20 to 30% range and a further 12% stating the savings would exceed 30% annually.
>More than half (52%) also said outsourcing gives the bank access to the appropriate technology.
>The global banks acknowledged outsourcing could have customer sensitivity issues (62%) and create problems with their existing, or legacy, computer systems (46%). But these barriers could readily be overcome, the research found.
>Two thirds (65%) said they would prefer a “variable charge,” or pay what you use, by the third party outsourcing vendor