Finastra launches standalone SBLC processing service for US banks

Finastra has launched StandbyX, a cloud-based service designed to automate standby letter of credit (SBLC) processing for regional and mid-sized US banks, Global Trade Review reports. The product gives those lenders access to technology for managing the instruments without requiring them to adopt a complete trade finance platform, according to the company.

StandbyX is delivered as software as a service and draws on the SBLC module within Finastra’s Trade Innovation platform, which is generally used by larger banks. The launch therefore makes an existing element of that platform available through a more narrowly focused offering. Finastra said the product was intended to address smaller institutions’ continued reliance on manual or partly manual processing, rather than require them to take on the broader system.

The company argues that those working methods can constrain banks’ ability to handle more business, introduce risk and make operations less efficient. It also claims StandbyX simplifies integration and testing, reducing operational complexity, and offers a competitive overall cost of ownership. These are Finastra’s stated benefits of the service; the report does not provide pricing or quantified estimates of the savings banks could achieve.

Vinay Mendonca, Finastra’s head of trade and supply chain finance and corporate channels, said US banks had often relied on manual handling or workarounds for SBLCs. He highlighted the importance of risk management even where transaction numbers are modest, because the instruments can carry significant value. In his account, wider access to trade finance technology could help institutions improve efficiency, reinforce controls and serve customers better.

Finastra described the launch as part of continued spending on its trade solutions portfolio. Global Trade Review also reported that the fintech recently introduced a supply chain finance platform for banks, adding a front end for payables and receivables financing while enhancing functionality already available through Trade Innovation.