MIT (Micro Informatique & Technologies SA) announced today that Mitsubishi UFJ Financial Group, Inc. (MUFG) has successfully gone live with MIT’s TRAC (Trade Risk Active Control) system. TRAC is a Collateral Management solution supporting Structured Trade Commodity Finance.
What is TRAC and how does it help Structured Trade Commodity Financiers?
MIT launched its new application TRAC (Trade Risk Active Control) in 2010. TRAC is a Risk and Collateral Management application destined for Trade Commodity Finance or Structured Trade Finance Relationship Managers, Credit Risk Managers, and Top Managers who want to track and monitor their risks appropriately.
The purpose of the software is to replace the Excel spreadsheet widely used in the Trade Commodity Finance sector. The product has already been adopted 10 Banks including BCGE, UBS, NATIXIS, SBERBANK, and OCBC.
Tell us more about the project
The project started at the end of 2017, after MIT was selected by MUFG following a competitive process to support its Commodity Trade Finance team in London, with a view to potentially implementing it globally in a second stage.
Jean-Marie Le Fouest, Head of Commodity & Structured Trade Finance EMEA said: “We’ve strongly increased the business over the past two years, and it was vital for us to adopt a robust system to support our significant growth”.
Paul Cohen Dumani, MIT’s General Manager declared: “We’re happy to welcome such a prestigious reference in our community of users” adding that “TRAC’s true multi-branch and multi time-zone architecture will be key, when MUFG decides to roll out the system globally”.
Why is collateral management challenging in the commodity finance space?
Until a few years ago, most banks were using excel spreadsheets to monitor their credit facilities in Structured Trade Commodity Finance. Excel is convenient and practical when you are dealing with quite small volumes. But when they are increasing significantly, you need a proper system to structure this activity. Furthermore, the pressure of regulators makes it even more difficult today to only get away with Excel.
What are the benefits of TRAC in supporting MUFG?
MUFG are strongly growing their business in CTF. So it was important for them to acquire a scalable system to monitor their risks and collaterals more efficiently. This was confirmed by Jean-Marie Le Fouest, Head of Commodity & Structured Trade Finance EMEA at MUFG who said: “We’ve strongly increased the business over the past two years, and it was vital for us to adopt a robust system to support our significant growth”.
What are the biggest opportunities for trade finance technology in the structure commodity finance ecosystem?
One topic that comes most frequently in the TCF space is how can we integrate Collateral Management systems with emerging blockchain initiatives in the Trade Finance space. MIT is listening attentively to the needs of its Customers in this context.