Financial EDI

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Financial EDI
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AAA Banking
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AAA Financial Service Center
International Correspondent Bank
CENTRAL BANK
Govt. Agencies - Custom, Port, Post
VAN, SWIFT
International Branch
Credit/ Charge Card
Exchanges - Stock, Commodities, Futures
Trading Co
BANK
HomePC
Regional Branch
Phone
ATM
Corporate Terminal

Branch
GEIS
Customer
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Financial EDI
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Definition

• Electronic Commerce
• Is a business strategy
• Uses technology to achieve business objectives
• Improves external business relationships
• Is an evolution in the way companies interact
• Provides information to facilitate delivery of
  goods and services
• Supports change initiatives and reinforces
  business process re-engineering

Banks
Your Company
Customers Distributors
Suppliers
Logistics
A Strategy, not a Technology
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??????????????????? EFT ??? EDI
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Definition

• Financial EDI
• key element in completing the EDI trading cycle
• encompasses transactions between a bank and its
  customers
• usu. for communication of financially related
  information and tnxs
• eg. payment orders and credit advices
• most common Financial EDI transaction is to send
  trade payment instructions with associated
  remittance information

Banks
Your Company
Customers Distributors
Suppliers
Logistics
A Strategy, not a Technology
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Key Benefits

• Financial EDI
• cash management - early dependable notice of
  funds
• funds received effectively guaranteed - tnx
  irrevocable
• reconciliation efficiency - electronic matching
• high levels of security

Greater Financial Control Management Efficiency
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Paper System vs EDI System

• PAPER SYSTEM
• Manual Intensive
• People print (or write) cheques, open envelopes,
  sort, encode and reconcile payment manually
• Slow
• Requires time to deliver and process the cheque
• Uncertain
• Neither party knows for sure when cheque will be
  processed and funds transferred
• Error Prone
• Information must be re-keyed several times in a
  trade cycle
• Lack of Acknowledgement
• Buyer does not receive acknowledgement from
  seller that payment was received
• Buyer-Supplier Competition
• Reinforces adversarial relationship where errors
  or delays can create friction

EDI SYSTEM Reduced / No Manual Intervention Inform
ation keyed once in a trade cycle. Manual tasks
of sorting and reconciliation handled
electronically Faster Eliminates mail and
processing delays Certain Both parties can
accurately calculate cashflow as they know when
funds will be transferred More Accurate Automatic
direct processing, min. re-keying and manual
checking Automatic Acknowledgement System
provides automatic acknowledgement for each and
every transaction Partnership Reinforces
productive relationship where similar business
goals and benefits can be shared
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FEDI - How does it work ?
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The Messages

• Payment Order
• Credit Advice
• Credit Entry
• Debit Advice
• Debit Entry
• Bank Statement
• ETC.

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Thailand Financial Network
Clearing Center
User Network