David Hennah, head of trade at technology provider Misys, was instrumental in the commercialisation of the bank payment obligation (BPO). Here, he discusses what the adoption of BPO means for the industry.
From working at a bank, in a consultancy and for a technology vendor, David Hennah, head of trade at technology provider Misys, has gained a varied perspective on the trade finance industry. But it is during his near eight years at the Society for Worldwide Interbank Financial Telecommunication (Swift) as a senior product manager that he was able to build relationships with many of the world’s 3000 trade banks.
This is his second stint at Misys, rejoining the firm after working there between 2001 and 2005. Prior to that he worked a management consultant for ICL/Fujitsu Services, and before that he was at Barclays for more than 15 years. He says that he became motivated to do something with his career that would make a difference to the industry. And, his involvement in the commercialisation of the bank payment obligation (BPO) is one such example.
The BPO carries the same benefits as a letter of credit, but is electronic and removes paper from the trade settlement process. The BPO, which is officially defined as an “irrevocable conditional undertaking to pay given from one bank to another”, is a solution that also gives banks an opportunity to step in with services in open account transactions.
In 2013, the International Chamber of Commerce (ICC) defined uniform rules for the BPO so that buyers’ and suppliers’ banks across the world can use a standardised BPO solution. Mr Hennah was a member of the ICC BPO rules drafting group and helped write the BPO rule book. In this podcast, as well as explaining why he prefers to use the term “financial supply chain management” rather than “supply chain finance”, he elaborates on the current state of adoption of the BPO.
