How ArcelorMittal Nippon Steel India & ICICI Bank broke new ground mid-pandemic

By ICICI Bank Editorial Team

With accelerated digital adoption transforming every business, the environment in which corporates operate is becoming increasingly dynamic and competitive. As per recent estimates, the digital economy accounts for 25% of the global GDP today, and going forward will account for at least 50% of value creation. Digitisation offers a multitude of benefits that help minimise days' worth of delays, excessive paperwork, and bureaucratic bottlenecks. For capital-intensive businesses which deal in large volumes, this can mean savings worth crores.

In this environment, ArcelorMittal Nippon Steel India Limited (AM/NS India), a joint venture between ArcelorMittal and Nippon Steel, leveraged ICICI Bank’s Corporate Ecosystem Banking comprising a full range of services to digitise its corporate ecosystem to great success. These services included digitised bill discounting, digital cross-border transactions, customised payment solutions for vendor-dealer networks, and trade services, among others. This association also led?AM/NS India to execute the country’s first domestic paperless bill discounting transaction, paving the growth path for the industry as a whole.

Streamlining processes via Customisation & Digitisation - Paving the way towards greater operational efficiency

Let’s have a look at the customised offerings under ICICI STACK for Corporates, and how they helped in facilitating end-to-end digitisation across many functions of AM/NS India:?

Cloud-based solutions - AM/NS India and ICICI Bank executed an end-to-end customised digital solution wherein the Bank’s cloud based dealer and vendor management platform was integrated with the server. The platform enabled digital onboarding of channel partners, reconciliation and seamless collections and payments. Further, vendors who fulfilled the Bank’s KYC requirements, were also eligible to receive funds instantly which, in turn, brought significant operational and working capital efficiencies for both AM/NS India and its channel partners.

Payments were digitised - ICICI Bank customised ‘BankConnect’ for AM/NS India basis their business requirements.?BankConnect is a platform which automates payments by synchronising with the client’s Enterprise Resource Planning system (ERP) for vendor-dealer payments. This eliminates multiple entries for bills as an entry once made in the ERP gets automatically replicated in BankConnect and subsequently processed. Using technology also reduces error and facilitates optimum utilisation of the corporate’s resources. Overall, this brings speed and efficiency in corporate systems which ultimately means faster decision making by management.

Documentation was digitised - AM/NS India leveraged ICICI Bank’s TradeChain services (state-of-the-art digital platform for domestic trade transactions), to execute a country-first end-to-end electronic transaction comprising a digital issuance of Letter of Credit (LC), advisory and presentation of documents to its Baroda-based customer.?Subsequently, AM/NS India was also on-boarded on ICICI Bank’s e-DS platform which allows online discounting of LCs issued by any bank.

This?transaction validated the commercial and operational viability of online discounting as an alternative to traditional paper-based transactions and how it can bring working capital efficiency for the company and trade partners instantly. This game-changing innovation enabled AM/NS India to reduce the end-to-end execution timelines for trade transactions. By significantly reducing the turnaround time, it improved the company’s cash-flows, meaning AM/NS India now had funds available within 3 days in stark contrast to the previous minimum of 15 days’ timeline needed as the documents had to be physically moved.

Hence, these new paperless domestic bill discounting models have the potential to increase the frequency and volume of trade, which directly impact the company’s bottom line. The success of this digital model is expected to be heavily replicated across the industry, as its advantages far outweigh drawbacks, if any.

Trade was digitised -?Two key steps enabled the digitisation of trade. Firstly, adoption of Trade Online (TOL), which is an electronic service for disclosure of digital assets, and Corporate Internet Banking (CIB) by AM/NS India. The usage of TOL increased substantially during the lockdown period as it allowed for around-the-clock logging and digital execution of transactions ranging from issuance of LCs and Bank Guarantees, payments and cross border transactions, which helped in reduction of lead times.?Secondly, an exclusive trade-services enabled transaction desk in the captive ICICI Bank branch in the AM/NS India Hazira campus was set up mid-pandemic. This exclusive branch not only enabled seamless customisation of all trade and retail requirements of the company at their doorstep, but also provided for personal banking solutions to AM/NS India employees.

The above steps towards digitisation brought about efficiencies as the AM/NS India team had to no longer travel long distances for their day-to-day banking needs.?

Looking at What the Future Holds?

ICICI STACK for Corporates appeal lies in the fact that it is moldable to over 15 key industries with customisations available for each. Ecosystem banking, is also further faciliated by the introduction of 'Trade Desk' at Bank branches. Therefore, corporates, employees, channel partners and promoters, each have their needs addressed.

The advent of such a revolutionary method bodes of a fast-paced, expedited future where deals are cemented and executed at the convenience of a click without any garden variety hassles and obstacles. Seamless transactions will help birth a new future where small and big traders alike will be able to transact with MNCs and blue-chip companies with professionalism and clarity.?

A utopian new world of banking services is here and the transformation will only grow from strength to strength, here on forward.

If this resonates with you please reach out to us at [email protected]. You may also visit us at icicibank.com/ecosystem to know more.

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