Round 3 Questionnaire

ID:  Please enter the Survey "Username" or your e-mail address:   
(A Username is allocated at registration.  If you do not have the Username at hand please just enter your full name or your e-mail address. I will substitute these details with your username before aggregating the data).

Q1.   In Round 2, those in banking and those using or developing trade finance services generally expected online services to reduce discrepancies; but some academic researchers did not expect an improvement (see graph to right).  Please say here what change, if any, you expect from Internet finance systems in dealing with discrepancies and why you think that.
Q2.   In Round 2, those using or developing trade finance services generally expected online services to improve security and reduce fraud against banks; people in banking and academic researchers were less optimistic (see the two graphs to right).  Opinion was also spread on the question about the cost of dealing with fraud.  Please say here what change, if any, you expect Internet systems will change in dealing with security and fraud and why you think that.
Q3.   In Round 2, opinion was spread on whether online services would reduce the cost to users of finance of verifying their trading counterparties (see graph to right). Please say here what change, if any, you expect Internet systems will change in the cost of importers and exporters verifying transactions with counterparties.
Q4.  In Round 2, all the ongoing costs and risks (such as transaction costs, staff costs, discrepancies, authentication, fraud, Herstatt and Sovereign risks, and so on) were expected to stay the same or decline EXCEPT for operational risk (click for description),  enforceability risk (click) and Systetemic Risk (click).  Round 2 opinion suggested those two would rise. Q4(a): Do you expect the risk of unenforceability for trade finance systems that operate mostly online to be different to those running mostly on paper documents? Yes:    No: Please say what will change and why: Q4(b): Do you expect the operational risk of trade finance systems that operate mostly online to be different to those running mostly on paper documents? Yes:    No: Please say what will change and why: Q4(c): Do you expect the systemic risk to the whole financial system will change as trade finance systems move online and away from paper-based systems? Yes:    No: Please say what will change and why: Q4(d): With these three risks expected to rise, but other transaction risks expected to fall, do you expect an overall decline in risk when systems operate online compared to paper-based systems? Online transactions will be more risky:    Less risky: How much to you expect the total risk of online online transaction to rise, or fall, compared to an equivalent paper-based transaction (rise/fall percent %):

Q5. In the report to survey participants on Round 2, a model was put forward for showing the effect of online trade & finance systems on the cost and risk of doing business.  You can see the model by clicking here (opens a new window).  Please answer the following questions about this model:

Q5(a) Is the "efficient frontier" model an effective tool for discussing the effect of Internet systems on the costs and risks of international trade and its finance? Yes:    No: Please comment:
Q5(b) Is it reasonable to apply this model to importers, exporters, as well as to issuing banks and confirming banks?  [For example in the diagram on the right an issuing bank supplying a letter of credit to a given customer and dealing with a given confirming bank (at A in the diagram), could reduce risk by doing more extensive credit checking (to be at point B); could expect to shift to positions A' or B' due to the cost and risk reductions of online systems.] Yes:    No: Please comment:
Q5(c) Given the efficient frontier model, is the shape correct, that is, does the curve downward to the left correctly show the trade-off of cost and risk for an importer using A. payment in advance; B. documentary collection; and C. letter of credit? Yes:    No: Please comment:
Q5(d) Will the total cost to banks of doing business reduce enough to shift the efficient frontier down after they move trade payments online (do not consider the one-time-only set up, re-engineering and training costs here)? Yes:    No: How much do you expect total transaction costs to decrease (in percent %):
Q5(e) Will the risk to banks of doing business reduce enough to shift the efficient frontier to the left after they move trade payments online (do not include the initial one-time risk of making a change to an existing system here)? Yes:    No: How much do you expect average risk on each transaction to decrease (in percent %):
Q5(f) Do you have any other comments or suggestions on the model?

Q6.  Finally, I would appreciate your comments on some of the issues raised by respondents to the final question of Round 2, about competitive effects.

Q6(a): Some respondents expect substantial additional regulation and taxation of trade and trade finance will counteract benefits gained by these online systems.  What are your thoughts on the likelihood of increased legislative impediment to trade?  And will the W.T.O. be effective in limiting the effect of such impediments?

Q6(b): Some respondents expect the accessibility of new systems will bring more small importers and exporters to the market as users of trade finance and other online trade services? Do you agree, and what effects will that have on the industry?

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