Standardizing Risks in Business-to-Business E-CommerceA Presentation to UNCTADGeneva, Palais des Nations 23 October 2001Gamaliel C. Pascual

SMetrix OverviewSpecialist in B2B e-commerce consulting and implementationFinance professionals 50 man years in international capital

markets – derivatives, trading, securitization

Development staff Purely secure Internet applications

development

Expectations Need to Be Met

“A recent survey of purchasing managers suggests that the wave of new on-line business-to-business activities is far from cresting” – Alan Greenspan, Chairman, US Federal Reserve 28 Feb 2001 "What is lacking is a complete purchasing strategy that goes from electronic ordering to electronic back office,” – Laurent Gampel, Vice President, American Express

SMEs – the “last mile” of the global supply chain

InconsistentAcctg Info

Credit RatingAgency Pressure

On Banks (risk assets& correspondent banks)

BIS RiskRatingsLadder

MinimumDeal Size

Non-scaleableEvaluation

infrastructure

PeopleIntensive;Need for

experience

Global Supply Chain

B2B Risk Ladder

AUTHENTICATION

REPUDIATION

LEGAL

OPERATING

PRIVACY

TECHNOLOGY

ECONOMIC

LIQUIDITYAll failures focused on e-commerce as a mere technology deployment

issue

Matters addressed by Clearinghouse

Strategic PartneringGE Global Exchange Services

Global Supply Chain process and technology expertise

Other Discussions Dun & Bradstreet

Online Credit Score

Target deployment: Q1 2002

Buyer Seller

Realtime info as risk is undertaken

Key Technologies Delivered by SMetrix

Robust agreements engineHighly affordable and deployable PKI based digital signature process US $ 0.50 per signatory

These products allow the formation of legally enforceable electronic documents

Conventional Approach to E-Commerce

Front End Solution

OthersBack EndSolution

Company

BankSolutions and Products

InsuranceCompany Products

LogisticsSolutions

OthersSolution Providers

Supply Chain Customers Supply Chain Customers

New Approach

Clearinghouse

Supply Chain Community

Other E-CommerceApplications

E-Procurement

ebXMLCustomerCommunity

Front End Solution

OthersBack EndSolution

Company

Banks

Insurance

Logistics

Others

Makes Digital Documents

Legally Binding

Allows for seamless electronic document

flow

Real-time delivery of information to the right

party eliminates information asymmetry

E-Market Place

Clearing Process

TECHNOLOGY OFFERING

FILLING THE NEEDS

The unprecedented access to and analysis of vendor /purchaser performance is due to

availability of information in electronic

form; the pivotal information is dynamic

credit score

CounterpartyCreditScore

FinancingL/Cs

Reinsurance

Collections

Accounting

Volume / Liquidity

Increasing number of commodities

tradedBetter pricing

Operating efficiencies through increasing

automation

What MNCs want

What SMEs need

Structure Allows for Scaleable SME Financing Infrastructure

Buyer Finance Department Seller Finance Department

$

InvestmentBank

$

InvestmentBank

$

VISIO CORPORATION

Electronic TradeAcceptance

Electronic Purchasing

File of consummatedPurchase transactions

CLEARINGHOUSE