Decrease Risk and Decision Times for Bank Guarantees

Embrace an easier process with Applica

A bank guarantee, also known as a bank bond (but not to be confused with debt securities) is an undertaking by a bank to cover debt or risk on a transaction. This may sometimes be used as an alternative to a company offering security for the debt itself, although banks will usually require some form of security or quasi-security in return (so obviating this benefit), including:
·      Cash collateral
·      A counter-indemnity
·      Security over company assets

Bank guarantees


An employee at a large financial institution needs to run an assessment in order to determine whether or not to give a bank guarantee. This process requires manual scrutiny of complex corporate documentation and correctly dispatched documents to different categories of bank guarantees.


The manual process is expensive as is executed by a qualified risk assessment employee. Manual extraction of information is also slow, error prone, and requires significant human effort.


Applica categorizes all of the bank guarantees into six independent baskets. Each basket represents a different type of bank guarantee (e.g.: Performance guarantee, Bid bond guarantee, Financial guarantee, Advance payment guarantee, Foreign bank guarantee, Deferred payment guarantee). Each category requires a unique type of documentation, which Applica will automatically categorize into the correct basket. Furthermore, Applica will create a subcategory of each basket and extract the required information from the different categories to run a full risk assessment.


The turnover time to process risk assessments changed dramatically with the implementation of Applica. With all the extracted data from a range of documents located in a centralized repository, it is easy for employees to query the required information on-demand and determine whether or not to give the bank guarantee within seconds.

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