Published on : Jun 28, 2017
IBM, one of the world’s leading technology company, is developing a blockchain-based platform for leading banks in Europe, including Deutsche Bank and HSBC. This platform is specifically intended to simplify trade finance transactions for SMEs. A survey of banks performed by the Economist Intelligence Unit and IBM in 2016 determined the trade finance as one of the key segments where blockchain, the original technology behind bitcoin, can have an impression.
The technology offers an electronic transaction-processing and record-keeping system, letting all parties track the documents through a secure network without the need for third-party verification. This system contrasts with the existing process, the trade finance transactions that generally involve a complex paper trail and need international courier services. The existing system is high on risk to document fraud. The lengthy completion procedure is another negative characteristic of it.
The Platform to Bring Customers and Traders Together
Hubert Bdenoot, the general manager for trade finance at KBC, is quite positive about this platform. He claims that this platform will bring the customers and traders together to make transactions clear as crystal from the moment the purchase order is made till payments are done.
“The first service that buyers and sellers could access is risk coverage and financing, and it will also involve a track-and-trade system so that the consumers and traders can have a track of the physical transfer of products,” he added. The Digital Trade Chain Consortium, also consisting of KBC, Rabobank, Natixis, Societe Generale, and Unicredit, is targeting for the platform to be operational by the end of 2017.