February 12, 2019 By IBM Blockchain Pulse 3 min read


A shipment of 12 bottles of rare wine moves by truck from a small winery in France to a buyer in Spain. Twenty pieces of office furniture from the U.K. are sold to a German retailer and arrive two weeks later.

Transactions like this happen daily, but for many small and medium businesses, the financing these deals rely on was largely reserved for big companies — until now.

we.trade, a collaboration with IBM and 14 major European banks — CaixaBank, Deutsche Bank, Erste Group, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit — to form a blockchain network for trade finance, was inconceivable just five years ago.

Now in production using distributed ledger technology and smart contracts, we.trade and its member banks are opening the door to trade finance for 70 percent of small and mid-sized business in Europe that previously did not have access. Enabling enhanced trust and transparency in the lending process, these banks worked with IBM to solve a specific problem — provide more companies more efficient access to trade financing to allow them to grow their business by expanding into new markets and forging new trading partnerships.

Learn why IBM is the top-ranked blockchain for business services provider

“For the first time, competitors are joining forces to solve all the complexities of trade finance,” said Roberto Mancone, chief operating officer, we.trade, who is speaking during IBM’s THINK 2019, IBM’s annual conference focused on technology and business. “We’ve moved quickly and deliberately to do it and we’ve guaranteed a user experience that enables businesses to trade, seamlessly, simply and with trust. The platform is available via the cloud for any bank to use, not just our founding members. Meanwhile, we’ve made exponential progress unlike any other organization in this space.”

Distributed ledger technology (DLT) makes it possible for documentation to flow transparently yet securely among banks, logistics companies, and freight companies based on permissions. Bank customers can easily create trade orders online and manage the entire trade process from order to payment. The we.trade platform enables businesses to create smart contracts on the blockchain to dictate the commercial and shipping conditions of agreements between trading parties. This helps businesses scale their business by triggering automatic payments based on events.

The we.trade platform is live and in production, aligned with and operating in compliance with the requirements of each bank and their respective countries as well as the EU. Its open API architecture enables it to track and trace goods shipped by any of the 400 logistics companies throughout Europe who are also using the platform, all accessible via a laptop or mobile device. Far more than providing supply chain finance and its version of letters of credit (bank payment obligations), we.trade provides a full trade finance platform for bank customers, buyers and sellers, and the supply chain participants in between.

we.trade also operates within the context of complex global regulatory requirements including the EU General Data Protection Regulation (GDPR), and within the individual requirements of each of the member banks.

In another major advancement for enterprise blockchain, we.trade is collaborating with Hong Kong’s eTradeConnect, a similar solution also leveraging blockchain to facilitate more efficient and open trade. By connecting these two platforms, a digitized trade corridor is opening between Asia and Europe for the trade finance business.

“The goal of this collaboration to connect these DLT networks is to speed up the proliferation of these platforms into new territories, also taking it beyond the bank-backed aspects of trade finance to ultimately create a convenient, frictionless user experience for clients involved in all areas of global trade,” said Mancone.

By helping clients build, grow and convene blockchain networks that solve business problems like we.trade does, IBM is giving clients the tools and services to create a future in which global trade can be interconnected, efficient, highly secure and transparent.

On Tuesday, February 12 during THINK 2019, don’t miss Digitizing the Flow of Goods, Data and Money with Blockchain, where you can hear Roberto Mancone, COO of we.trade as he joins Marie Wieck, general manager of IBM Blockchain, on stage along with Natalie Dyenson, VP of Food Safety at Dole, and Karen Oldfield, CEO of Halifax Port Authority, as they detail how blockchain is creating a new form of shared truth and interconnectedness across business processes.

Open new corridors of trust for new trading partnerships

Was this article helpful?
YesNo

More from Financial services

6 benefits of data lineage for financial services

5 min read - The financial services industry has been in the process of modernizing its data governance for more than a decade. But as we inch closer to global economic downturn, the need for top-notch governance has become increasingly urgent. How can banks, credit unions, and financial advisors keep up with demanding regulations while battling restricted budgets and higher employee turnover? The answer is data lineage. We’ve compiled six key reasons why financial organizations are turning to lineage platforms like Manta to get…

Top financial services trends of 2024 

4 min read - The start of 2024 brings forth many questions as to what we can expect in the year ahead, especially in the financial services industry, where technological advances have skyrocketed and added complexities to an already turbulent landscape. While high interest rates and inflation concerns are carrying over into the new year, financial services trends signal to prepare for major changes in real-time by staying up-to-date on all financial services-related matters, including in banking and capital markets sectors. This coming year,…

How IBM and TechPassport are helping to ignite innovation between financial institutions and fintechs

3 min read - We are increasingly seeing how fintechs have been transformational for the financial services industry, but deploying fintech innovation in such a highly regulated industry can take time, potentially slowing adoption and time to market. As large financial institutions look to bring on new partners, they may ask themselves: where do we start? How do we find high-fidelity suppliers? How do we onboard them? How do we begin to work with them and ensure our security and compliance measures remain intact?  …

IBM Newsletters

Get our newsletters and topic updates that deliver the latest thought leadership and insights on emerging trends.
Subscribe now More newsletters