Blockchain in Financial Services

14 banks using we.trade for global trade finance, breaking down trade barriers for business

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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.

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“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

Managing Editor

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