Blockchain technology is poised to revolutionize businesses and change how society operates in the digital economy with an added layer of trust and transparency. It alters the paradigm of how multi-party transactions are performed by enabling a shared, immutable ledger for recording the history of transactions between counter parties in a business network.
Around the world, organizations are leveraging blockchain to fundamentally rewrite existing business models, processes and systems, to drive greater efficiency and improve trust in existing business networks. Government organizations are embracing blockchain to boost innovation and collaboration. Healthcare providers are using it for clinical trials data, regulatory compliance and electronic medical records (EMR). Logistics managers are managing transactions in supply chains spanning thousands of miles — cutting costs and improving efficiency. Manufacturers are using blockchain to expedite their supply chain process and reduce inefficiency. Banks are using blockchain to promote trust and transparency, eliminate fraud, and respond to the changing needs of the market.
In fact, we do not need to look far to see how blockchain is changing the face of business. Here in the Philippines, UnionBank, one of the largest banking organizations in the country, is working together with IBM on a blockchain-based solution that has the potential to reinvent supply chain finance by enhancing security, transparency and operational processes.
This cloud-based application, one of the first projects of its kind in the Philippines outside of traditional banking, is designed to transform trade finance transactions through a permissioned distributed ledger. Built on the IBM Blockchain Platform, this supply chain finance solution from UnionBank will be available to all their customers and partners who will join the blockchain network. Once a part of the network, all parties involved in a transaction can act on the same shared ledger, with each party updating only their part of the process — ensuring efficiency, consistency, trust and transparency, while safeguarding sensitive information.
Invoice discounting, the process of bundling and selling invoices at a discount, is a major source of working capital finance for many suppliers. This new solution aims to enable more suppliers to access credit, with the goal of driving greater financial inclusion throughout the supply chain. The invoice discounting process through the supply chain ecosystem has historically been difficult, slow and risky, since it requires each party to maintain and manually update separate ledgers. It is also often prone to human errors which create inconsistent records resulting in delayed payments and release of capital thus increasing costs.
IBM is actively working with clients in the Philippines to understand which of their processes can leverage blockchain as a technology solution to eliminate friction, redundant steps and tasks while ensuring security and providing transparency to the partners who operate within a business ecosystem. The solution running on the IBM Blockchain Platform can enable organizations like UnionBank to access transactions recorded on a shared ledger in near real-time, enabling them to develop and offer new products to small and mid-sized enterprises. This is a radical process and technology shift which has the potential to drive business growth.
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