Four banks join blockchain trade finance initiative
Written by Anthony Strzalek
Four major global banks have joined the initiative launched last year by UBS and IBM to build a new global trade platform based on blockchain technology.
Bank of Montreal (BMO), CaixaBank, Commerzbank and Erste Group have joined the project to develop the new platform, which is called Batavia.
Batavia is built to be openly accessed by organisations of all sizes anywhere in the world, and can support trade finance for transactions across all modes of trade, whether goods are being transported by air, land or sea.
It advances the work initiated by UBS and IBM to develop a trade finance platform built on the IBM Blockchain Platform powered by the Hyperledger Fabric Blockchain framework.
The development work is being done collaboratively by the five banks and IBM in consultation with transportation industry experts as well as the banks’ customers to ensure that the platform is flexible and intuitive for customers and can be commercialised. Batavia is targeting pilot transactions with customers on the network in early 2018 to test and refine the platform.
Designed to support more efficient, transparent and cost effective transactions, the new global trade financing platform will help organisations more easily build multi-party, cross-border trading networks worldwide. Batavia will allow transacting parties to view the progress of a shipment as it leaves the warehouse, is loaded onto a plane, truck or boat and arrives at the receiving port, automatically releasing payments incrementally along each step of the process.
Traditionally, trading partners, including buyers, sellers, their banks, transporters, inspectors and regulators have relied on large volumes of paper based documentation to securely conduct trade transactions, a process which can be time consuming.
Jeffrey Shell, managing director and head of global trade and banking at the Bank of Montreal, said: “BMO takes great pride in being a leader in trade and supply chain finance innovation. Our objective is to deliver simple and efficient solutions founded on technology that delivers cost, efficiency and risk benefits to our clients and the bank.
“We are very excited to participate in this initiative and sense the development of real, positive outcomes for our clients in North America and around the world. As a partner in Batavia we are strengthening our ability to remain highly relevant to our clients as the financial services industry continues to evolve.”
Fabio Keller, IBM project lead, added: “In working with hundreds of clients to implement blockchain solutions, financing global trade has emerged as one of the use cases most in need of innovating. Targeting the creation of large, global, multi-modal networks that bring transparency and trust to each step of the trade process is what makes Batavia a platform with so much potential to transform the way companies around the world do business with one another.”