The We.Trade Blockchain Platform for Trade Finance Platform, established by a consortium of nine banks in Europe has created a breakthrough conducting seven live Trade transactions by ten companies and four partner banks.
The founding member banks of the Digital Trade Chain (DTC) consortium has now re-branded as “We.Trade.” Powered by the Hyperledger Fabric blockchain framework using IBM’s platform, we.trade provides a platform for tracking, managing and protecting open trade account transactions between SMEs. It harnesses both the Smart Contracts and Distributed Ledger Technology (DLT). It connects the parties involved in the trade (the buyer, buyer’s bank, the seller, seller’s bank and the transporter) and registers the entire trade process and the order of payment, displaying it on the dashboard at-a-glance user-friendly interface… and guarantees automatic payment when all the contractual agreements are met.
The platform is fully automated and is available 24/7 for making the order to payments process faster than the traditional exchange of documents. To use the platform the companies or SMEs have to be the bank’s clients. However, this is not only a technical requirement – the banks will have to perform the appropriate KYC (Know Your Customer) procedures for all the companies who transact on the platform. The Platform is built using application programming interface (API) layers, which will allow each of the participating banks to be on-boarded either through the SaaS (Software as a Service) cloud or on-premise (computer or server-based) software depending upon the bank’s infrastructure & technology capabilities.
According to Bear, “The current focus is around the SME-to-SME trade, providing interfaces to trace and track, so that the positioning of goods, invoice financing, payments and all elements of the lifecycle in that transaction are captured on the blockchain. But, are not, for, e.g., on the platform itself bringing shipping agencies onto blockchain: It is done through APIs. That is one of the reasons why the time to market is as early as it is.”
We.trade use Smart Contracts to improve the transparency of open account trade transaction. The founding members of nine banks – HSBC, Deutsche Bank, Natixis, KBC, Rabobank, Nordea, Societe Generale, Santander, and UniCredit are in the process of marketing the solution to their peers to build scale. The banks took a critical step towards the commercialisation of we.trade by creating a legal entity to manage and distribute the platform. Robert Mancone, COO, we.trade, believes that “It is not a private club with nine banks, but a solution that they want to make available to other banks. The concept is not to capture the market share from others, but to create consensus among other banks.”
Omer Ahsan, head of customer propositions at #HSBC and we.trade board member says: “Three of our clients executed transactions using we.trade: Fluid Pumps used the platform to complete an open account transaction with a customer in Finland, #GPS Food Group completed an inter-company transaction that included the use of a Bank Payment Undertaking and also executed two open account transactions with Paragon Quality Foods.”
According to Roberto Mancone, COO, We. Trade, “The transactions signify the first commercially viable open account trades harnessing the blockchain technology. These trade transactions prove that we.trade a robust and commercially viable proposition. The next step will be to get a buy-in from new banks and their customers in Europe.”
Currently, we.trade operating across eleven European countries – Denmark, Belgium, France, Finland, Germany, Netherlands, Italy, Spain, Sweden, Norway, and the UK. We.trade’s ambition is to expand into additional markets in the Europe and Globally as more banking partners come on board.
To summarise, IBM’s Blockchain Platform is disrupting and revolutionising the businesses to perform efficiently… eliminating the traditional methods of processes and payment systems. We.Trade has shown the banking industry to adapt to the constantly evolving world and making it a better place for everyone to thrive in this ever-changing technological environment.