Standard Chartered is collaborating with Siemens Financial Services and TradeIX, a digital trade provider, to create an end-to-end blockchain-based smart guarantees proposition in trade finance. They have an industry-first client pilot underway that digitises the traditionally paper intensive Bank Guarantees business from initiation of the bank guarantee to the claim handling. The project is part of the larger Dubai Smart City initiative.
This solution will enable Siemens to digitise its guarantee process for customers with large transaction volumes in the future. Unlike a letter of credit which involves multiple parties, performance details and hundreds of pages of documents, a commercial bank guarantee is a much simpler instrument to digitise.
“While digitalisation is revolutionising whole industries, incorporating digital trade finance solution into our daily operations is an important step... this move is part of our strategic mission of going digital in all arenas. This will streamline our processes and make our trade finance operations smoother, faster and more efficient.” - Michael Bueker, CFO Siemens
R3 Corda Network Pilot
The pilot started in March of this year and will be fully completed by year end. The essential function is based on automated smart contracts. The platform is built using R3’s blockchain technology, and leverages the Corda DLT and application layer provided by TradeIX.
Financial developments like this will likely continue now that the technology is being proven successful in many ways. In June an R3 Corda blockchain network was tested Involving 39 separate banks, with branches in 19 different countries worldwide. The test demonstrated the resilience and elasticity that a blockchain can have, while maintaining the security benefits inherent to all blockchain transactions.
Universal KYC App
The process was to streamline the KYC (Know Your Customer) process across different banks and even different blockchain networks. Their KYC application involved 39 participants who deployed and ran a total of 45 nodes in Microsoft Azure, demonstrating the power of shared business logic on the Corda network. Universal applications such as this will facilitate wider integration of advancements being developed in more particular areas of finance, like the new Standard Chartered blockchain based, smart guarantees process.
Government Digital Currencies
Another recent application of R3’s Corda platform involves the Bank of Thailand. Just last week theri government announced that it was using the technology to create a central bank digital currency. Eight participating banks plan to “collaboratively design and develop a proof-of-concept prototype for wholesale funds transfer” built on Corda.
By: BGN Editorial Staff