R3 today announced that eleven banks have developed a prototype application on its distributed ledger platform, Corda, promising to reduce costs in the processing of sight letters of credit.
Bangkok Bank, BBVA, BNP Paribas, HSBC, ING, Intesa Sanpaolo, Mizuho, RBS, Scotiabank, SEB and U.S. Bank have been collaborating with R3 and technology partner CGI over the last year. The group has developed an application that incorporates shippers and carriers. Several R3 member institutions intend to pilot the platform with the goal of making it widely available in 2018.
David Rutter, CEO of R3, comments: “Like so many of the processes and systems banks are forced to use today, the infrastructure that supports trade financing is extremely outdated and prone to risk and error. The work we have been doing with our members over the last year has shown that this challenge no longer needs to stand in the way of giving businesses access to the services they need to trade across borders. The application we have built is the first of its kind and we look forward to rolling it out to our Corda users across the world.”
Ivar Wiersma, Head of Innovation Wholesale Banking at ING, said: “This application has the capacity to make the overall trade flow, currently hampered by outdated processes, faster and more cost effective. This is a great step forward in the process of digitalising and standardising the documentary trade finance process from start to finish, connecting multiple parties in the trade finance chain with the feature of interoperability of the different technologies these parties use.”
Jim Bidwell, Head of Trade Services Product Management at RBS, said: “Distributed ledger technology has huge potential to improve customer experience and reduce costs across Trade Finance, which has remained largely unchanged for many years. This initiative is a great demonstration of how we can collaborate to develop innovative solutions for our customers.”