IBM teams with big banks for blockchain-powered trade finance platform
Tech giant IBM has partnered with five banks – UBS, Bank of Montreal, CaixaBank, Commerzbank and Erste Group – to launch a blockchain-based trade finance platform. The new platform, called Batavia, is built to be accessed by organisations of all sizes anywhere in the world.
Powered by the Hyperledger Fabric blockchain framework. Batavia will support trade finance for transactions across all modes of trade, “whether it be by land, sea or air”. IBM will act as consultant alongside transportation industry experts as well as the banks’ customers to ensure that the platform is “flexible and intuitive”.
Batavia will allow transacting parties to view the progress of a shipment from warehouse all through the transport, till it arrives at the receiving port. Automatic payments will release incrementally along each step of the process.
The firms say the open nature of the platform, may encourage participation from other banks, vendors and regulators which may open new trade corridors, bringing new players into the market.
Fabio Keller, IBM project lead, says: “Financing global trade has emerged as one of the use cases most in need of innovating.”
According to the organisations, previously, trading partners, including buyers, sellers, their banks, transporters, inspectors and regulators relied on large volumes of paper based documentation to securely conduct trade transactions. The process could take weeks, incur costs, potentially making data vulnerable to errors due to repeated manual reprocessing.
The Batavia platform is designed to handle and compare documents, allowing buyers, sellers and their banks to process transactions with “efficiency and transparency”.
When all participants in a transaction can access a shared version of the process, they can interact with “greater trust”, potentially building more distributed networks, and in turn, “grow revenue”.
Batavia is targeting pilot transactions with customers on the network in early 2018 to test and refine the platform.