Banks develop trade finance app on R3 Corda DLT platform

Eleven banks have passed a major milestone in the digitisation of documentary trade finance by developing a prototype application on blockchain consortium R3’s distributed ledger platform, Corda, reports R3’s technology partner CGI. It adds that the new trade finance app has the potential to “significantly reduce inefficiencies and costs by streamlining the processing of sight letters of credit (LCs).”

Bangkok Bank, BBVA, BNP Paribas, HSBC, ING, Intesa Sanpaolo, Mizuho, Royal Bank of Scotland (RBS), Scotiabank, SEB and US Bank have collaborated with R3 and CGI over the past year on numerous trade finance projects, building and testing applications. Using lessons learnt from these projects, the group has now developed a trade finance application on Corda that incorporates shippers and carriers.

Several R3 member institutions now intend to pilot the platform – which CGI says “holds potential to improve trade flows, particularly for small to medium enterprises (SMEs) in developing economies” – with the goal of a making it widely available in 2018.

“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the processes and systems banks are forced to use today, the infrastructure that supports trade financing is extremely outdated and prone to risk and error,” said David Rutter, CEO of R3.

“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.”

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