A Growing Community Of Fintech And Trade Finance 

Top Asian organizations implementing blockchain in trade finance 

The use of blockchain technology has revolutionized the field of trade finance in the Asian region, allowing for faster and more accurate execution. This revolutionary technology is also being embraced in payments, KYC, bond trading, and lending. Institutions are now sharing developments related to trade finance enabled by blockchain technology. Have a look at Global Trade Leaders website to learn more about how blockchain is implemented in trade finance.

All You Need to Know About Blockchain in Trade Finance

Blockchain's introduction has significantly impacted these industries, making processes more efficient and secure. Not only is blockchain helping to increase speed and accuracy when executing payments and trades, but it is also helping to improve security for all parties involved. Additionally, its implementation can help to reduce operational costs significantly as well as provide improved visibility into transactions across the supply chain. The advantages of using blockchain and distributed ledger technology (DLT) have been so far-reaching that many companies are now integrating them into their processes. Companies across Asia are taking advantage of this technological advance to streamline their operations while ensuring they stay compliant with regulations. As such, the use of blockchain trade finance has become an essential part of the business landscape in Asia.

Trade finance involves buyers, sellers, financiers, export credit agencies, insurers, and other stakeholders and is a set of services designed to reduce the risks inherent in international trade. This may include letter of credit (LoC) instruments, payments, collections processes, forbearance arrangements, export credit guarantees, and factoring agreements. These processes are still largely manual without blockchain technology to automate document verification and matching procedures.

The risk mitigation that LoCs offer is particularly beneficial for businesses operating across borders. An LoC agreement between a buyer and a seller obligates the buyer's bank to pay the seller upfront. This serves as an assurance that goods or services will be provided in accordance with the terms of the agreement. Since payment is made before delivery, there is less risk for the seller that they may not get paid at all.

Benefits of Blockchain Technology in Trade Finance

Through blockchain technology, letters of credit (LoCs) can be signed electronically, and goods inspected by third-party entities using records with digital signatures. This allows for greater transparency and trust between involved parties in the process compared to traditional methods. Four different providers offer platforms that leverage blockchain for trade finance solutions to bridge this gap.

The ease of access and convenience offered by these innovative platforms has made them popular amongst small and medium enterprises, who can now quickly review documents online instead of relying on postal services or physical copies. Furthermore, because blockchain is immutable, it ensures accuracy as there is no risk of data tampering or manipulation, making it an ideal tool for use in high-value transactions. At the recent inclusion FinTech Conference, organized and hosted by Ant Group and Alipay, a new platform for international financial and trade services was unveiled. Trusple makes it more affordable for SMEs to do business with customers across the globe.

The platform is based on blockchain technology, which means that when an order is placed between the buyer and seller, a contract is created automatically to track all aspects of the transaction - from placements to logistics to tax refunds. Additionally, all transactions are stored on a secure digital ledger for easy retrieval and auditing. This helps ensure that everything runs smoothly and securely without any manual intervention or paperwork.

Furthermore, Trusple also provides a variety of other features, such as real-time tracking of orders, automated payment processing, currency exchange services, and discounts for small businesses. All these features are designed to make it effortless for SMEs to conduct their global business operations cost-effectively. As this platform continues to expand its reach in international trade, it will help reduce costs and increase efficiency for businesses operating in different geographies worldwide.

Elaborate Information on Various Organizations & Companies Involved in Digital Trade

Contour, a Singapore-based company, is harnessing the power of decentralization to level the playing field for banks and corporations in international trade finance. The firm is leveraging R3's Corda blockchain technology to build an independent global network for this purpose, with support from leading financial institutions such as BNP Paribas, Standard Chartered SEB, Bangkok Bank, Citi, HSBC, Bain & Company, CTBC, ING Bank, and CryptoBLK.

The first step in Contour's mission is to create a digital form of the Letter of Credit (L/C), one of the oldest and most important instruments used in trade finance. Through digitization and decentralization, users will be able to transact without having access to transaction data or facing risks associated with single points of failure. By creating this new infrastructure built on blockchain technology that can facilitate secure transactions between parties within a digital network while maintaining privacy and security over their data - Contour hopes to make international trading accessible to all participants in the market.

HKMA is the governing body that has put together eTradeConnect, a project that aims to connect 7 major banks in the region and enable them to provide trade finance services. This project was initiated by the HKICL, who established a completely-owned subsidiary - HKTFPCL, to create a digital platform for trade finance. Through this platform, individuals and businesses can securely access financial services, such as payments on imports and exports across different countries. The trade finance platform complies with all international regulations, meaning users can be sure that their financial data is kept safe and secure.

As well as offering a wide range of financial services, eTradeConnect also helps users compare various rates for different currencies to ensure they're getting the best deal when buying or selling goods. Ultimately, because of its design and capabilities, eTradeConnect provides greater convenience and flexibility when managing finances across borders.

Infosys Finacle's Trade Connect is a revolutionary blockchain-related solution that helps digitize and automate the whole trade finance process. Through its use, organizations can create trusted, shared, and distributed networks on a secure platform. This results in significant reductions in time, enhanced efficiency levels, and improved customer value.

The application of this technology stretches across many aspects, such as Letters of Credit (LoC), open accounts trade, exchange of bills for customers or corporates (C2C/B2C), Purchase Order financing, invoice factoring, and Bank Guarantees. These options are available for organizations, dramatically streamlining the entire process from the source until the payment is made.

This technology enables efficient tracking of payments for all parties involved in the transaction, which cuts down on paperwork as well as supports cost control measures due to its affordable nature. Furthermore, its blockchain capabilities can facilitate smoother communication between entities with higher accuracy and speed, as there is no need for manual intervention or reconciliation efforts at different stages.

Overall, Trade Connect brings an array of benefits to organizations – transparency in trade finance operations, improved customer experience through faster processing times, and reliable data security through its encryption protocols – that can help them remain competitive in today's rapidly changing market landscape. Today, two leading industry providers in the trade finance space – essDOCS and Infosys Finacle – have integrated a strategic collaboration to automate their processes using DLT.

The companies will begin integrating essDOCS with Finacle's blockchain-based Finacle Trade Connect solution in July 2020. This integration enables financial institutions to automate and digitize critical processes across the entire trade cycle, streamlining operations and eliminating paper-based document processes. Furthermore, Traydstream, which leverages AI to review trade documents, has also agreed to collaborate with Finacle for Infosys starting in May 2020.

The Bottomline

This move towards digitalizing the trade finance value chain is a major step forward for both companies as it brings greater efficiency and cost savings through streamlined document processing and lower operational risk. By leveraging DLT technology, organizations can benefit from improved accuracy and significantly reduced processing times while ensuring best practice compliance throughout the supply chain process. Through this collaboration between essDOCS and Infosys Finacle, as well as Traydstream's involvement, stakeholders have access to better service levels while maintaining compliance standards. All three parties involved stand to benefit from this new agreement by introducing increased visibility along with more efficient end-to-end automation capabilities for modernizing their processes.

Subscribe to our playlist for latest audios from Global Trade Leaders

Watch our Global Trade Leaders features in our video