As it has been revealed, multinational banking firm Standard Chartered is uniting forces with Siemens Financial Services, the financing arm of Siemens, and TradeIX, a digital trade provider, to collaborate on realization of the first client pilot aimed at creation of an end-to-end blockchain-based smart guarantees solution in trade finance.
This project is believed to help remove unnecessary paper work from business sphere which will greatly facilitate a number of financial procedures. The new solution is built with usage of TradeIX’s tools on R3’s Corda framework. Through automated smart contracts, the solution will digitize the entire process of bank guarantee issuance ending up with the claim handling.
Together with Siemens, the firm started development of the pilot in March of the current year and it is scheduled to be completed by the end of the year. Speaking about the project Motasim Iqbal, head of transaction banking UAE at Standard Chartered, stated:
“This is an industry-defining solution which we believe will transform the way guarantees are issued and processed in the UAE. Siemens Financial Services has been a key partner for us to build and develop this pilot on the distributed ledger and we believe that this technology can further be harnessed by the Dubai Smart City initiative.”
It is natural that nobody likes paperwork: nor banks, neither their customers. If the pilot turns to be a success, with digitizing guarantee issuance, amendments and claims, it will make work of such companies as Siemens more efficient and organized.
According to Michael Bueker who acts as a Chief Financial Officer at Siemens, application of digital trade finance solutions in the company’s daily operations is really a very important step as digitalization today is one of the main boosters for the industries development. He said:
“Especially at Siemens, as a digitalisation pioneer, 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. We are delighted to partner with Standard Chartered in leading such game-changing transformation which will help our customers go digital in their guarantee and claim processes and achieve higher efficiency.”
The parties participating in conjunctive work aimed at the development of the pilot project will start implementing their solution in the UAE. According to experts, it is an excellent location for such an important initiative, as the government in the UAE has created a very favorable conditions for implementation of new technologies including blockchain in all their processes.
In general, banking is one of the spheres that is open for innovations nowadays. Banks from different corners of the world are starting to use the potential of blockchain with a view to enhance their customers ‘experience. For example, Agricultural Bank of China has announced completion of a $300,000 loan granting using a blockchain system while the World Bank is working on conducting the world’s first bond transaction using Ethereum blockchain platform.