Innovative Trade Finance with Blockchain
CTBC Financial Holding Co., Ltd.
Innovative Trade Finance with Blockchain
CTBC Financial Holding Co., Ltd.
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Traditionally, international trade process highly relies on paper document transmission and verification to fulfill client’s various requirements such as shipping and financing. Each transaction costs various trade participants tremendous processing manpower and time. In addition, the potential risk of missing document and forged document is quite high. In order to solve those pain points, CTBC leveraged blockchain technology to achieve un-repudiation and authenticity of document, and synchronizes different participants’ ledgers via consensus mechanism. The solution saves the importer 2 to 4 days of waiting time as compared to traditional process in a proof of concept transaction. This innovative process not only accelerates the entire international trade process but also enables bank to fully monitor trade progress and enhance risk control of trade-based product. Meanwhile, by utilizing this mechanism, shipping providers can also improve its document management.
Moreover, as various trade information are trapped with different information sources, “information silo” is formed. This solution aims to build up an integrated system receiving comprehensive trade information from different platforms/providers/sources and processing these information based on financial product logic accordingly. By doing so, CTBC’s clients and operation staff can handle trade finance process easily and efficiently.
Highlights
Digitized document instead of original hard copy.
Transaction verification to avoid fraud.
Single truth of information with Distributed Ledger Technology feature to prevent dispute.
Addresses “information silo” problem Trade information is no longer trapped within different information sources because the solution aims to build up connections with various information sources, e.g. carrier, custom, forwarder, insurance company.
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Back to Hall of Fame
Traditionally, international trade process highly relies on paper document transmission and verification to fulfill client’s various requirements such as shipping and financing. Each transaction costs various trade participants tremendous processing manpower and time. In addition, the potential risk of missing document and forged document is quite high. In order to solve those pain points, CTBC leveraged blockchain technology to achieve un-repudiation and authenticity of document, and synchronizes different participants’ ledgers via consensus mechanism. The solution saves the importer 2 to 4 days of waiting time as compared to traditional process in a proof of concept transaction. This innovative process not only accelerates the entire international trade process but also enables bank to fully monitor trade progress and enhance risk control of trade-based product. Meanwhile, by utilizing this mechanism, shipping providers can also improve its document management.
Moreover, as various trade information are trapped with different information sources, “information silo” is formed. This solution aims to build up an integrated system receiving comprehensive trade information from different platforms/providers/sources and processing these information based on financial product logic accordingly. By doing so, CTBC’s clients and operation staff can handle trade finance process easily and efficiently.
Highlights
Digitized document instead of original hard copy.
Transaction verification to avoid fraud.
Single truth of information with Distributed Ledger Technology feature to prevent dispute.
Addresses “information silo” problem Trade information is no longer trapped within different information sources because the solution aims to build up connections with various information sources, e.g. carrier, custom, forwarder, insurance company.