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Blockchain solution aims to stop trade invoice fraud

Asia / 30-08-17 / by
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blockchain fraud

A new blockchain-based solution has been launched with the aim of stopping the double financing of invoices.

The tool allows banks and factors to check if another funder has already paid an invoice, by cross-referencing it against a blockchain-based central registry.

Trade finance is rife with cases of document duplication and the industry is currently exploring ways in which blockchain can be used to prevent these cases of fraud. Earlier this year, warehousing company Access World experienced a number of cases of warehouse receipt duplication, while the costs of the Qingdao fraud, which also involved multiple warehouse receipts, are still being counted.

Invoice Check from Trade Finance Market (TFM), a Singapore-based fintech company, is one of the early products to launch with this aim in mind. It has been developed over the past year on the Ethereum platform and uses smart contracts.

“Our system is in public beta and provides a manual method of entering invoices and having them checked against a blockchain-hosted database. A bank or factoring company simply enters basic invoice parameters to perform an initial check in less than 30 seconds. This data is stored on the blockchain and funders are alerted if there is a potential risk of double financing,” Raj Uttamchandani, the company’s executive director, tells GTR.

He adds: “We have received an enthusiastic response from factoring organisations and governments to ensure wide adoption and usage of the tool – especially in markets where there is no central registry on which to register a charge or enforcement takes a long time. We have also received a high level of interest in markets where peer-to-peer platform usage has grown, as Invoice Check can help with de-risking spot factoring and single invoice transactions. Making the basic version of the tool free is also key in lowering friction to usage.”

The company is working with trade finance organisations globally, he says, to garner invoice data, which is currently entered manually by banks and factors. The next step is to automate the process and to on-board more financial institutions, so that the registry is comprehensive. “By providing this data, the industry as a whole benefits – which is why we made it a public good and free to use,” Uttamchandani says.

The initial pain point TFM is trying to address is SME financing – or lack thereof. The company already has a trade finance lending platform, and has found that the inability to validate invoices provides an obstacle for SMEs in getting finance.

It has also built a tool called Collateral Check, which provides a registry for warehouse receipts, which will be available in beta launch later in August. Combined, this suite of tools has the potential to improve risk management processes – but it all depends on buy-in, in order to build a comprehensive database.

Why blockchain?

The theory behind blockchain preventing fraud in trade finance stems from its immutability. Once information is lodged on the blockchain, it cannot be distorted or duplicated. It is stored, digitally in – as blockchain evangelists like to tell us – “a single instance of the truth”.

Uttamchandani says the company is still assessing how useful it is at eradicating fraud, looking at it from two angles.

“The blockchain is just like any other database, so the data on the blockchain is only as good as its source. If fraudulent data goes in then the blockchain cannot solve that problem. We can run artificial intelligence algorithms on the blockchain data to stop fraud but blockchain itself cannot eradicate it,” he explains.

The second one is around the adoption of common standards. “Right now, with many legacy systems and competing private blockchain initiatives, this may take a long time to achieve – especially if one considers a consortium of financial entities who will all have to work together with governments, logistics providers, tech companies, ports, etc. Just look at the bank payment obligation (BPO), even though it was promoted by Swift, adoption has been slow,” he says.

This has prompted TFM to look towards “specific niche areas where we can solve small real-world problems”. The company is trying to use blockchain to fix a known problem, in other words, rather than be the solution to all the issues with trade finance.

There have already been a number of other tools launched in this space. LMEshield from the London Metals Exchange is a central electronic register “providing global off-warrant commodity receipting”. Again, it helps to alleviate problems around document duplication (off the blockchain) but relies on all parties involved being registered on the solution.

Meanwhile, in 2015, DBS and Standard Chartered became the first banks to develop a trade finance application on blockchain, when a proof of concept (PoC) was launched that tracked invoices, backing loans to suppliers, reducing risk of invoice duplication, while retaining client confidentiality.

At the time of the launch, Gautain Jain, global head of digitisation and client access for transaction banking at Standard Chartered, told GTR: “We believe we can substantially reduce the risk of duplicating invoice financing using the distributed ledger and soon we will start looking at other trade instruments like the bill of lading. In time, we believe that the assembly of all the various documentation and processing stages involved in a trade transaction can happen on a distributed ledger.”

Since then, countless PoCs have been launched, but the industry is still awaiting a fully-commercialised and widely-used blockchain solution. As yet, you can count the number of live transactions involving multiple banks on blockchain on one hand.

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Privacy Policy

Our privacy commitments

This Privacy Policy outlines the information we may collect about you in relation to your use of our websites, events, related publications and services (“personal data”) and how we may use that personal data. It also outlines the methods by which we and our service providers may (subject to necessary consents) monitor your online behaviour to deliver customised advertisements, marketing materials and other tailored services. This Privacy Policy also tells you how you can verify the accuracy of your personal data and how you can request that we delete or update it.

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To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

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Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

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Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

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All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.

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Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller


The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
  • E-mail: privacy@gtreview.com

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

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  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.