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Banks unveil roadmap for we.trade blockchain platform

Fintech / 24-10-17 / by
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Founding member banks of the Digital Trade Chain (DTC) consortium, now re-branded as we.trade, are taking the final steps to bringing their blockchain trade finance platform for European SMEs into production and are enticing the wider banking community to join the project.

The consortium, which includes Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit, briefed the market on their progress and future plans at the Sibos conference in Toronto last week. Chief amongst the platform’s latest developments were: the addition of Santander as a founding member, bringing the total number to eight; a name change – the platform now goes under the name we.trade, which the consortium feels is a “stronger brand name”; and the intention to establish a not-for-profit joint venture company (JVCo) by the end of the year, in Ireland, to manage and distribute the platform. The JVCo will be co-owned by the eight founding member banks.

For the first time, during a panel discussion at the conference, the eight banks also outlined a roadmap for full deployment of the platform and the onboarding of additional banks, a list of comprehensive benefits for both banks and their clients, and options for add-ons further down the line.

 

The finer details

We.trade is a digital platform for managing, tracking and protecting trade transactions between SMEs. It harnesses both distributed ledger technology (DLT) and smart contracts: it links the parties involved in trade (the buyer, buyer’s bank, seller, seller’s bank and transporter) and registers the entire trade process, from order to payment, displaying it in an at-a-glance, user-friendly interface, and guaranteeing automatic payment when all contractual agreements have been met. The platform is fully automated and available 24/7, making the order-to-payments process quicker than the traditional exchange of documents.

In order to use the platform, companies have to be clients of the banks involved. This is not only a technical requirement – the banks need to perform the appropriate know your customer (KYC) procedures on all the companies that transact on the platform. However, companies themselves are not onboarded onto the platform.

IBM was selected by the consortium as the project’s IT vendor earlier this year, and is currently in the process of developing the platform, which will be powered by Hyperledger Fabric 1.0.

“We’re now well down the track as far as the delivery of the platform software is concerned,” Keith Bear, vice-president of financial markets at IBM, told GTR at Sibos.

The platform is being built with API (application programming interface) layers, which will allow each of the participating banks to be onboarded either through ‘software as a service’ (SaaS) (cloud) or on-premises (computer or server-based) software, depending on the bank’s capabilities.

“The immediate focus is around SME-to-SME trade, providing interfaces to track and trace, so that the positioning of goods, payments, invoice financing – all elements of the lifecycle in that part of the transaction, are captured on the blockchain,” explained Bear. “But, we’re not, for example, on the platform itself bringing shipping agencies onto the blockchain – it’s done through APIs. That’s one of the reasons why the time to market is as early as it is.”

 

Efforts to scale up

The founding member banks are now in the process of marketing the solution to their peers in order to build scale.

“It’s not a private club of eight banks, but a solution that we also want to make available to other banks,” Roberto Mancone, global head of disruptive technologies and solutions at Deutsche Bank, told the audience at Sibos. “The concept is not to grab market share from the others, but to try and create consensus among the banks. We’re ready to go live soon, which is why we’re presenting this opportunity to you today.”

Mancone outlined the consortium’s plans for the roll out of we.trade: a joint venture company will be established by the end of November; release 1.0 of the platform will go live with test clients in February 2018; and, at the start of Q2, it will have full deployment to the market, and will also begin onboarding new banks. Project governance has already been agreed and set up: a legal entity has been appointed and shareholder structure has been settled.

Expansion of the platform is targeted for the whole of Europe, and beyond.

“This is just the start,” said Vinay Mendonca, global head of product and propositions, global trade and receivables finance at HSBC, speaking on stage at Sibos, adding that he expects adoption of the platform to grow to the bank’s entire global footprint.

Mendonca noted that the platform has been of particular interest to HSBC because it is focused on the open account space, where the market is currently seeing faster growth compared to more traditional trade finance instruments. The fact that the platform may help banks to generate new revenue streams in this space was highlighted as a distinct incentive for banks to join the project.

The Sibos panel was also keen to expound to the audience that – perhaps unlike its rivals in the trade finance industry – much work has already gone into developing the platform, and that it has far surpassed the “design thinking” phase. Mancone noted that the 150 people involved in the development work have racked up more than 500 conference calls and 120 meetings thus far.

“This is not a platform where we ask banks to join to build it, this platform will be built and delivered, so that even those banks that don’t have the capacity, or the knowledge, or the full ability to develop something will be able to join,” he explained.

The platform’s timescale has been hailed as one of its key differentiators: “Other initiatives out there are targeted at the end of next year in terms of being in production, so the fact that this is going to be in production in the early part of next year is a reflection on the fact that it will be a significant achievement,” IBM’s Bear told GTR.

The consortium has implemented a “first-in, first-served” principle for onboarding, and banks that are not able to join today can lock in an “onboarding slot” for a future date.

For the companies, in addition to real-time tracking and tracing of where their shipment is and conditional settlement through the banking system, a chief benefit is the ability to identify any known counterparts in their supply chains. “Later on, clients may start to rate each other, based on reliability, timely delivery and timely payment,” Mancone said.

In time, other non-financial banking services will be added to the platform – which will be key for its development.

“If we integrate the physical supply chain into the platform, then we can do pre-shipment finance, and, sure, there is a performance risk, but if the deal is done, at the end, the payment will come through the platform, so [banks] will get paid,” explained Anne-Claire Gorge, global head of product management, trade services, at Société Générale, speaking on the Sibos panel.

 

Commercial structure

The topic of fees dominated the conversation during the audience Q&A, with many seeking further clarity on the platform’s pricing. They were told that – as is the case today – banks on the platform will be welcome to price their services in a way that they feel is appropriate.

Banks will pay SaaS fees – to onboard, maintain the platform and help build out the roadmap. The panellists agreed that the valued added to banks – regardless of size – will be “totally proportionate to the costs”, but they did not clarify if a standard fee will apply to banks of all sizes.

Questions also arose on the commercial structure of the platform itself, and the differentiation between the founding member “shareholder” banks and those that subsequently sign up to the platform.

Although the consortium said that it hasn’t ruled out further capital rounds and additional shareholders further down the line, its plan is not to grow the founding member banks for the time being. The intention now is to have as many banks as possible – and as quickly as possible – onboarded to the platform on a licence-type basis.

Nevertheless, the founding members stressed that there will be no difference in user experience for any of the banks’ clients and that all banks involved in the platform – consortium member or not – will be involved in its future development.

“It’s much easier to join as a member bank, to buy the licence, than to become a shareholder, so it will be faster too,” said Société Générale’s Gorge.

The consortium credits its nimbleness thus far to date with the fact that it has remained a relatively small group.

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Privacy Policy

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On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

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Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

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Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
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4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.

 

Why do we use cookies?

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Find and control your cookies

All of the major browser providers offer advice on setting up and using the privacy and security functions for their products. If you require technical advice or support for a specific browser/version please contact the provider or visit their website for further details: www.microsoft.com / www.mozilla.com / www.apple.com
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We may use cookies to:

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Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting www.allaboutcookies.org which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

6.      E-mail tracking

E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

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To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

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You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

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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.

9.      Public forums, message boards and blogs

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:

  • erased
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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.