CGI has together with Bank of Montreal, Royal Bank of Canada and MUFG completed what they claim is a “first-ever” proof of concept to enable banks to easily integrate blockchain capabilities with their existing trade finance platforms.
The PoC specifically tested the interoperability between CGI’s Trade360, a trade finance platform used by 19 banks in more than 90 countries worldwide, and Skuchain’s blockchain-powered Brackets platform for smart contracts.
Integrating the two platforms, the parties proved the streamlined processes for digital trading – including sales agreement creation via a smart contract, the issuance of a letter of credit, the presentation of documents, bank examination and payment notification – with all documents delivered electronically and instantaneously.
Interoperability is a crucial step to get new blockchain platforms working with the banks’ current systems and product offerings. It enables banks to give their customers the benefits of blockchain technology, while leveraging their existing investments in operating models and trained staff.
According to Srinivasan Sriram, CEO of Skuchain, a fintech company, the PoC represents the “the first integration of two production-grade systems to provide a blockchain-based trade finance platform for commercial use in the near future”.
Having worked together on the project since August last year, CGI and Skuchain kicked off the actual PoC with the three banks two months ago. The announcement that it had been successful was made this week at Sibos, one of the world’s largest finance conferences.
Speaking to GTR, Nancy Amert, director of CGI’s trade innovation lab, could for confidentiality reasons not comment on when the new software will be available to the 19 banks using the Trade360 platform. But she says the parties will begin “working on a commercialisation analysis next week”, which will “set the stage for where we go next”.
When live, the software will enable the banks’ clients to join the Skuchain portal – a blockchain B2B commerce network – directly through the Trade360 platform, and for the banks to provide trade finance services digitally via the network. This is all done via an API (application programming interface), which is the technology that enables different platforms, apps and systems to easily connect and share data with each other
“The buyer or seller would be able to select how they wish to process their letter of credit: either the traditional pathway or the Skuchain-enabled processing,” Amert says. “What this means is that it keeps banks relevant within the marketplace, taking the letter of credit product that normally could take days, weeks, sometimes even months to complete, down to a matter of minutes.”
Harnessing blockchain technology, the software not only makes the processing of trade finance quicker – it also provides greater visibility for a customer into its supply chain and ensures accountability through unalterable audit trails.
“The real thing that is going to be phenomenal if you are a buyer or a seller is that on one single screen you can see the status of the various levels of the transaction,” Amert explains. “So you’ll know when the contract is expected, when it’s signed off electronically, when other documents have been put into place. It’s almost like UPS or FedEx tracking information on your package. We are able to monitor – using the statuses on the blockchain – where various documents are and who is passing what information between the parties in the transaction.”
While the PoC tested the interoperability with just one product – the letter of credit – CGI is now lined up to easily implement blockchain into a broader set of trade finance products. “We are just getting started,” Amert says, adding that the Trade360 platform offers more than 50 trade products.
CGI is also working on a number of other blockchain projects, including a collaboration with R3 and 13 global banks to build a trade finance application on the Corda platform. According to Amert, CGI will similarly be looking at developing software to make its platform interoperable with Corda.