Hong Kong-based blockchain platform eTradeConnect has revealed the successful completion of two new proofs-of-concepts with CargoSmart and PwC to boost its efficiency in facilitating the financing of trade.
Both initiatives look to find ways to transform the paper-heavy trade finance process in shipping to a streamlined, digitised version, whereby customers can easily and securely exchange their trade, financing and shipping information.
eTradeConnect is a blockchain platform launched by 12 banks in September 2018 and aimed at digitising open account transactions. Based on Hyperledger Fabric, the solution is built by OneConnect, the fintech arm of Chinese insurance firm Ping An Group, and run by Hong Kong Trade Finance Company.
The first proof-of-concept between the parties has been designed to demonstrate to lenders and their trade finance customers that if ocean carriers and terminals can share shipping information on a real-time basis it would prove more efficient for all parties. In turn, with real-time data on cargo available, the system will also validate how this digital process can reduce financing risk.
eTradeConnect and smart shipping solutions provider CargoSmart completed the proof-of-concept with banks, including Bank of China, the Bank of East Asia, HSBC and Standard Chartered, and ocean carriers, including Cosco Shipping Lines. The initiative, facilitated by PwC as project manager, verified the “feasibility of data exchange” from the financing and shipping cycles on a need-to-know basis.
eTradeConnect has also entered discussions with CargoSmart and other shipping industry participants that are proposing to form a Global Shipping Business Network (GSBN). The aim is for GSBN to focus on how the banking and shipping industries can work together to create value for their mutual customers. eTradeConnect and GSBN plan to join forces once the network is fully formed.
The second proof-of-concept aims to integrate eTradeConnect with customer procurement systems. ERP.Connect, a digital asset designed by PwC, enables connection among platforms for documents and data relating to corporate procurement and order management to facilitate trade financing. It allows corporate treasurers to access immediate financing options through their existing ERP systems, making working capital more readily available. eTradeConnect and PwC have been working together over the past few months to validate the integration between the eTradeConnect platform and ERP.Connect.
Participating banks in this proof-of-concept include DBS Bank, HSBC and Standard Chartered.
Several attempts are being made to make the trade finance process in the shipping industry more efficient. Incomlend, a Singapore-based invoice finance platform, launched a new platform to provide trade finance services to clients of shipping and logistics group CMA CGM. Shipfin Trade Finance will make available factoring and supply chain finance to exporters and importers across CMA CGM’s network. Meanwhile, Danish conglomerate Maersk has also invested in a technology platform that provides digital import and export finance solutions for SMEs. It has also linked up with tech giant IBM on TradeLens, an industry-wide supply chain solution using blockchain technology.