Nine European banks behind the we.trade blockchain platform for trade finance will be making their product live this month, before bringing it to the wider market “after summer”.
That’s according to members of the we.trade banking consortium speaking at a panel at last week’s Money2020 fintech conference in Amsterdam.
Powered by the Hyperledger Fabric blockchain framework, we.trade is a platform for managing, tracking and protecting open account trade transactions between SMEs. It will connect parties involved in a trade deal in one place, help SMEs initiate new trading relationships as well as provide easy access to trade finance.
The nine founding members are Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale and UniCredit, while IBM is the IT vendor. In April, the banks took a crucial step toward the commercialisation of we.trade, creating a legal entity to manage and distribute the platform.
Now, two months later, the consortium is edging closer to making we.trade available to their corporate clients, with Roberto Mancone, COO of we.trade, saying the product will be launched as soon as this month.
Joost Volker, lead product manager of trade at Rabobank, also speaking on the panel in Amsterdam, noted: “We are now in a production environment. The system is delivered and we will do the first transactions in June. So it’s not just that we are testing and trying to figure out what to do, this is really about bringing the product live.”
He added that the consortium will then “use the period after summer for a large roll-out” to the larger market, which he hinted was a strategic decision. “If you do it now, it’s summer time, it’s much harder to bring it to the market, so we really want to use the momentum,” he said.
We.trade has been under way for about 18 months. Originally known as Digital Trade Chain, the project was born in January 2017 when a group of banks signed a memorandum of understanding to collaborate on the development. Six months later, the consortium chose Hyperledger Fabric over R3’s Corda as the blockchain framework when it selected IBM as the project’s IT vendor. In October, the project rebranded as we.trade, before forming the joint venture in April.
The project has seen some delays, with the original timeline expecting the platform to have full deployment to the market at the start of Q2. According to Mancone, additional work had to be done to ensure the application was compliant with Hyperledger Fabric 1.1, a version of the framework that was released in March.
However, the panellists at Money2020 emphasised that most of the challenges and work over the course of the project has been less around the technical development, and more on the standardisation of processes and the products itself.
“Our journey in the last 18 months has seen a complete differentiation between the technical challenge, which would be around 20% and the rest, the 80%, is actually to formalise a standardisation between the different organisations,” said Raphael Barisaac, global co-head of trade finance at UniCredit.
Chantal Van Haute, business development and innovation manager for trade finance at KBC, added: “It’s not only about building the IT solution, but it’s also creating the value proposition, preparing to go-to-market, but also building a legal framework. We are very excited to go live now,” she said, optimistic that we.trade will help KBC and the other banks serve more SMEs engaged in cross-border trade.
The next stage of the we.trade project, which will begin after the platform is live, is to expand to additional markets in Europe and beyond by onboarding new banks. The consortium will make we.trade available for others to join on a licence-type basis, which will enable it to expand the platform to as many banks as possible – and as quickly as possible.