Emirates NBD and ICICI Bank have partnered with a subsidiary of Indian tech giant Infosys on a pilot blockchain solution for trade finance and remittances.
The banks become the first in the UAE and India, respectively, to pilot blockchain-based network for these purposes.
The scheme was started eight weeks ago and was successfully implemented along the UAE-India remittance and trade corridors. The banks are now working towards a network consortium, which will allow other banks to join the transaction network.
Once the blockchain network is up and running, the banks expect to automate interbank processes using smart contracts, secure digital exchange of documents and real-time monitoring of positions through integrated dashboards.
The pilot scheme saw trade finance purchase order and invoice financing processes executed on the blockchain network, which achieved a “near real-time transfer of invoices and purchase orders in a transparent and secure manner”.
Both banks use the Finacle Universal Banking Suite, Infosys’ main offering in the sector, which is operated by subsidiary EdgeVerve Systems. The blockchain network was integrated into this suite and other host systems on the banks’ respective infrastructure.
The overall aim is cost reduction: the network will allow automation of important trade finance functions and both banks are now looking for additional processes that could be included on it.
“I envision that the emerging technology of blockchain will play a significant role in banking in the coming years by making complex bilateral and multi-lateral banking transactions seamless, quick and more secure. Going forward, we also intend to work on expanding the blockchain ecosystem and create common working standards to contribute to the commercial adoption of this initiative,” says Chanda Kochhar, managing director of ICICI Bank.
Vishal Sikka, the CEO of Infosys, adds: “With this pilot, we are clearly a step closer to seeing mainstream adoption of blockchain-based applications. We look forward to further collaborations with our clients and other banks to create a blockchain-powered consortium in the financial services industry.”