As a new way to secure the transfer of value, blockchain technology promises to increase collaboration, automation and oversight in trade finance transactions.
Blockchain for Trade Finance: Payment Method Automation (Part 2)Cognizant
By modeling payments as self-executing contracts on blockchain, parties across the trade finance continuum could automate contract compliance and ensure faster assured payments by preventing disputes that arise from ambiguities in payment contract terms and conditions.
Blockchain for Trade Finance: Payment Instrument Tokenization (Part 4)Cognizant
Digitizing payment instruments in post-shipment financing on blockchain prevents invoicing fraud, reduces business risk for financial institutions and lowers overhead when issuing and managing trade receivables.
Blockchain for Trade Finance: Trade Asset Tokenization (Part 3)Cognizant
By tokenizing the trade asset on blockchain and digitally managing trade documents, organizations can obtain delivery assurance, improve risk management for buyers and sellers, and prevent losses.
Blockchain and trade finance- How does Blockchain work in trade finance?Zabeel Institute
Blockchain and trade finance modern technology allow the recording of purchases on a distributed ledger across a network of individuals. The data from these deals is stored in blocks. Each block consists of a time-stamped document of the purchases.
This article discusses and explains to you Blockchain and trade finance, how does Blockchain work in trade finance?
The Article explores the possibility of Blockchain being the Saviour of the Banks.
The article was republished in Journal of Insitute of Bankers of Pakistan - July 2018
FirstPartner's 2016 Blockchain Ecosystem Market Map helps to decrypt the blockchain landscape with a visual overview of the emerging ecosystem, players, technologies and trends. It clearly summarises three main areas of focus emerging around the core blockchain or distributed ledger protocols:
1) Bitcoin and Cryptocurrencies: Providing an alternative to centrally managed "fiat" currencies, this sector includes Bitcoin exchanges, Bitcoin wallets, miners and cryptocurrency payment processors. The map illustrates how these companies interact and features some leading players including Coinbase, Circle, Kraken and 21 Inc.
2) The Financial Services Blockchain: This has been the main area of focus over the last 12 months as attention shifts from Bitcoin to Financial Services applications. An increasing number of players are focussing on commercialising blockchain technologies for banks, securities, derivatives and asset markets and institutional investors - and are attracting VC funding to do so. Ripple and Ethereum are leading candidate protocols for payment processing and smart contracts and players including Ripple, Chain and Digital Asset Holdings are gaining traction with Financial Institutions. The Map highlights leading technology companies and some of the banks, card schemes and processors who are investing in or evaluating distributed ledger technologies.
3) Other Use Cases: The distributed ledger concept and its ability to support transparent and tamper-proof asset registration, proof of ownership and asset transfer transactions makes it potentially applicable to multiple non financial use cases. The Map highlights a number of candidate use cases including publishing, legal, distributed data storage, document management and IoT. Some of the pioneering initiatives and companies exploring these applications are included.
Crucially the Map also provides a clear pictorial explanation and summary of the leading protocols at the heart of the ecosystem and concepts including coloured coins and smart contracts that supplement them to make a number of the proposed services possible.
A printable version of the map can be downloaded from www.firstpartner.net.
Blockchain for Trade Finance: Payment Method Automation (Part 2)Cognizant
By modeling payments as self-executing contracts on blockchain, parties across the trade finance continuum could automate contract compliance and ensure faster assured payments by preventing disputes that arise from ambiguities in payment contract terms and conditions.
Blockchain for Trade Finance: Payment Instrument Tokenization (Part 4)Cognizant
Digitizing payment instruments in post-shipment financing on blockchain prevents invoicing fraud, reduces business risk for financial institutions and lowers overhead when issuing and managing trade receivables.
Blockchain for Trade Finance: Trade Asset Tokenization (Part 3)Cognizant
By tokenizing the trade asset on blockchain and digitally managing trade documents, organizations can obtain delivery assurance, improve risk management for buyers and sellers, and prevent losses.
Blockchain and trade finance- How does Blockchain work in trade finance?Zabeel Institute
Blockchain and trade finance modern technology allow the recording of purchases on a distributed ledger across a network of individuals. The data from these deals is stored in blocks. Each block consists of a time-stamped document of the purchases.
This article discusses and explains to you Blockchain and trade finance, how does Blockchain work in trade finance?
The Article explores the possibility of Blockchain being the Saviour of the Banks.
The article was republished in Journal of Insitute of Bankers of Pakistan - July 2018
FirstPartner's 2016 Blockchain Ecosystem Market Map helps to decrypt the blockchain landscape with a visual overview of the emerging ecosystem, players, technologies and trends. It clearly summarises three main areas of focus emerging around the core blockchain or distributed ledger protocols:
1) Bitcoin and Cryptocurrencies: Providing an alternative to centrally managed "fiat" currencies, this sector includes Bitcoin exchanges, Bitcoin wallets, miners and cryptocurrency payment processors. The map illustrates how these companies interact and features some leading players including Coinbase, Circle, Kraken and 21 Inc.
2) The Financial Services Blockchain: This has been the main area of focus over the last 12 months as attention shifts from Bitcoin to Financial Services applications. An increasing number of players are focussing on commercialising blockchain technologies for banks, securities, derivatives and asset markets and institutional investors - and are attracting VC funding to do so. Ripple and Ethereum are leading candidate protocols for payment processing and smart contracts and players including Ripple, Chain and Digital Asset Holdings are gaining traction with Financial Institutions. The Map highlights leading technology companies and some of the banks, card schemes and processors who are investing in or evaluating distributed ledger technologies.
3) Other Use Cases: The distributed ledger concept and its ability to support transparent and tamper-proof asset registration, proof of ownership and asset transfer transactions makes it potentially applicable to multiple non financial use cases. The Map highlights a number of candidate use cases including publishing, legal, distributed data storage, document management and IoT. Some of the pioneering initiatives and companies exploring these applications are included.
Crucially the Map also provides a clear pictorial explanation and summary of the leading protocols at the heart of the ecosystem and concepts including coloured coins and smart contracts that supplement them to make a number of the proposed services possible.
A printable version of the map can be downloaded from www.firstpartner.net.
Blockchain would be the most likely and viable solution of Anti Money Laundering problems. Banking, financial as well as non financial industries along with regulators can benefit from this tecchnology
Reshaping trade finance towards a new letter of credit (exec sum)Andrea Frosinini
An article detailing the innovations led by new technologies, already in place, deatiling the advantages for all the parties involved in international transactions
B12: AMLO | FinTech Situation in Thailand and Offshore and Money Laundering R...Kullarat Phongsathaporn
"AMLO Seminar and Workshop regarding new types of financial transactions: FinTech and Financial Inclusion" by AMLO, Panelist for "FinTech Situation in Thailand and Offshore and Money Laundering Risks" (4 Jul 2019)
How Retirement Services Providers Can Tap Blockchain Thinking and TechnologyCognizant
Blockchain's peer-to-peer transference technology offers numerous benefits - digital trust, operational improvement and cost reduction, enhanced customer experience, and business resilience. We offer a vision of blockchain technology's potential applications - experimental use cases - for the retirement services industry.
The financing of the international trade of goods — and the underwriting thereof — implicate a many-staged process of manufacture, storage, movement, delivery, inspection, and vending. The parties involved are many. The documentation of rights and responsibilities used to fill a small library of paper, and now involves paper, electronic communication, and some digital information transfer. Many points of delay and potential contention persist. Can blockchain clean this up? What other technological developments are reshaping trade finance?
Part of the webinar series: Blockchain Basics 2021
See more at https://www.financialpoise.com/webinars/
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Blockchain is often cited as one of the most impactful technology along with AI. It has attracted many startups, venture investments, and academic research. If successful, Blockchain technologies can transform the way, we live our day to day lives.
However, blockchain faces significant challenges such as performance, irrevocability, need for regulation and lack of census mechanisms. They are hard problems, and likely it will take at least 5-10 years to find answers to those problems.
Given the risk involved as well as the significant potential returns, we recommend a cautiously optimistic approach for blockchain with the focus on concrete use cases.
Decrypting Insurance Broking through BlockchainCognizant
Blockchain technology could help brokers maximize their operational efficiencies by using smart contracts to automate key processes, freeing them to focus on value-added services that drive customer loyalty.
Digital assets are on the verge of becoming the next big thing in the market. Companies are getting prepared for digital assets with Blockchain technology. Blockchain technology will help companies to manage and keep control over digital assets. This technology will help in transacting and trading digital assets in real-time.
Distributed Ledgers: Possibilities and Challenges in Capital Markets Applicat...Cognizant
Distributed ledgers - blockchain technology - stands to make numerous financial services activities more secure, autonomous, and efficient. Here's a walk-through of a range of potential use cases: IPO issuance, trade agreements and settlements, confirmations, etc. and a strategy for transition.
Block-chain technology can reduce transaction costs, generate distributed trust, and empower
decentralized platforms, potentially becoming a new foundation for decentralized business
models. In the financial industry, blockchain technology allows for the rise of decentralized
financial services, which tend to be more decentralized, innovative, interoperable, borderless, and
transparent. Empowered by blockchain technology, decentralized financial services have the po-
tential to broaden financial inclusion, facilitate open access, encourage permissionless innovation,
and create new opportunities for entrepreneurs and innovators. In this article, we assess the
benefits of decentralized finance, identify existing business models, and evaluate potential chal-
lenges and limits. As a new area of financial technology, decentralized finance may reshape the
structure of modern finance and create a new landscape for entrepreneurship and innovation,
showcasing the promises and challenges of decentralized business models.
KYC optimization using Block chain TechnologyShobhita Jain
This presentation is a result of my summer internship consisting of secondary data research involving entities like HDFC Bank Ltd., Block chain technology and KYC Procedures.
The Work Ahead: How Data and Digital Mastery Will Usher In an Era of Innovati...Cognizant
In this installment of our Work Ahead series, we focus on the impact of digital transformation on the life sciences industry and what it will take to transform an industry value chain in need of drastic modernization.
How Blockchain Can Reinvigorate Facultative Reinsurance Contract ManagementCognizant
Blockchain is ideally suited for streamlining and securing the cumbersome facultative reinsurance contract management process by offering trust and transparency and all the benefits of smart contracts.
Blockchain would be the most likely and viable solution of Anti Money Laundering problems. Banking, financial as well as non financial industries along with regulators can benefit from this tecchnology
Reshaping trade finance towards a new letter of credit (exec sum)Andrea Frosinini
An article detailing the innovations led by new technologies, already in place, deatiling the advantages for all the parties involved in international transactions
B12: AMLO | FinTech Situation in Thailand and Offshore and Money Laundering R...Kullarat Phongsathaporn
"AMLO Seminar and Workshop regarding new types of financial transactions: FinTech and Financial Inclusion" by AMLO, Panelist for "FinTech Situation in Thailand and Offshore and Money Laundering Risks" (4 Jul 2019)
How Retirement Services Providers Can Tap Blockchain Thinking and TechnologyCognizant
Blockchain's peer-to-peer transference technology offers numerous benefits - digital trust, operational improvement and cost reduction, enhanced customer experience, and business resilience. We offer a vision of blockchain technology's potential applications - experimental use cases - for the retirement services industry.
The financing of the international trade of goods — and the underwriting thereof — implicate a many-staged process of manufacture, storage, movement, delivery, inspection, and vending. The parties involved are many. The documentation of rights and responsibilities used to fill a small library of paper, and now involves paper, electronic communication, and some digital information transfer. Many points of delay and potential contention persist. Can blockchain clean this up? What other technological developments are reshaping trade finance?
Part of the webinar series: Blockchain Basics 2021
See more at https://www.financialpoise.com/webinars/
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Blockchain is often cited as one of the most impactful technology along with AI. It has attracted many startups, venture investments, and academic research. If successful, Blockchain technologies can transform the way, we live our day to day lives.
However, blockchain faces significant challenges such as performance, irrevocability, need for regulation and lack of census mechanisms. They are hard problems, and likely it will take at least 5-10 years to find answers to those problems.
Given the risk involved as well as the significant potential returns, we recommend a cautiously optimistic approach for blockchain with the focus on concrete use cases.
Decrypting Insurance Broking through BlockchainCognizant
Blockchain technology could help brokers maximize their operational efficiencies by using smart contracts to automate key processes, freeing them to focus on value-added services that drive customer loyalty.
Digital assets are on the verge of becoming the next big thing in the market. Companies are getting prepared for digital assets with Blockchain technology. Blockchain technology will help companies to manage and keep control over digital assets. This technology will help in transacting and trading digital assets in real-time.
Distributed Ledgers: Possibilities and Challenges in Capital Markets Applicat...Cognizant
Distributed ledgers - blockchain technology - stands to make numerous financial services activities more secure, autonomous, and efficient. Here's a walk-through of a range of potential use cases: IPO issuance, trade agreements and settlements, confirmations, etc. and a strategy for transition.
Block-chain technology can reduce transaction costs, generate distributed trust, and empower
decentralized platforms, potentially becoming a new foundation for decentralized business
models. In the financial industry, blockchain technology allows for the rise of decentralized
financial services, which tend to be more decentralized, innovative, interoperable, borderless, and
transparent. Empowered by blockchain technology, decentralized financial services have the po-
tential to broaden financial inclusion, facilitate open access, encourage permissionless innovation,
and create new opportunities for entrepreneurs and innovators. In this article, we assess the
benefits of decentralized finance, identify existing business models, and evaluate potential chal-
lenges and limits. As a new area of financial technology, decentralized finance may reshape the
structure of modern finance and create a new landscape for entrepreneurship and innovation,
showcasing the promises and challenges of decentralized business models.
KYC optimization using Block chain TechnologyShobhita Jain
This presentation is a result of my summer internship consisting of secondary data research involving entities like HDFC Bank Ltd., Block chain technology and KYC Procedures.
The Work Ahead: How Data and Digital Mastery Will Usher In an Era of Innovati...Cognizant
In this installment of our Work Ahead series, we focus on the impact of digital transformation on the life sciences industry and what it will take to transform an industry value chain in need of drastic modernization.
How Blockchain Can Reinvigorate Facultative Reinsurance Contract ManagementCognizant
Blockchain is ideally suited for streamlining and securing the cumbersome facultative reinsurance contract management process by offering trust and transparency and all the benefits of smart contracts.
The Blockchain Imperative: The Next Challenge for P&C CarriersCognizant
Blockchain, a universal ledger and data-storage platform, can help P&C carriers address some of their most critical business challenges and significantly alter the way they operate. Although the technology has yet to achieve widespread adoption in the insurance space, the time is ripe for carriers to begin thinking about, exploring and experimenting with blockchain.
The Chatbot Imperative: Intelligence, Personalization and Utilitarian DesignCognizant
To boost business outcomes and deliver superior experiences, chatbots must quickly deliver responses that speak directly to individual human needs and apply meaningful responses to evolving requirements over time.
By delving deeply into customer experience, business process design and operating model change, organizations can more effectively move from 'doing' digital to 'being’ digital.
Digital Business 2020: Getting There from Here, Part IICognizant
This issue of Cognizanti journal is dedicated to the simplicity promised by digital business. The articles illuminate the possibilities and pitfalls on the path to digital business, including a deep dive into quality assurance, human-centric design, intelligent process automation, digital consumer preferences and disruptions to the banking and healthcare industries, as well as ideas and inspiration for established businesses to jumpstart and benchmark their digital journeys.
Beyond Omnichannel: Determining the Right Channel MixCognizant
Many companies believe that simply adding more customer channels or reducing the time it takes to handle customer queries will boost customer satisfaction and enhance the customer experience. Yet the proliferation of digital technologies and touchpoints have made it more difficult to track customer preferences and purchasing traits. By identifying customers’ preferred contact channels, companies can more effectively engage, serve, and retain them while driving profitable growth.
Running at the Speed of Digital: Hyper-Digital Information ManagementCognizant
Consumers’ need for instant access to information through multiple channels is growing. While some companies in specific segments of the IS industry offer impressive capabilities, none provide the full range of technologies and resources needed to support a cohesive, all-inclusive, digitally-equipped environment for analyzing, ingesting, managing, and delivering content across the value chain. In a hyper-digital environment, IS organizations can distribute content at breakthrough speeds — anytime, anywhere.
A Framework for Digital Business TransformationCognizant
By embracing Code Halo thinking and a programmatic approach to business process change, organizations can better engage with customers and deliver mass-customized products and services that drive differentiation and outperformance.
Gamification for Insurers: A Practitioner’s PerspectiveCognizant
Gamification for insurance companies employs traditional game elements – including badges, leaderboards, points, and quests – to improve organizational efficiency and increase customer engagement. Gamification can function as a catalyst for meeting the requirements of a real-time digital enterprise – from underwriting, account management, training, and billing, to marketing, sales, and customer self-service.
Optimizing the Internet of Things: Key Strategies for Commercial InsurersCognizant
The Internet of Things (IoT) is having a significant effect on both consumer-facing and commercial enterprises. At the consumer level, this can be seen in the increasing number of sensor-based smart devices flooding the marketplace. Yet the biggest economic impact is in the industrial and service-based segments, including commercial insurance. By aligning their business requirements with the capabilities of the Internet of Things, insurers can sharpen operational efficiencies, open new revenue streams, drive profitable growth and keep customers close.
Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating P...Cognizant
Manufacturers recognize the disruptive potential of blockchain to streamline complex supply chain operations, simplify trade finance and spur the transition to customized manufacturing. Yet, most are not moving aggressively to prepare for the changes that blockchain will bring.
Back to Basics for Communications Service ProvidersCognizant
Our latest primary research reveals how CPSs can distill meaning from consumers' digital trails to better understand which product and service innovations will resonate and drive growth.
Orchestrating a Supply Chain Competitive EdgeCognizant
An effective supply chain is the key to creating business value. This paper will help you benchmark your performance today and take a methodical organizational approach to improving your supply chain effectiveness.
People — Not Just Machines — Will Power Digital InnovationCognizant
As new technologies cause value chains to rapidly evolve and organizational boundaries to blur, human roles and tasks are also digitizing, as machines alter how knowledge work is performed.
Financial Services: Building Blockchain One Block at a TimeCognizant
Financial services firms need to move aggressively in developing a blockchain strategy. Our primary research shows that companies lingering in the experimentation phase will be left behind by the rapid pace of innovation.
How will Blockchain Transform Banking, Financial Services, and FinTech in the...Richestsoft
Blockchain technology is set to revolutionize the banking, financial services, and FinTech sectors in the near future. Its decentralized nature ensures security and transparency, reducing fraud and enhancing trust. Banks are exploring blockchain app development company to create innovative solutions for cross-border payments and smart contracts, streamlining operations and reducing costs. Financial institutions can use blockchain for efficient record-keeping, and FinTech companies can leverage its capabilities to create innovative products. This technology is poised to disrupt traditional financial systems, making them more efficient and secure.
Blockchain in Banking: A Measured ApproachCognizant
Here's our foundational view on what the financial services industry needs to consider as organizations move from ideation to experimentation to pilot deployments of blockchain.
The Blockchain: Capital Markets Use Cases. @GreySparkUK
GreySpark Partners presenta un informe, el Blockchain: Capital Markets casos de uso, examinando cómo los bancos de inversión y otras empresas de los mercados financieros potencialmente podrían utilizar la tecnología distribuida libro mayor (DLT) en el futuro. El informe caracteriza a una amplia variedad de diferentes formas de aplicaciones blockchain siendo desarrollado por Fintech empresas de nueva creación a nivel mundial, y se analiza cómo estas aplicaciones podrían eventualmente ser utilizadas por los participantes en los mercados de capital como medio de sustitución de los sistemas de front y back-office existentes y procesos dentro de la buyside y la sellside.
How blockchain is solving regulatory compliance pain pointsGroup50 Consulting
Blockchain tracks all verified transactions, so there is no need for regulators to question the authenticity of the record as the distributed ledger technology (DLT) provides original document, not its copies. Blockchain technology has the potential to take away several pain points for regulators and compliance authorities.
The article explores possibilities of using the blockchain as a replacement for a KYC Registry , as a Digital Signature / Digital Identity solution and for UBO (ultimate beneficial owner ) tracking.
Using blockchain to get ahead of the game: Creating trust and driving operati...Accenture Insurance
The rise of blockchain promises to bring disruption to commercial insurance by fundamentally reshaping principles and processes that have governed the industry since the 17th century. Blockchain offers a more efficient alternative to the processes the insurance industry developed as an answer to the absence of mutual trust between affected parties and a lack of end-to-end transaction transparency.
In this report we address how blockchain can create trust and drive operational excellence, and we assess its wider implications for commercial insurance brokers.
Blockchain Technology in Banking Services - A ReviewGokul Alex
My session for IIM Bengaluru for the Executive Leaders of Public Sector Banks in India about the principles, paradigms, platforms, protocols and potentials of Blockchain Technology in 2020.
Emerging Technologies : The Jeeranont thejeeranont
The digital economy presents opportunities for growth that are simple to employ with an agile, open source platform. Discover the prospects that The Jeeranont includes among our strategic initiatives.
Website : https://www.thejeeranont.com
Desktop : https://www.aurapedia.org/the-jeeranont-wikipedia-aurapedia
Mobile : https://www.aurapedia.org/the-jeeranont-wikipedia-mobileview
Facebook : https://www.facebook.com/thejeeranont/
Twitter : https://twitter.com/thejeeranont
Instagram : https://www.instagram.com/thejeeranontofficial/
Blockchain: A Potential Game-Changer for Life InsuranceCognizant
As a shared, secure, distributed ledger that works in a peer-to-peer environment, blockchain technology can benefit the insurance industry in numerous ways throughout the value chain. We explore several use cases, including death claims processing, to illustrate blockchain's ability to streamline cumbersome workflows, reduce errors and fraud, increase auditability and confer competitive advantage.
Investigating Blockchain Development Services For The FinTech Sector Flexsin
Do you know all the prospects and uses that blockchain has for the fintech industry? This explainer will be your go-to resource if you don't know.
https://www.flexsin.com/blockchain-development.php
Global trade of goods has been growing at double-digit rates since the early 2000s. Digitzation had its time; but still we have manual paper based work exsisitng in most of the Trade finance activities. Now is the time to see value addition from Blockchain based platforms and how they can make this process faster, reliable and paperless.
Tapping Blockchain to Slash Costs, Enhance Trust and Speed B2B TransactionsCognizant
Nacha and Discover Financial Services are exploring how distributed ledger technology and smart contracts can make online purchasing safer, faster and less costly for business partners.
Blockchain Use Cases and Applications by Industry.pdfJamieDornan2
Blockchain use cases encompass many scenarios where blockchain technology can be applied to solve specific problems or enhance existing processes. This includes not being controlled by one entity, being able to see what's going on, not being changeable easily, and its cryptographic security.
The impact of blockchain technology on the finance industry.pdfAiblogtech
Blockchain technology, which is often referred to as the foundation of cryptocurrencies such as Bitcoin, has received a lot of attention in recent years. While blockchain's original goal was to enable secure and transparent digital transactions, it has since evolved to disrupt and transform a variety of industries, including finance. In this article, we will look at the significant impact that blockchain technology has had on the finance industry. We will go over the fundamentals of blockchain, its applications in finance, and the potential benefits and challenges of its adoption.
Understanding Blockchain Technology
Blockchain technology is a distributed ledger that is decentralized and records transactions across a network of computers. Each transaction is organized into a "block," which is then linked to the one before it, forming a chain of blocks, hence the name "blockchain." This technology ensures data transparency, security, and immutability by verifying and storing transactions in a tamper-resistant manner. Let's look at how blockchain technology has influenced the finance industry.
1. Enhanced Security and Transparency
One of the most significant benefits of blockchain technology in finance is its ability to improve security and transparency. Traditional financial systems rely on centralized authorities to validate and record transactions, such as banks. These systems, however, are vulnerable to fraud and hacking.
Blockchain, on the other hand, secures transactions using cryptographic techniques, making it extremely difficult for malicious actors to alter the data. Every network participant has access to the same information, ensuring transparency. This reduces the risk of fraud while also reducing errors and discrepancies in financial records.
2. Faster and Cheaper Cross-Border Transactions
The finance industry is heavily reliant on cross-border transactions, which frequently involve multiple intermediaries and can be time-consuming and costly. Blockchain technology simplifies the process by allowing peer-to-peer transactions without the use of intermediaries. As a result, cross-border transfers are faster and less expensive.
Smart contracts, which are self-executing agreements with the terms directly written into code, speed up the process even more by automatically executing transactions when predefined conditions are met. These contracts eliminate the need for third-party intermediaries and lower transaction costs, resulting in more efficient cross-border transactions.
3. Financial Inclusion and Accessibility
Blockchain technology has the potential to increase financial inclusion by allowing individuals who are currently underserved or excluded from traditional banking systems to gain access to financial services. Cryptocurrencies and blockchain-based platforms provide an alternative to traditional banking by allowing individuals to participate in the global economy without requiring a physical bank account.
The financing of the international trade of goods — and the underwriting thereof — implicate a many-staged process of manufacture, storage, movement, delivery, inspection, and vending. The parties involved are many. The documentation of rights and responsibilities used to fill a small library of paper, and now involves paper, electronic communication, and some digital information transfer. Many points of delay and potential contention persist. Can blockchain clean this up? What other technological developments are reshaping trade finance?
Part of the webinar series: Blockchain Basics 2022
See more at https://www.financialpoise.com/webinars/
THE GROWTH OF CRYPTO LENDING AND BORROWING PLATFORMS.pdfLiveplex
The rise of cryptocurrency has brought with it a host of innovations in the world of finance, with crypto lending and borrowing platforms being among the most transformative. These platforms have not only democratized access to financial services but also presented a formidable challenge to the traditional banking system. By leveraging blockchain technology, they offer a more accessible, efficient, and often more lucrative alternative to conventional financial services.
Similar to How Blockchain Can Revitalize Trade Finance (Part 1) (20)
Using Adaptive Scrum to Tame Process Reverse Engineering in Data Analytics Pr...Cognizant
Organizations rely on analytics to make intelligent decisions and improve business performance, which sometimes requires reproducing business processes from a legacy application to a digital-native state to reduce the functional, technical and operational debts. Adaptive Scrum can reduce the complexity of the reproduction process iteratively as well as provide transparency in data analytics porojects.
It Takes an Ecosystem: How Technology Companies Deliver Exceptional ExperiencesCognizant
Experience is evolving into a strategy that reaches across technology companies. We offer guidance on the rise of experience and its role in business modernization, with details on how orgnizations can build the ecosystem to support it.
The Work Ahead: Transportation and Logistics Delivering on the Digital-Physic...Cognizant
The T&L industry appears poised to accelerate its long-overdue modernization drive, as the pandemic spurs an increased need for agility and resilience, according to our study.
Enhancing Desirability: Five Considerations for Winning Digital InitiativesCognizant
To be a modern digital business in the post-COVID era, organizations must be fanatical about the experiences they deliver to an increasingly savvy and expectant user community. Getting there requires a mastery of human-design thinking, compelling user interface and interaction design, and a focus on functional and nonfunctional capabilities that drive business differentiation and results.
The Work Ahead in Manufacturing: Fulfilling the Agility MandateCognizant
According to our research, manufacturers are well ahead of other industries in their IoT deployments but need to marshal the investment required to meet today’s intensified demands for business resilience.
The Work Ahead in Higher Education: Repaving the Road for the Employees of To...Cognizant
Higher-ed institutions expect pandemic-driven disruption to continue, especially as hyperconnectivity, analytics and AI drive personalized education models over the lifetime of the learner, according to our recent research.
Engineering the Next-Gen Digital Claims Organisation for Australian General I...Cognizant
In recent years, insurers have invested in technology platforms and process improvements to improve
claims outcomes. Leaders will build on this foundation across the claims landscape, spanning experience,
operations, customer service and the overall supply chain with market-differentiating capabilities to
achieve sustainable results.
Profitability in the Direct-to-Consumer Marketplace: A Playbook for Media and...Cognizant
Amid constant change, industry leaders need an upgraded IT infrastructure capable of adapting to audience expectations while proactively anticipating ever-evolving business requirements.
Green Rush: The Economic Imperative for SustainabilityCognizant
Green business is good business, according to our recent research, whether for companies monetizing tech tools used for sustainability or for those that see the impact of these initiatives on business goals.
Policy Administration Modernization: Four Paths for InsurersCognizant
The pivot to digital is fraught with numerous obstacles but with proper planning and execution, legacy carriers can update their core systems and keep pace with the competition, while proactively addressing customer needs.
The Work Ahead in Utilities: Powering a Sustainable Future with DigitalCognizant
Utilities are starting to adopt digital technologies to eliminate slow processes, elevate customer experience and boost sustainability, according to our recent study.
AI in Media & Entertainment: Starting the Journey to ValueCognizant
Up to now, the global media & entertainment industry (M&E) has been lagging most other sectors in its adoption of artificial intelligence (AI). But our research shows that M&E companies are set to close the gap over the coming three years, as they ramp up their investments in AI and reap rising returns. The first steps? Getting a firm grip on data – the foundation of any successful AI strategy – and balancing technology spend with investments in AI skills.
Operations Workforce Management: A Data-Informed, Digital-First ApproachCognizant
As #WorkFromAnywhere becomes the rule rather than the exception, organizations face an important question: How can they increase their digital quotient to engage and enable a remote operations workforce to work collaboratively to deliver onclient requirements and contractual commitments?
Five Priorities for Quality Engineering When Taking Banking to the CloudCognizant
As banks move to cloud-based banking platforms for lower costs and greater agility, they must seamlessly integrate technologies and workflows while ensuring security, performance and an enhanced user experience. Here are five ways cloud-focused quality assurance helps banks maximize the benefits.
Getting Ahead With AI: How APAC Companies Replicate Success by Remaining FocusedCognizant
Changing market dynamics are propelling Asia-Pacific businesses to take a highly disciplined and focused approach to ensuring that their AI initiatives rapidly scale and quickly generate heightened business impact.
The Work Ahead in Intelligent Automation: Coping with Complexity in a Post-Pa...Cognizant
Intelligent automation continues to be a top driver of the future of work, according to our recent study. To reap the full advantages, businesses need to move from isolated to widespread deployment.
The Work Ahead in Intelligent Automation: Coping with Complexity in a Post-Pa...
How Blockchain Can Revitalize Trade Finance (Part 1)
1. How Blockchain Can
Revitalize Trade Finance
(Part 1)
As a new way to secure the transfer of value, blockchain
technology promises to increase collaboration, automation and
oversight in trade finance transactions.
August 2017
DIGITAL BUSINESS
2. 22
Digital Business
| How Blockchain Can Revitalize Trade Finance
EXECUTIVE SUMMARY
The trade finance industry has emerged as a key focus area for realizing the efficiencies
of blockchain technology. Blockchain has the potential to disrupt the trade landscape by
making it easier to reduce disputes and fraud to provide delivery and payment certainty,
enable transparency of trade asset movement, and facilitate the flow of trade receivables.
The result: increased collaboration, automation and oversight in trade transactions.
This white paper (the first of a five-part series) examines blockchain’s benefits across three
areas of trade finance: payment method automation, trade asset tokenization and payment
instrument digitization.
3. 3How Blockchain Can Revitalize Trade Finance |
Digital Business
33
THE TRADE FINANCE LANDSCAPE
Trade finance by banks and other financial institutions is a vital function in international
commerce, as it provides delivery and payment assurance to buyers and sellers, and it
helps close the trade cycle funding gap for these parties. The growth and sustenance of
the $16 trillion international trade market depends on the easy availability and robustness
of financing mechanisms.1
For this reason, trade finance is often described as the fuel for
global commerce.
However, trade participants can be vulnerable to business risks and uncertainties stemming
from several factors, including process inefficiencies, variance and fluidity in trade regulations
and requirements across geographies, and the operational and logistical complexities that
arise when a large number of entities interact. A recent survey by the International Chamber
of Commerce reports an increasing trend in litigation and fraud related to trade financing
over the last few years.2
Recent examples of trade and receivable financing fraud include the
$1.1 billion3
lawsuit against Citigroup resulting from financing falsified receivables, and the
loss of hundreds of millions of dollars to various banks in the Qingdao port metal financing
fraud involving multiple invoices secured against the same collateral.
Other pain points include:
• Payment and delivery delays due to process overheads.
• A lack of insight into the movement of goods.
• The effort required for counterparty due diligence and contractual compliance processes.
For banks, these obstacles can increase both risk and costs, leading to unfavorable
financing terms, especially for small businesses. It is estimated that almost 60% of trade
finance applications globally from small and medium-size enterprises (SMEs) are rejected
by banks. A recent survey by Asian Development Bank puts the total value of unmet trade
financing demand at a whopping USD$1.6 trillion.4
Another study of informal enterprises
by International Finance Corp. estimates the financing gap for global micro, small and
medium-size enterprises at USD$2.6 trillion.5
These risks and inefficiencies have limited
the size of the trade finance market, which currently stands at $4 trillion to $5 trillion,6
adversely affecting growth in global commerce.
4. 4
Digital Business
| How Blockchain Can Revitalize Trade Finance4 | How Blockchain Can Revitalize Trade Finance
BLOCKCHAIN’S POTENTIAL ROLE
As a new digital paradigm for securing transfer of value, blockchain technology7
holds the potential
to forever change business processes by redefining value chain interactions, reducing operational
complexity and reducing transaction costs. (For more on blockchain, view our video or read our white
paper “Demystifying Blockchain.” For our primary research on blockchain adoption in financial ser-
vices, see our report “Financial Services: Building Blockchain One Block at a Time.”)
Three key features of blockchain — cryptographic security, distributed ledger architecture and a net-
work consensus mechanism — are instrumental in treating the major pain points of trade finance:
• The cryptographic security underlying blockchain technology enables information
immutability and credibility. This capability renders trade transaction records stored on block-
chain tamper-proof, reliable and verifiable by all parties at any time. Data confidentiality and
privacy are ensured through permissioned access rights for trade participants.
• The distributed ledger architecture provides transaction transparency and trace-
ability. This increases visibility into asset status for merchandise tracking, enables automated
execution of contractual obligations through smart contracts, and ensures networks are resilient
to downtime and manipulation risks.
• The network consensus mechanism provides a single source of truth for enabling
native issuance of financial assets (trade receivables and other payment obligations). It also
eliminates the associated problems of double spend, fraud and the need for continuous reconcilia-
tion between trading and financing parties in the transfer of these digital assets.
Together, these features provide the foundation for building robust and synergistic trade finance eco-
systems and platforms that substantially increase the efficiency of trade processes, eliminate fraud,
improve asset liquidity and provide better visibility into the trade supply chain.
Digital Business
5. 5How Blockchain Can Revitalize Trade Finance |
Digital Business
5How Blockchain Can Revitalize Trade Finance |
BLOCKCHAIN’S IMPACT ON TRADE FINANCE
Blockchain’s benefits can be looked at across three key areas in trade finance.
1. Providing payment certainty to sellers by automating payment methods.
While payment methods like letters of credit (LC) provide an effective way to mitigate business risks
through bank facilitation of the trade flow and settlement process, their value can be seriously limited
by high costs, contractual delays and process complexities. Because LC compliance is evaluated based
on trade documents and not the actual delivery or quality of goods, ambiguities in the semantics of
the legal clauses in the LC contract necessitate the bank to apply discretionary determination when
interpreting them. As a result, errors in terminology and interpretation of requirements commonly
lead to disputes between parties, with goods sitting unclaimed at the delivery location.
Letter of Credit Process Flow
Payment methods and the underlying trade contracts can be modeled as smart contracts on
blockchain to provide payment certainty to the seller.
3. LC terms drafted and forwarded
1. Sales contract with the terms of trade
Smart Contract
2.
Request
for LC
issuance
4.
LC
advise
6b. Payment
6a.
Documents
release
BUYER
ISSUING BANK ADVISING BANK
SELLER
Nominated
Bank
Reimbursing
Bank
Confirming
Bank
Smart Contract
5. LC contract between
seller and issuing bank
Figure 1
Digital Business
6. 6
Digital Business
| How Blockchain Can Revitalize Trade Finance
Payments can also be delayed by data mismatches between the LC contract and the underlying
trade documents, which either require a waiver or acceptance from the buyer. Other delays can stem
from corrections in the trade documents or amendments in the LC contract itself within a short time
window before the LC expiration date.
To mitigate the risk of delayed or denied payments, the LC can be modeled as self-executing contracts
on blockchain (see Figure 1, previous page). This would automate compliance verification with contract
terms and ensure faster payment to sellers by preventing disputes from arising due to ambiguities
in the payment contracts. Automating the payment method on blockchain also expedites payments
through early discovery of discrepancies and increases the efficiency of the amendment process.
2. Providing delivery assurance to buyers through trade asset tokenization.
Visibility into the status of in-transit shipment is essential for buyers to obtain timely indications of
potential delays and damages that can impact fulfillment of downstream obligations. However, buyers
often lack this insight into en-route delays or shipment damage due to bad weather, port congestion,
customs hold-ups and other reasons until the actual delivery of the shipment. This limits the ability to
foresee and mitigate business risk.
Trade documents also move separately from the flow of goods, leading to situations when goods
cannot be claimed by buyers until the title or other physical documents have been received. Docu-
ments can also be easily forged or manipulated due to vulnerabilities in the transport chain resulting
from fragmented interactions between stakeholders, variations in country-specific regulations and
trade procedures, and an overall lack of security and common standards. This increases the risk of
document fraud for trading parties.
Parties in the Trade Transport Chain
Trade shipment and trade documents (such as bill of lading) can be tokenized on blockchain to
provide delivery assurance to the buyer.
Freight
Forwarder
Regulator
Insurer
Bank
Carrier
Exporter
Importer
Figure 2
7. 7How Blockchain Can Revitalize Trade Finance |
Digital Business
On blockchain, the trade asset can be digitized through crypto-tokens to denote custody or owner-
ship of the bearer and link its transfer between trade transaction participants on blockchain with the
movement of the physical asset, establishing a clear chain of provenance. The trade-related docu-
ments can also be directly issued and verified on the blockchain by relevant parties.
Asset tokenization on blockchain provides delivery assurance and better risk management for buyers
by enabling real-time shipment status tracking and visibility into transport conditions. Managing the
flow and transfer of trade documents, such as bill of lading, on blockchain reduces hold-ups in the
release of cargo to the buyer due to delayed receipt of trade documents, and it also prevents losses
from document manipulation and errors.
3. Mitigating risks and increasing financing revenues for banks through payment instrument
digitization.
Trade receivables and other payment instruments such as promissory notes, checks, drafts or bills of
exchange act as negotiable instruments that can be transferred to third parties like banks and other
financial institutions. This makes it possible for suppliers to get funding to meet their working capital
needs by sale or transfer of these payment instruments through discounting, factoring or forfeiting.
However, banks face challenges in detecting deviations and ensuring compliance because of process
inefficiencies, such as limited availability of trade information, reliance on documentary proofs of
trade, and the high cost of manual screening required, making them vulnerable to business risk. The
Post-Shipment Financing Process Flow
Trade receivables like bills of exchange and approved invoices can be natively issued on blockchain
to reduce fraud and enable banks to offer more attractive financing.
7. Credit
repayment
Bank
3. Issue trade
receivable
Supplier Buyer
4. Verify receivable
ownership
2. Issue
invoice
6. Invoice payment after credit period
1. Delivery
5. Invoice financing
Figure 3
8. 8
Digital Business
| How Blockchain Can Revitalize Trade Finance
resulting risks include substantial loss from financing fraud, such as duplicate financing and submis-
sion of fake receivables, reputational damage, costly lawsuits and ever-increasing penalties in the
form of multi-million-dollar fines.
Another key pain point in financing is the unavailability of sufficient and timely trade credit for
SMEs, which generally receive deferred payment terms from corporate buyers but need liquidity in
the interim to meet their working capital needs. The overhead involved in issuing, storing, transfer-
ring and redeeming receivable instruments in paper form also makes for an operationally inefficient,
costly and time-consuming process.
Since payment instruments are essentially credit instruments created by the trade transaction, they
can be directly issued on a blockchain network as native assets. Payment instruments such as bills of
exchange or promissory notes can be digitally created as financial contracts between the issuing and
redeeming parties. Direct issuance of payment instruments on blockchain prevents fraudulent invoic-
ing practices, improves SME financing options through increased liquidity of receivables, and enables
process efficiencies in managing receivables.
OTHER PROCESS CONSIDERATIONS
In the coming years, we expect blockchain to also play a pivotal role in improving the peripheral busi-
ness processes that impact trade finance. These include, among others, identity management and
document and contract management processes.
• Identity management: Identity and reputation management is the cornerstone of any trade
interaction. Banks need to facilitate trade transactions to cover the risk of payment or delivery
default by the trade counterparty. Blockchain ecosystems can facilitate credible and effective
trade party credentialing based on immutable and comprehensive payment and trade transaction
history records that can be effectively deployed for assessing the creditworthiness and financial
health of the corporate and initiating financing, as well as for ongoing monitoring for funds release
and disbursement.
• Document and contract management: Trade documents related to financial, regulatory, com-
mercial and insurance can be effectively managed on blockchain by hashing these to ensure that
all parties are accessing and making changes to the most recent version of the document. Sim-
ilarly, trade-related contracts can also be created, updated and amended directly on blockchain
9. 9How Blockchain Can Revitalize Trade Finance |
Digital Business
through a multi-signatory mechanism and carried forward and easily referenced with the rest of
the transaction activities. These actions increase the auditability of the trade process and ensure
that documents or contract information cannot be tampered with by any single party. Blockchain
technology also lends itself to easier dispute resolution as immutable contract information is pre-
served and made accessible to all parties on the blockchain.
LOOKING FORWARD
Blockchain-enabled trade networks can benefit all stakeholders by reducing friction from the logisti-
cal and operational inefficiencies across the trade finance value chain. In the short term, blockchain
would be instrumental in optimizing business processes by reducing redundancies and implementa-
tion inefficiencies. The longer-term implications of blockchain technology in trade finance would be
more profound and could lead to changes in or complete re-design of existing processes.
Though the potential for disruption is immense, multiple hurdles need to be overcome before the
promise of blockchain for trade finance can be realized. Some of the critical challenges are related
to ensuring adoption and collaboration to reach critical mass to drive network efficiencies, and in
managing the operational complexity and associated change management processes in setting up
industry-wide blockchain networks.
Blockchain is only one part of the overall solution, and distributed ledger applications require care-
ful strategic considerations and design decisions for production deployment. Additional complexities
would arise regarding the legal acceptance and regulatory applicability of such networks and the
challenges of platform applicability, scalability and interoperability. As a result, blockchain adoption
will need more concerted evangelization efforts to build industry momentum and accelerate imple-
mentation.
In upcoming papers, we will provide a deeper look at specific areas and use cases to make blockchain
a reality in trade finance, as well as examine in more detail the challenges and process complexities in
this field.
Blockchain technology also lends itself to
easier dispute resolution as immutable
contract information is preserved and made
accessible to all parties on the blockchain.
10. 10
Digital Business
| How Blockchain Can Revitalize Trade Finance
FOOTNOTES
1 “2016: Rethinking Trade and Finance,” International Chamber of Commerce, 2016, http://store.iccwbo.org/content/uploaded/
pdf/ICC_Global_Trade_and_Finance_Survey_2016.pdf.
2 Ibid.
3 “Citigroup Faces Fraud Suit Claiming US$1.1b in Losses,” The Business Times, Feb. 27, 2016, http://www.businesstimes.com.sg/
banking-finance/citigroup-faces-fraud-suit-claiming-us11b-in-losses.
4 “2016 Trade Finance Gaps, Growth, and Jobs Survey,” Asian Development Bank, August 2016, https://www.adb.org/publica-
tions/2016-trade-finance-gaps-growth-and-jobs-survey.
5 “Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises,” IFC Advisory Services, 2013, https://
www.ifc.org/wps/wcm/connect/4d6e6400416896c09494b79e78015671/Closing+the+Credit+Gap+Report-FinalLatest.pdf?-
MOD=AJPERES.
6 “Fraud in $4 Trillion Trade Finance Turns Banks to Digital Ledger,” LiveMint, May 23, 2016, http://www.livemint.com/Industry/
CXfxl1yePlwTDuokXU3c2K/Fraud-in-4-trillion-trade-finance-turns-banks-to-digital-le.html.
7 At its core, blockchain is a decentralized software mechanism that enables a distributed ledger system. The technology
allows the tracking and recording of assets and transactions without the presence of a central trust authority such as a bank.
11. 11How Blockchain Can Revitalize Trade Finance |
Digital Business
Rashi Goyal
Senior Manager, Cognizant’s
Blockchain and Distributed
Ledger Consulting Practice
Rashi.Kamma@cognizant.com
Rashi Goyal is a Senior Manager with Cognizant’s Blockchain and
Distributed Ledger Consulting Practice. She currently leads Cogni-
zant’s wholesale banking (trade finance) blockchain initiatives and
is the venture lead for a blockchain/DLT start-up within Cognizant
aroundTradeandSMEfinancing.Shehasastrongconceptualunder-
standing of blockchain design frameworks, consensus mechanisms
and smart contracts and hands-on experience with platforms such
as R3 Corda, Ethereum and Hyperledger Fabric. Rashi has 11-plus
years of domain experience in banking and financial services indus-
try and has worked as business consultant in payments, commercial
lending and trade finance for leading banks in North America, Asia
Pacific and continental Europe. She holds an MBA from Indian Insti-
tute of Management, Ahmedabad (IIM-A) and bachelor’s degree in
electronics engineering from Institute of Engineering Technology
Lucknow. Rashi can be reached at Rashi.Kamma@cognizant.com |
https://www.linkedin.com/in/rashi-goyal-48b44422/
Lata Varghese
Assistant Vice-President,
Cognizant’s Blockchain and
Distributed Ledger Practice
Lata.Varghese@cognizant.com
Lata Varghese is a Cognizant Assistant Vice-President who leads
the company’s cross-industry Blockchain and Distributed Ledger
Practice. In this role, she oversees the practice’s efforts in pro-
viding business and technology consulting and implementation
services related to the blockchain and distributed ledger suite
of transformative technologies. Lata’s expertise resides in busi-
ness consulting, go-to-market, alliances and partnerships, as well
as thought leadership creation. Her focus is on helping clients
explore innovative shared infrastructure platforms and solutions
that can be enabled by blockchain. Lata has over 20 years of
consulting and technology service expertise in the banking and
financial services industry and brings wide and varied experience
across multiple geographies and services. She obtained her bach-
elor’s degree in electrical engineering from the National Institute
of Technology Calicut and an MBA from Xavier Institute of Man-
agement. Lata can be reached at Lata.Varghese@cognizant.com |
https://www.linkedin.com/in/lata-varghese-06821a1/.
ABOUT THE AUTHORS