B9lab presentation on trade finance and blockchain at the BNP Paribas biz hackathon in Paris in January 2016.

1. Copyright 2016 B9lab Ltd | All rights reserved
Trade finance and blockchain
BNP PARIBAS biz hackathon
Paris, 21 January 2016
Stephan Karpischek

2. Copyright 2016 B9lab Ltd | All rights reserved
Level of intermediation: Are you acting as a trusted third party or trusted authority?
Type of transactions: Does your business rely on transfer of value or assets ownership transfer?
Level of digitization: Are the assets you deal with available in digital form, or can they be
represented in digital form? Can you hash them?
Level of automation: Are the processes in your business highly automated? Can you use sensors to
determine the status or outcome of processes?
Information availability: Is the relevant information for your business widely available on the IInternet, in
a standardized format (e. g. weather information, exchange rates)?
Blockchain disruption indicators

3. Copyright 2016 B9lab Ltd | All rights reserved
Seller
Buyer's bank Seller's bank
Contract
Payment
Goods
Buyer
Documents
Documents
Documents
Icons made by Freepik from
flaticon.com
Trade finance cycle (L/C)

4. Copyright 2016 B9lab Ltd | All rights reserved
Seller
Buyer's bank Seller's bank
Contract
Payment
Goods
Buyer
Data
Data
Data
Trade finance cycle (BPO)
Icons made by Freepik from
flaticon.com

5. Copyright 2016 B9lab Ltd | All rights reserved
Seller
Goods
?
if (goods.shipped){
paySeller (payment.chunks[1]);
}
if (goods.arrived) {
paySeller(payment.rest)
;
}
Buyer
Smart Contract
Trade finance cycle (blockchain)
Icons made by Freepik from
flaticon.com

6. Copyright 2016 B9lab Ltd | All rights reserved
Seller
Goods
?
Buyer
Trade finance cycle (blockchain)
Smart Contract
if (Payment.confirmed) {
goods.unlock();
}
Icons made by Freepik from
flaticon.com

7. Copyright 2016 B9lab Ltd | All rights reserved
Consequences
Risks
What will be the role of the banks?
Who will be the new players?
Will financing, insurance, lawyers still be needed?
Opportunities
Increased transparency, real-time monitoring and availability of trades, easier collection of data.
Faster, automated, real-time decisions.
Cheaper, more efficient, higher rentability.
A possibly much larger market to address.

8. Copyright 2016 B9lab Ltd | All rights reserved
Source: S. Nakamoto “Bitcoin: A Peer-to-Peer Electronic
Cash System” https:/ bitcoin.org/bitcoin.pdf
Bitcoin privacy model
Two of the biggest issues with blockchains for financial players: Identity and confidentiality.

9. Copyright 2016 B9lab Ltd | All rights reserved
What to do?
Radically deconstruct your business.
What are the basic needs of your customers?
What is the simplest process, the smallest piece of information you can boil it down to?
Play around.
Get to know the technology, implement proofs of concept, prototypes, get customer feedback.
Ignore regulations.
For now.
Work with assumptions.
E. g. identity issues solved, confidentiality issues solved, all parties on the same blockchain.
Cooperate, team up.
No bank can win this alone.

10. Copyright 2016 B9lab Ltd | All rights reserved
Five hypotheses on blockchain innovation
H1: You need to understand the crypto basics.
H2: There are multiple levels of blockchain innovation. Only one is disruptive.
H3: In a decentralized system the money is at the edges.
H4: In large organizations internal innovation is an oxymoron.
H5: Success needs regulatory braveness and technology experience.

11. Copyright 2016 B9lab Ltd | All rights reserved
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