Trade Finance

Trade Finance Proof of Concept to Assist Banks

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CGI, along with the Bank of Montreal (BMO), Royal Bank of Canada, and Mitsubishi UFJ Financial Group, Inc. (MUFG), have successfully completed a proof of concept that enables banks engaged in trade finance to integrate blockchain capabilities with existing trade finance platforms, potentially leading to added productivity, reduced costs and providing customers with a competitive advantage.

The POC established interoperability between CGI Trade360, which is a bank trade finance platform, and Skuchain Brackets, a distributed ledger B2B platform for smart contracts. The trade finance platform and the blockchain-based platform have been integrated to demonstrate how banks will be able to provide trade finance services digitally to their customers conducting business on blockchain B2B platforms.

This development addresses concerns that trade finance has been a complicated and paper-intensive line of business and a source of delay in buyer and seller transactions. This POC successfully demonstrated streamlined processes for digital trading, from sales agreement creation, letter of credit application and issuance/advisement to presentation of documents, bank examination and payment notification. Instantaneous delivery of electronic documents could reduce the in-transit time required for conducting this business from days to minutes.

The ultimate goal of the B2B platform is to achieve greater visibility for a customer into their supply chain and ensure accountability through complete and unalterable audit trails of end-to-end processes. Demonstrating interoperability between CGI Trade360 and Brackets prepares for further digital transformation of financial supply chains.

Jeff Shell, head of Global Trade and Banking with BMO Capital Markets, commented: “Blockchain and smart contracts have the potential to reinvent global trade — improving speed, reducing costs, enhancing productivity and taking the paper out of trade. CGI has been an important trade finance technology partner to BMO for many years, and this Skuchain Brackets proof of concept collaboration is another example of BMO’s commitment to stay at the forefront of the trade and supply chain finance industry.”

Vice President of Business Financial Services at RBC, Lisa Lansdowne-Higgins explained: “RBC is always looking for new and innovative ways to help clients manage and grow their business. Global trade is a high growth opportunity for Canadian businesses to expand their reach and achieve that growth. Blockchain technology is an emerging opportunity to drive supply chain efficiencies and this test is a foundational step forward for the business.”

Steven Lotito, Head of Trade Finance Transaction Banking at MUFG, stated: “MUFG is pleased to support CGI’s Blockchain initiatives. This trnew technology will contribute to transforming how Trade Finance supports our customers. We understand the important role that leading Trade Finance banks, like MUFG, can play in revolutionizing how technology drives our business,”

CEO of Skuchain, Srinivasan Sriram said: “Skuchain is proud to have executed, along with CGI and its bank partners, the first integration of two production-grade systems to provide a blockchain-based trade finance platform for commercial use in the near future. Our company was built on the premise that blockchain will bring enormous efficiencies to the supply chain, and supporting the adoption of blockchain for end-to-end trade finance transactions is an important part of that mission,”

Frank Tezzi, CGI Vice President of Trade and Supply Chain, noted: “Interoperability between CGI Trade360 and Brackets provides a fully digital workflow using existing transaction processing. Banks will not only support their supply chain customers with leading edge technology, but will leverage their existing investments in operating models and trained staff. CGI Trade360 and Skuchain’s Brackets form a holistic solution that we intend to evolve into a commercial offering,”

Hans Lombardo
Journalist, policy analyst, and evangelist of new, disruptive technologies including big data analytics, Internet of Things, and cryptocurrencies. Internet industry veteran with regional c-suite experience, and journalist credentials earned at internet.com, Internet World magazine, and Mecklermedia Corporation.