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Lloyds Bank, one of the "Big Four" clearing banks in the United Kingdom, has announced that it is joining blockchain-based commodity trade network komgo.
Last September, a number of banking giants, trading companies, inspection company, and an energy major teamed up for a new venture to digitize the trade and commodities finance sector through a blockchain-based open platform. Thus, komgo was established as an independent entity, incorporated in Geneva.
Founding members include ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS, and Societe Generale.
In a press release dated September 25, Lloyds said that it is the first UK bank to partner with komgo and make the platform’s benefits available to its clients. The objective is to utilize distributed ledger technology (DLT) for faster international commodity trade finance.
Gwynne Master, managing director and global head of trade for Lloyds Bank Commercial Banking, said that the existing process of international trade is ‘cumbersome’ and ‘time-consuming’ and involves many players, considerable paperwork, and risk. Master added that the process of trading a single commodity can take over 100 days.
By leveraging blockchain technology, komgo digitises and streamlines international trade and commodity finance, enabling businesses to quickly and automatically exchange data and associated documents in a digital, secure and decentralised way. It helps to shorten cashflow cycles, reduce the risk of fraud and allows all parties to monitor the progress of a transaction in real-time.
“We’re working together to shorten the time it takes our corporate clients to trade internationally by significantly streamlining and digitising the process. We like komgo’s client-centric approach – where the focus is on addressing top corporates’ pain points – this fits well with our way of working,” Master added.
Souleïma Baddi, CEO at komgo, said: “We are thrilled to welcome Lloyds Bank on komgo’s network, and very excited to support their clients to get the best out of it in the following months”
