Link copied Standard Chartered, in collaboration with Siemens Financial Services and blockchain trade finance platform TradeIX, will create an end-to-end smart guarantees proposition in trade finance based on blockchain technology.
A bank guarantee is a bank’s promise to assume the liability for a debtor if its contractual obligations are not met. Under the existing system, the process is largely paper-based.
According to a press release on Zawya, the industry-first client pilot aims to fully digitize the processes involved in Bank Guarantees business – from initiation of the bank guarantee to the claim handling.
The proposition is based on auto-executing smart contracts, leveraging the R3’ Corda distributed ledger platform. TradeIX will provide the application layer.
Using the blockchain-based solution, Siemens will be able to digitise its guarantee process for customers with large transaction volumes spanning issuance, amendments and claims. It will help eliminate the multiple touch-points and inefficiencies which plague the existing paper-intensive process.
“This will streamline our processes and make our trade finance operations smoother, faster and more efficient. We are delighted to partner with Standard Chartered in leading such game-changing transformation which will help our customers go digital in their guarantee and claim processes and achieve higher efficiency,” Michael Bueker, Chief Financial Officer, Siemens LLC said.
The pilot began in March 2018 and will be fully completed later this year.
