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Infosys Finacle, part of EdgeVerve Systems – a wholly-owned subsidiary of Infosys, announced that it has successfully completed its global blockchain trial in collaboration with blockchain software firm R3. Financial institutions across 19 countries have participated in the test network of Finacle Trade Connect, available on R3’s Corda.
Launched last May, the blockchain-based Finacle Trade Connect was developed to address and simplify the trade finance process requirements of banks. It is agnostic to underlying blockchain infrastructure including Hyperledger, Corda, Ethereum, and Bitcoin, securing banks from technology evolution risks.
As per an announcement, the trial simulated both domestic and international trade processes, in a bid to test the blockchain’s capability on the platform. Participating banks carried out trade finance transactions across products including open account, factoring, bank guarantees, invoice financing, and letters of credit.
After carrying out more than 400 transactions over the course of 5 weeks, participants found that processes were faster, more cost-efficient, and maintained trust and security.
“During the trial, processes which ordinarily would have taken days were concluded within hours by counterparties that are all connected in the ecosystem. The transparency, speed, trust and security offered by the platform makes the use case compelling for trade finance practitioners,” Stephen Obasi, Group Head, Head Office Operations, Fidelity Bank, said.
In a feedback survey conducted among participants, Infosys shared that 67% of the trial respondents believe blockchain could cut down processing time by 30%. Some 11% even think that the reduction rate can reach up to more than half. Most of the banks saw potential in cost efficiency, customer experience, and streamlining cross-border trade.
“With Finacle Trade Connect solution, our vision is to help banks dramatically reduce costs and improve customer experience by connecting banks, trade partners, and corporate on a unified distributed network,” Sanat Rao, Chief Business Officer of Infosys Finacle, said.
Notably, less than half (44%) thinks the trial demonstrated a significant impact on preventing fraud. But all of them agreed that they will recommend the pilot to their industry partners and peers.
“Infosys Finacle’s successful completion of this global blockchain trial is a clear demonstration of the efficiencies blockchain can bring to various financial markets, and trade finance is no exception to that,” David Rutter, R3 CEO, said.
On the other hand, R3 has also partnered with Dubai-based fintech startup Wethaq to develop the next-generation architecture for Islamic capital markets. The “platform-as-a-service” company will build on R3’s Corda blockchain to oversee the pre-sale issuance, management, and financialization of Sukuk securities, which are Islamic financial certificates that are similar to bonds.
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