European Banks Select IBM Blockchain for Small Business Trade Finance

A group of seven major European banks is working with IBM to build a new blockchain-based trade finance platform for small- and medium-sized enterprises.

IBM will build and host the platform for the Digital Trade Chain Consortium (made up of seven banks including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe General and Unicredit), with the goal of facilitating easier and more transparent domestic and cross-border trade for smaller businesses.

The platform will be built on the Linux Foundation's Hyperledger Fabric blockchain and will run on the IBM Cloud.

"What we'll be building is a user interface that the banks will make available through their environment to the end SME clients, for the buying SME and the selling SME. The bank will be responsible for onboarding, KYC, all those aspects associated with the client relationship," Keith Bear, VP of global financial services at IBM, told CoinDesk.

He added:

"The bank will then be running nodes within the business network, which for most of them will be facilitated by our cloud environment."

The forthcoming blockchain solution is being designed to reduce transaction costs and increase transparency for SMEs. Citing figures from the World Bank, Bear said that up to 50% of SMEs don’t have to access formal credit channels.

In this light, the blockchain solution will be the first step in addressing this financing gap for small businesses.

"It's a large and important marketplace, but it's not really well served by trade finance capabilities," said Bear. "That could clearly be an inhibitor to them being able to trade internationally and potentially domestically as well."

The solution is currently in development with a plan to go into implementation by the end of 2017.

European flags image via Shutterstock

Article Source: www.coindesk.com/european-banks-select-ibm-blockchain-small-business-platform/

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