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Blockchain has disrupted various businesses including trade finance by adding value to its operational competence. The blockchain technology holds huge potential to redefine the business processes involved in the trade financing ecosystem. With features such as network consensus mechanism, cryptographic security and distributed ledger infrastructure, it enables operational efficiency, fraud elimination and transparency in the supply chain.
Marco Polo, the post-shipment trade financing solution, has entered the piloting stage. The world’s leading banks in collaboration with enterprise software firm R3 and technology specialist for trade financing, TradeIX have developed the Marco Polo solution. The initiative uses the distributed ledger technology powered by R3 Corda blockchain technology and TradeIX’s TiX, which will be the delivery platform for Marco Polo. TiX is an open platform that would provide the required technology tools, core infrastructure and applications for the trade finance ecosystem. The initiative would seamlessly facilitate end to end and real time connectivity participants in trade and also allow free flow of data by elimination of data silos that affect the data consistency and effectiveness.
The solution was initially launched by ING, BNP and Commerzbank in September 2017, and was directed towards mitigating risk by providing payment commitments based on matching of three different areas of receivables finance, trade data and payable finance. However, the initiative was well-received in the global banking market and gradually more banks including OP Financial Group, Standard Chartered and DNB joined the initiative. Efforts in the year 2018 are driven towards including more banks and third-party service providers such as logistics providers, credit insurers, and ERP providers to develop an open-sourced network for trade finance that is completely interoperable through the shared platform.
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