The global banking and financial service provider, Commerzbank, is looking to adopt the technological advancement trend upon bigger banks and financial service. The blockchain technology has been dominantly known for being featured and being integrated into major cryptocurrencies such as Bitcoin and is now paving its way through the financial institutions.
Commerzbank is reported to be working hand-in-hand with notable banks which are; Bank of Montreal, Erste Group Bank AG, and the CaixaBank SA. The financial institutions are reported to cooperate on the initiative that the UBS Group AG has spearheaded. The banks will also be boarding IBM in their quest to create a blockchain technology.
The platform will be dubbed as the Batavia; geographically speaking, Batavia is the capital city of the Dutch East Indies or the old name of Jakarta, Indonesia’s capital. Batavia will greatly elevate the financial institutions’ capability to help their clients with the automation of the trade finance process. The blockchain is expected to replace the manual and paper-based process that is currently prevalent with the banks.
Trade Finance and Blockchain Tech
Trade Finance for most financial institution and banks is the financing of major trades that are conducted both locally and internationally. The new blockchain will massively increase the efficiency and speed of the whole process; this can also open a wide array of services to importers and exporters to increase the commerce.
On a technical look, the blockchain will be providing a single ledger that will eliminate the need for the bank of needing multiple parties to keep individual records of transactions.
According to UBS; head of strategic innovation for corporates, Beat Bannwart, the innovation of the blockchain is here to help the “highly cumbersome” trade financing process. He also noted that they aim to make “a simple, digital and automated way of arranging, securing and financing [companies’] international trade transactions by leveraging new technology and creating an open ecosystem.”
What to Expect in the Future?
IBM's project lead Fabio Keller said, “In working with hundreds of clients to implement blockchain solutions, financing global trade has emerged as one of the use cases most in need of innovating,” and “Targeting the creation of large, global, multi-modal networks that bring transparency and trust to each step of the trade process is what makes Batavia a platform with so much potential to transform the way companies around the world do business with one another.”
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