Sibos 2018: How Japan's megabanks will digitalise trade finance processes using blockchain
They are part of a consortium of trade players working on a Trade Data Sharing Platform.
When NTT Data, a global consultancy and IT firm, confirmed the effectiveness of using blockchain technology in import and export trade operations, it invited Japan’s biggest companies from sectors across the field of trade and launched a consortium to implement its next proof of concept (PoC), amongst them the country’s three biggest banks: MUFG Bank, Sumitomo, and Mizuho.
With most documents in trade process still sent through paper form, faxes, emails, PDFs, or Excel files, and then people have to check them and manually enter data into the company’s system, banks and other trade players find the workload enormous and susceptible to human error.
Before the consortium was formed, the first PoC was able to drastically reduce operating procedure time for letter of credit transactions, accelerate other procedures including amendment of letters of credit, and confirm the high availability of blockchain technology. Meanwhile, the second PoC applied the technology to export marine cargo insurance policies, improving security performance and operational efficiency.
Now, the consortium of banks, insurance companies, cargo owners, maritime companies, logistics companies, customs, and import and export authorities in Japan is building a Trade Data Sharing Platform that connects trade stakeholders and digitalises trade documents to improve efficiency and convenience of trade procedures. Currently, the platform has 55 functions and 83 APIs for the prototype system that has been developed.
According to MUFG Bank’s head of eTrade product Daisuke Kamai, they could not achieve digitised trade by themselves, and thus they welcomed services from providers such as NTT Data.
He also shared that the consortium meets every month to discuss overall progress status, objectives, and opportunities in the trade process. “Preparation of documents and document checking will be automated through AI technology and the process will be shortened,” Kamai added.
Although there is a challenge in a limited network according to Kamai, NTT Data has been conducting PoCs that connect the Trade Data Sharing Platform to Singapore’s National Trade Platform (NTP) and Thailand’s customs system.
“The technology will be improved day by day. As a bank, we should create a global ecosystem that will bring us a bright future of the trade,” Kamai concluded.
Sibos is an annual banking and finance conference organised by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Elisha Yamzon of Asian Banking & Finance will be present at the four-day event from October 22-25. For editorial opportunities, kindly send an email to email@example.com. For advertising opportunities, kindly send an email to firstname.lastname@example.org.