ING and Societe Generale Corporate & Investment Banking have presented the results of the "Easy Trading Connect" blockchain prototype, coinciding with IP Week in London. They carried out a live oil trade between parties with Mercuria, which cut costs and reduced the time from three hours to 25 minutes, said a statement.
The world of trade finance is ripe for a protocol upgrade and blockchain is the preferred method to remove paper, risk and delays. The prototype was used in a real trade involving an oil cargo shipment containing African crude which was sold three times on its way to China, and included traders, banks as well as an agent and an inspector, all performing their role in the transaction directly on the platform.
All the big names in enterprise blockchain are taking a shot that the trade finance use case. We have seen R3 and IBM racing out proofs of concept; separate banking and insurance mini-consortia springing up; technology specialists like Skuchain doing great work; and logistics giants like Maersk weighing in.
Patrick Arnaud, managing director for trade & commodity finance, ING, said: "The commodity finance industry is hampered by nature by inefficiencies and outdated procedures. By applying blockchain technology, we expect that we can eliminate a lot of these, making the overall process faster and more cost effective and the tests we have been able to carry out have proved this. The Easy Trading Connect platform helped to digitalise and standardise the transaction process from start to finish."
Federico Turegano, global head of natural resources and infrastructure, Societe Generale Corporate & Investment Banking added: "The Easy Trading Connect platform allowed real-time access to information for all parties, eliminating the need for an acknowledgment process. It also keeps a full data record, which is useful for auditing and as well as having an intuitive navigation system and a well thought through design."
Alistair Cross, global head of operations, Mercuria, added: "We are very pleased with the success of this initial test. The blockchain technology allows for access to real-time data and key details of the transaction all in one ecosystem, creating an improved and more flexible user experience."