Standard Chartered to digitise paper heavy trade finance process
(30 August 2018 – Singapore) Standard Chartered has partnered with Siemens Financial Services and digital trade provider TradeIX to roll out a client pilot that will create end-to-end, blockchain based, smart guarantees in trade finance.
The bank aims to digitise the previously paper-intensive process from initiation of bank guarantee to the claim handling stage.
Unlike letters of credit which usually involve multiple parties, Standard Chartered claims that a commercial bank guarantee is easier to digitise, the solution will enable Siemens to digitise its guarantee process for customers with large transaction volumes in the future, spanning issuance, amendments and claims.
The pilot started in March 2018 and will be fully completed later this year.
The bank is the latest to capitalise on the growing shift of trade towards the Asia-Pacific region. Median trade transaction volume reported in the region hit a total value of $2.15 trillion, nearly double the level processed in North America and about 10 times the volume in Africa, according to the International Chamber of Commerce.
The growth is expected to increase, representing an estimated 38 percent of global trade flows by 2020, whilst the US share is expected to drop to 8.7 percent over the same period.
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