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From Global Trade Review (GTR) | By Sanne Wass
R3 has trialled a global, blockchain-powered know your customer (KYC) utility together with 39 banks, firms and regulators.
The four-day collaborative trial, which took place in May, saw the completion of more than 300 transactions on an application designed and built by Synechron on R3’s Corda blockchain platform.
It enabled participants, which included the likes of BNP Paribas, Deutsche Bank, ING and Société Générale, to communicate and manage test customer KYC data across the network. The solution works as a “self-sovereign” model, allowing corporate customers to create and control their own identities, including relevant documentation. Banks can request access to the data, whilst customers can approve requests and revoke access. Any updates that are made become automatically visible to banks with permission to access the data.
R3 says in a statement that the trial reduced duplication and costs by eliminating the need for each institution to individually attest to and update KYC records.
A utility like this could be a game-changer for the trade finance industry, where the cost and complexity of compliance with regulation, including KYC requirements, remain a big barrier to the availability of finance. A shared utility could help ease mundane compliance processes that are often duplicated across financial institutions.
While KYC utilities have already being explored by other firms, to date most have had limited success due to low uptake.
But R3 and Synechron believe that the use of blockchain technology will make their solution more appealing to the industry.
“We’ve had increasing demand from our network for blockchain-based KYC solutions as they recognise that blockchain can address many of the challenges facing existing utilities,” Jane Kenyon, project lead at R3, tells GTR.
Tim Coates, US blockchain lead at Synechron, emphasises the fact that the application is decentralised and gives parties control of their own data as key differentiators from existing utilities.
He adds: “Blockchain’s immutability used as a new verification mechanism, and its peer-to-peer nature enabling greater data privacy are two of the native features that have attracted many in the KYC sector to blockchain.”
While Kenyon could not give details on a specific future timeline, she did say that R3 is working with a number of partners to develop applications on CorDapps to facilitate KYC on Corda, adding: “We are open to working with members who want to take these solutions forward in their institutions.”
The banks and corporates involved in the project include: ABN Amro, ALD Automotive, Alfa Bank, Bank ABC, Bank of Cyprus, BCI, BNP Paribas, China Merchants Bank, Commercial International Bank, CTBC Holding, Deutsche Bank, DNB, Hana Bank, ING, KB Kookmin Bank, Banca Mediolanum, Natixis, National Bank of Egypt, NH Nonghyup Bank, Qiwi, Raiffeisen Bank International, RCI Bank and Services, SBI Bank, Shinhan Bank, Société Générale, US Bank and Woori Bank.
In addition, a number of regulators and central banks took part, including Banco de la República (Colombia’s central bank), Federal Reserve of Boston, Superintendencia Financiera de Colombia and Superintendencia de Banca Seguros y AFP de Peru.
According to Kenyon, a planned feature of the fully developed KYC application would include an observer node that would be assigned to the regulators, giving them visibility on the entire network.
The post R3 and 39 firms trial new blockchain-based KYC utility appeared first on Global Trade Review (GTR).
From Global Trade Review (GTR) | By Sanne Wass
Insurtech startup Credable is expanding the geographical coverage of its invoice insurance offering to cater for a large demand from exporting SMEs.
Credable, which was launched in Sweden in March, is the first stand-alone brand that has come out of the Euler Hermes Digital Agency. Using the latest insurance technology (insurtech), its fully digital platform offers Swedish SMEs an on-demand insurance option that covers against late or unpaid invoices on a single invoice or buyer.
During the pilot phase, which started in September 2017, Credable focused on insuring SMEs’ business in the four Nordic countries, but added another 13 European countries, including Italy, France and the UK, at the product launch. Now, adding another seven countries, Swedish SMEs can get coverage in 24 jurisdictions across Europe.
Speaking to GTR, Credable’s managing director Richard Garnier says this geographical expansion was only planned for later in the year, but the firm decided to “accelerate” its efforts in direct response to feedback from existing and potential clients.
“We’re continually talking to our users and prospects to understand their real-world experiences. One theme that kept emerging time and time again is how concerned SMEs are when they trade internationally, and how having the support of Credable and Euler Hermes is of interest to them,” he says.
Of the new countries covered by Credable are Germany, Belgium and the Netherlands, which Garnier describes as “significant additions to the portfolio”.
He adds that export is a “particularly good use case for our customers”, as the product provides reassurance to companies that their clients in distant territories are trustworthy financial partners and their payments are protected if any problems arise.
This is done through the platform’s two main features: first, it provides an instant “traffic light” risk calculator for an SME’s potential customer. Once a Swedish SME has been accepted onto the platform, it can search a database and see the creditworthiness of a firm it is about to do business with. For this, the platform uses an API (application programming interface) to access Euler Hermes data on millions of companies around the world in real time.
Secondly, the user can automatically get a quote for insurance coverage of an invoice, and instantly buy it. The platform calculates the premium cost, based on the invoice size, the payment terms offered and the credit rating of the buyer.
Apart from the geographical expansion of the platform, today’s announcement also includes the addition of new features, one of which allows SMEs to retroactively insure their invoices.
Credable now has 400 registered SME users, many of whom are now repeat customers. But the insurtech company believes there is much space for growth, noting in a statement that Swedish SME exporters represent “a huge market opportunity”, as most trade credit insurance today does not cater for SMEs’ need for easy and flexible insurance.
As such, Garnier says the quick growth is partly due to Credable creating more awareness around its product.
“Trade credit has been largely contained for a large-corporate audience,” he says. “Here we are taking a new market on a journey, and quite often that starts with explaining the concept, and perhaps the initial transaction being local, with a known supplier, and as we explain the application’s ability and as their trading grows, they look to use it internationally.”
Going forward, Credable will continue to add more countries in which Swedish SMEs can insure their exports. Garnier says countries outside of Europe are “on the agenda”, but can’t comment on the specific timing.
What he can say is that, by the end of the year, the firm will start expanding beyond Sweden to countries in which SMEs can buy Credable’s insurance.
The post Euler Hermes’ insurtech brand expands coverage for exporters appeared first on Global Trade Review (GTR).
BBVA has taken a leading role in the race for blockchain adoption in trade finance, having successfully piloted Wave’s blockchain solution for paperless trade.
It is the first bank to complete a live pilot with the Israeli fintech firm since Barclays last year received wide attention for being the first-ever bank to use blockchain technology in a live trade transaction.
Wave was one of 11 companies to go through Barclays’ accelerator programme in 2015. Its service allows for the digital exchange and management of all shipping and trade-related documents through a secure decentralised network.
Last week, the company announced it had kicked off a new round of live pilots after having spent the last year developing its product with feedback from a large number of players in the international trade ecosystem.
BBVA’s pilot was run on a letter of credit transaction with Frime, a Spanish company, which bought more than 25 tonnes of frozen tuna from Pinsa Congelados, a Mexican firm.
A letter of credit transaction usually takes between seven and 10 days to process. The large volume of documentation required entails often error-prone processes such as manual checks and sending physical documents.
Using Wave’s system, BBVA was able to send, verify and authorise a trade transaction between the two companies in just 2.5 hours.
In a statement, BBVA’s head of global trade and international banking, Patxi Fernández de Trocóniz, says the pilot “represents a leap forward in improving the efficiency of international trade transactions”.
Thanks to blockchain technology, all parties (the banks, the importer and the exporter) had constant transparency of the status of the documents and could make necessary changes or corrections throughout the transaction – from the time the goods were loaded until their arrival at the destination. The pilot included the electronic signature of documents, the simultaneous distribution of copies to all parties and the reception of the ownership of the documentation at each step along the way.
The transfer of funds, however, was done via traditional routes – using Swift. Nevertheless, BBVA says that blockchain “could be applied to the final credit card payment and even to the prior procedures and financing of the operations”. In addition to the pilot with Wave, BBVA has also conducted others for currency conversions and international transfers. In April, for example, it completed a transfer using Ripple’s blockchain payments service, also in a transaction between Spain and Mexico.
Another six banks are lined up for live pilots with Wave in the near future. With this, Wave has taken one step closer to releasing a commercial blockchain-powered product for paperless trade.
Its first successful pilot was announced last week, but didn’t include a bank. It involved Israeli shipping company ZIM and Hong Kong-based logistics firm Sparx Logistics, and tested specifically the issuance and transfer of bills of lading.
“With Barclays, it was a live transaction with all documents submitted through Wave,” Gadi Ruschin, Wave’s CEO, told GTR last week. “However, it was in the very early days – it was a race to prove that it can work in a live environment. It was done on the most basic Wave application, which was not even considered to be a product. Since then, the application has evolved and we are now very happy to take the next step forward and expand the testing.”
He added that the next version of Wave, which will be a commercial product, will be released in the coming months.
“It will have a nice interface and be much more robust. After that, we will start promoting the brand and create as many success stories as possible. When we believe it is tested enough in order to go full-scale to the market, then we start our go-to-market process.”
The aim is for this to happen by mid-2019, he said.
Euler Hermes, the world’s leading trade credit insurer, today announced an innovative partnership with fintech credit risk analysis company, CRiskCo. With a focus on revolutionizing factoring, trade and supply chain finance, CRiskCo uses state-of-the art artificial intelligence (AI) credit analysis and fraud detection processes.
Christophe Spoerry, Euler Hermes Digital Agency (EHDA) co-founder, said, ” EHDA and CRiskCo are working together to evolve trade credit insurance and risk management, particularly at the transaction and single invoice cover levels. This has the potential to offer small-medium enterprises (SMEs) significantly more protection when doing business, by providing innovative, simple and affordable customer analyses.”
EHDA recently launched its first breakthrough product – Single Invoice Cover – which protects companies from non-payment by business customers. Cover is provided transaction by transaction while optimizing end-to-end supply chains and extending optimal credit terms to buyers. Based on a proprietary application program interface (API), it creates a seamless process for businesses, while facilitating a comprehensive and granular management of credit exposure.
CRiskCo uses its strength in harvesting and analyzing data to develop smart algorithms that can evolve the underwriting capabilities within the Single Invoice Cover product. Based on invoice-level data, CRiskCo reviews accounting data and applies prediction analytics and machine learning algorithms to provide businesses a credit score that assesses the probability of business success or default. The company helps vendors and financial institutions reduce underwriting time and costs using big data processing and cloud infrastructures. It monitors abnormal behavior of clients and clients’ debtors to predict fraud, and alert partners to limit their exposure.
Euler Hermes is the global leader in trade credit insurance, as well as a recognized specialist in the areas of bonding, guarantees and collections. With more than 100 years’ expertise, the company offers B2B clients financial services to support trade receivables management. Its proprietary intelligence network tracks and analyzes daily changes in corporate solvency among small, medium and multinational companies active in markets representing 92% of global GDP.
Euler Hermes Digital Agency focuses on technological disruption. Leveraging Euler Hermes’ global leadership and experience, it acts as a platform where innovators and entrepreneurs can take the driving seat. The EHDA mission is to incubate breakthrough ideas in trade finance to better serve customers, cultivate a digital culture and quickly create new disruptive fintech products. Digital Agency teams use data mining, machine learning and advanced algorithms to create and test client solutions for better risk and marketing decisions. EHDA and their partners focus on highly scalable credit risk technologies and services by fast tracking ideas into experiments and new products, many designed to serve start-ups in the alternative finance and fintech markets.
The post Euler Hermes Digital Agency Announces CRiskCo Partnership appeared first on Euler Hermes US.
Trade credit insurer Atradius has rolled out its new global credit management portal, giving businesses “an advanced way to complete credit insurance transactions”.
Under the name Atradius Atrium, the portal enables its customers to constantly monitor and smoothly interact with their buyers and with the insurer. They will have instant access to information about buyers’ creditworthiness, such as buyer ratings, current cover and claims.
With a clear picture of the buyers, companies can apply directly and immediately for cover. In most cases, credit limit decisions are immediate.
The Oracle-based portal is now part of Atradius’ digital platform. In a statement, the company says Atrium is “designed to evolve with digital advancements and user requirements”, and more features will be introduced over the next six months.
The company’s chief market officer, Andreas Tesch, says that “in a nutshell” the launch gives Atradius’ customers a “more efficient, user-friendly service platform” as it simplifies account activities and reduces the risk of suffering losses caused by payment defaults.
“This new approach and technology is a tremendous timesaver for all and reduces the possibility of errors,” he says. “Our customers can essentially check a buyer’s creditworthiness during a deal negotiation and have cover approved before the end of the meeting. It supports better risk management and growth potential with a clear insight on safer trade for them.”
Atradius plans to expand the portal to include customer access to detailed portfolio overviews highlighting trends and events that may impact the policy, direct access to other information relevant to the users as well as claims filing “in just a couple of clicks”. Atrium will also be able to provide a clear overview and information for brokers and agents to manage multiple policies and customer portfolios.