We.Trade Blockchain for Trade Finance hosts Swiss Financial Giant UBS

We.Trade Blockchain for Trade Finance hosts Swiss Financial Giant UBS

Blockchain Training Institute: UBS, one of the banking pioneers from Switzerland initiated full-fledged transactions of we.trade. we.trade is a trade finance platform, which is based on blockchain technology and has almost achieved wide adoption amongst its member banks.

A spokesperson from UBS informed us that at the beginning of October, they went live on we.trade platform in order to offer services to small and mid-sized enterprises (SMEs).

The spokesperson further mentions that they were getting in touch with clients to elucidate them about the new platform and guide them through the process.

Blockchain brings to the world of global trade increased trust factor between companies conducting trade agreements by providing a shared digital record, which was previously paper-based. we.trade aims to establish a trusted framework amongst the SME customers of European banking institutions. Through we.trade customers can avail services such as bank payment guarantees and invoice financing, for which a fee s being charged by the banks.

Established in mid-2018, we.trade has left behind its competitors like Marco Polo, a trade finance blockchain based on TradeIX and R3 mechanism and which is still in its pilot run. At present, we.trade platform is working on huge commercial acceptance by following a multi-pronged methodology that of attracting more banks and onboarding more SMEs.

In the current month itself, a couple of banks such as Erste Group of Austria and CaixaBank from Spain have started on live transactions. Apart from these, Eurobank of Greece and three major banks of the Czech Republic, CSOB, Komercni are in line to join the network by early next year. Additionally, the three major Czech banks have around 80% of domestic trade volume in the Czech Republic.

The general manager of we.trade, Ciaran McGowan informed us that:

We are starting with a model where the auto settlement product is free in the Czech Republic, to see if a free model for domestic trade generates easy and rapid onboarding that works for us.

Regarding Eurobank, Gowan mentioned that Greece still follows the culture of post-dated checks and thus, they view this platform as a substitute resource, which was another use case that we.trade had not thaught off.

we.trade platform is already being used by many banks such as Societe Generale, HSBC, Santander, UniCredit, Nordea, KBC Bank, Rabobank, and Deutsche Bank to settle trade contracts.

The more, the merrier

McGowan added that the banks are inspiring their corporate clients to utilize we.trade, thus increasing its acceptance. According to him, the augmented alliance between corporates and banks is fascinating.

Marie-Laure Gastellu, the deputy head of trade finance of Societe Generale, requires more acceptance from SMEs for using the platform. She further mentioned, in order to have more SMEs, more banks need to join the platform, not just as some equity investors but as actual users of we.trade. Additionally, she mentioned that their SME clients were very happy to have an offer like this and were asking them to persuade other banks to join the network.

Gastellu further mentioned that one of her bank’s clients from France was having a trade with an Italian company, which was not using the platform. Moreover, following the client’s endorsement, the Italian company created an account with Unicredit and became a part of we.trade.

According to Gastellu, we.trade acts as a tremendous tool for establishing new relationships for banks.

There were similar scenes from Scandinavia, where Nordea established a we.trade network of customers across Sweden, Norway, Denmark, and Finland.

For instance, according to Ville Sointu, head of emerging technologies at Nordea suggested his supplier in Spain from whom they imported limited-edition sneakers to open a company account with Santander, which would enable them to sign up to we.trade.

We.trade intends to add features to its technology that would allow the clients to send out invites to their partners to join the platform. Sointu added, they can increase the network by creating a model that allows customers who have already signed up and are on a lookout for a party to conduct trade.

Sointu further mentions that Nordea has presented we.trade as one of the banking products. In other words, similar to a corporate credit card, they have we.trade brochures, customer support, et al. Additionally, they have an actual landing page for we.trade.

One thing you won’t find on that page is the word blockchain.

Pricing

For an inquisitive early user, a $2,000/ month is charged for trading on the platform, whereas a complete annual membership license is available at $175,000. At we.trade testing a project would cost $75,000/ year.

According to McGowan, until now, the shareholder banks have paid $330,00 p.a. He further mentioned that while interacting with other banks, they were informed that the pricing was too expensive, and so they took their advice.

Further, McGowan mentioned that we.trade platform was developed on IBM and is based on an open-source hyper ledger fabric blockchain mechanism, but he intends to establish the tech unit in-house in the near future.

Additionally, McGowan mentioned that as we.trade is a technology firm, they would like to develop their own technological expertise. He further added that they maintain a cordial relationship with IBM and that IBM understands that they cannot pay for an outsourced team in the long run.

Published at Tue, 05 Nov 2019 11:05:17 +0000

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