A group of seven European banks has agreed in principle to develop a shared platform that aims to make domestic and cross-border commerce easier for European small and medium-size (SME) businesses by harnessing the power of distributed ledger technology (DLT).
Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit signed a memorandum of understanding (MoU) in Brussels under which they intend to collaborate on the development and commercialization of a new product called digital trade chain (DTC).
The banks said the the product is based on a prototype trade finance and supply chain solution originated by KBC and tested to ‘proof of concept’ stage. DTC, which won the European Financial Management Association (Efma) Accenture Innovation Award for “best new product or service of 2016” in October, is intended to seamlessly connect the parties involved in a trade transaction (i.e. buyer, buyer’s bank, seller, seller’s bank and transporter), online and via mobile devices.
This new product will simplify trade finance processes for SMEs by addressing the challenge of managing, tracking and securing domestic and international trade transactions. Larger companies use documentary credit as a way of reducing the risks involved in doing business, but documentary credit is not always suitable for SMEs or for companies that prefer open account solutions.
By maintaining secure records on a digital distributed ledger DTC will accelerate the order-to-settlement process and decrease administrative paperwork significantly. The platform’s end-to-end transparency will also give SMEs confidence to initiate trade with new partners in their home market or in other European markets.
By pooling expertise and resources the consortium members will jointly explore the development and launch of a scalable version of DTC. They will initially focus on building critical mass for DTC in seven European markets: Belgium and Luxembourg (KBC), France (Natixis, Société Générale), Germany (Deutsche Bank, UniCredit), Italy (UniCredit), the Netherlands (Rabobank) and the UK (HSBC).
Criticisms of bitcoin by JP Morgan Chase’s boss have been denounced by a UK academic as “ironic” and “hardly surprising” considering the impact bitcoin could have on financial intermediaries.
Leaked documents from the UK Home Office proposing that low-skilled EU migrants would be restricted in the UK’s post-Brexit immigration scheme may be more likely to increase automation and off-shoring of labour, rather than increase British wages, industry experts have warned.
The European Central Bank's (ECB) hotly anticipated meeting on Thursday afternoon made the euro skyrocket, as president Mario Draghi announced interest rates would remain at 0% and its quantitative easing programme will stay until at least the end of 2017.
The “sad truth” of banking is that many jobs will be automated in the future, Deutsche Bank's chief executive said yesterday. Despite this, a recent survey found that 98% of European workers are optimistic about the changes automation will bring to their workplace.