Microsoft-BAML Blockchain Partnership Aims to Improve Trade Finance

by Steve Murphy 0

During the SIBOS conference (a major corporate banking industry event developed and managed by SWIFT), which this year is being hosted in Geneva, Switzerland, an announcement was made regarding another Blockchain partnership. This one involves both Microsoft and Bank of America Merrill Lynch, who stated that they will be working together on a trade finance solution to accelerate the cumbersome and paper-laden current experience in servicing traditional trade programs.

Mercator Advisory Group has written extensively on the potential effect of Blockchain technology in the corporate banking space, with the most recent report entitled Tracking Fintech Innovations For Corporate Banking. While the underlying technology for Bitcoin has enjoyed great investment levels, it remains to be seen whether there is light at the end of the tunnel. One of the key benefits that Mercator expected to unfold from the R3 consortium (and other private collaborations amongst the FI community) is the ability to shorten the cumbersome traditional trade finance process flows. In reading our report entitled Blockchain in Corporate Banking: What’s Up? Mercator makes a case that Blockchain will have its’ first major corporate banking breakthrough in this space. It appears that fintech agrees. In this same report, we go on the predict several other key banking product spaces that will also be impacted.

This article states that

“The underlying nature of trade finance in its current form is highly manual, it’s highly time-consuming and it’s paper-based, so we thought this would be a good opportunity to streamline the way trade transactions are processed,” BAML’s head of global trade and supply chain finance, Percy Batliwalla, told Reuters.

We will continue to track this important technology space as Blockchain spreads its wings into corporate banking.

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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