Blockchain’s disruptive nature has inspired industries across the world to find new ways to redefine their businesses. The financial sector was not left behind. Recently, banking players in China decided to use blockchain to create a financial platform. Therefore, this allows for the rapid approval of trade loans in financial markets. HSBC (HSBA.L), Standard Chartered (STAN.L), and ten other key players in Hong Kong, launched the new platform, called eTrade Connect , on Wednesday.
According to reports, other key players include the Hong Kong de facto central bank, the BNP Paribas (BNPP.PA), the Hong Kong Monetary Authority(HKMA) and the Agricultural Bank of China.
Benefits of the eTrade Connect blockchain platform
The eTrade Connect platform reduces the time it takes to approve trade loan applications from one and a half days to 4 hours. Additionally, the banks aim to use the new platform to reduce fraud risks associated with letters of credit (LoC) and other financial transactions.
Also,the new technology is faster than traditional banking processes. It eliminates the need for lengthy, tedious procedures. In fact, the e-Trade platform will increase productivity by allowing parties to share documents through its system. Additionally, the platform reduces the substantial volumes of paperwork generated by the banking industry.
Using the Distributed Ledger Technology will also ensure the security of transactions. Sensitive information belonging to the clients and the banking agencies will remain safe on the blockchain.
The banking system also hopes to increase transparency in different operational departments by using blockchain technology. Clients and concerned parties will be able to access transaction records and other banking documents at any time. Therefore, this will reduce fraud and many illegal activities in the industry.
e-Trade Connect already operational
The system is ready and working. Pricerite, a furniture and household goods company, was the first to try the new system. Following this successful launch, many people in the industry are convinced that this new platform will take things to the next level.
In 2017, trade finance transactions added up to over $9 trillion. With this new platform in place, experts predict slightly higher figures in the next financial year.
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