75% IMPROVEMENT IN CYCLE TIME FOR LETTER OF CREDIT
SHED PAPER AND PROCESSES
India’s trade finance business is seeing steady growth in tandem with the country’s economy. However, trade finance processes are plagued by legacy challenges, including lack of agility and transparency, and susceptibility to fraud. Infosys Finacle, along with a consortium of seven leading Indian banks, saw an opportunity to transform the business by leveraging blockchain technology.
The Infosys Finacle team brought all the stakeholders together, to create an ecosystem of entities involved in the trade finance supply chain, building consensus and collaboration. The team then undertook innovative, agile product delivery to allow the conduct of successful POCs (proof of concept) in a secure cloud hosted common environment. The result was the India Trade Connect network, built on a winning combination of cutting edge technology, willingness to embrace paradigm shifts, and strong collaboration among the participants. Cost reduction, risk mitigation, speed, traceability and security, are among the multiple benefits the participants are seeing from the pilot.
THE FUTURE OF TRADE
India Trade Connect is powered by Finacle Trade Connect, a blockchain-based solution for all banking trade finance requirements that:
Digitize trade finance business processes, including
ownership validation, documents certification and payments fulfillment, on a distributed, trusted network
Offer wide functionality, including bill collection, letters of credit, open account for trade, C2C/B2C transactions, and purchase order/ invoice financing
Agnostic to the underlying distributed ledger infrastructure (Hyperledger, Corda, Ethereum, Bitcoin etc.) to avoid
technology evolution and obsoletion
Sanat Rao, Chief Business Officer, Infosys Finacle:
“Blockchain technology offers unprecedented opportunities to transform banking as we know it. Like any innovative technology, the usage of blockchain-based applications will gradually increase from early adopters to others who will join based on proven and tangible benefits. At Infosys Finacle, we are committed to reimagining banking and providing a continuous thrust on collaboration with our clients. In pursuit of this, digitization of trade finance processes using distributed ledger technology offers immense potential to eliminate friction, cut costs and increase revenue through new business products that are now viable using modern technologies. Infosys Finacle is committed to helping our clients realize the path breaking benefits of blockchain technology and we look forward to many more collaborations to strengthen this consortium and to building other networks around the world.”
Letter of Credit cycle time down to
almost a fourth, at 2-3 days
No SWIFT costs; lower cost of transporting documents
SAFE AND SECURE
Invoices and orders uniquely identified and stored to lower the risk of duplicate financing. Real-time dashboards track trade instruments through their life cycle
Supply chain visibility enables banks to offer new business products like purchase order and invoice financing and innovative products like open accounts for trade
THE FUTURE IS INTELLIGENT
The India Trade Connect initiative brings a paradigm shift in trade and heralds the arrival of collaborative ecosystems. Buoyed by its initial success, India Trade Connect aims to build a wider trade ecosystem of banks and other participants. The near term goal is to entirely digitize and automate the entire trade finance processes. Next on the agenda is a pilot network for open accounts, and expansion into non-banking areas.