Global trade is not only about transporting one thing from point A to point B. As goods and services move, they pass through a net of intermediaries, such as forwarding companies, customs agents, regulators, and financial institutions. They either physically check the good or track its movement, using different system and procedures, often still based on paper work. Banks and other financial institutions in the centre of the system, enabling global trade by providing credit, guarantees or administrative support. Such a process is not only time and resource-intensive due to its decentralization, but also prone to mistakes and duplication. This makes trade finance a perfect candidate for the application of blockchain, where a distributed database with verified information about traded good and trading process is accessible to all partners in real time. Redesign trade finance using blockchain, maybe you will invent a completely new financial (or other) service all along! Applications can address thefollowing:
Automation and digitization of trade processes, also in conjunction with IoT (Internet of Things)
More transparent and efficient supply chain: verifiable and secure tracking of goods, risks and events between exporter and importer.
Monetization of trade finance data
Insurance is, above all, the based on assessing risks, fact-checking and providing reliable information about events. Blockchain’s immutability, pseudonomity and secure access to sensitive data without a central authority makes it a perfect match for the needs of insurers, brokers and their customers. With the use of DLT they can speed up the exchange of verifiable data and automate insurance regulatory reporting. Moreover, combined with IoT and space technology blockchain can generate huge cost reductions and efficiencies. Assessing storm damages, flood affected areas, progression and forecasting forest fire development, and analysing potentially vulnerable areas rely on and benefit from accurate EO (Earth observation) data. Typically, most damage assessments are done by physically visiting the site of interest. Impact areas can be vast and consist of multiple locations. This is time consuming and relatively costly and most of all, customers must wait, at worst, for months on settlements being issued. How can you deploy blockchain to facilitate the following operations?
Claim documentation using space technology and/or IoT (Internet of Things)
Fraud detection and risk prevention by immutable distributed ledger
Self-executing insurance contracts
Know your customer (KYC) is the process of verifying the identity of clients and assessing potential risks of their illegal intentions, such as money-laundering or fraud. Banks and most fintechs legally obliged to perform KYC and other measure to prevent money-laundering and financing terrorism. KYC processes are also used in companies to ensure their proposed agents, consultants, or distributors are anti-bribery compliant. Immutability of blockchain provides a way to gain quick and secure access to up-to-date customer data, while it also reduces the time spent on customer onboarding and eliminates the need to repeatedly provide the same information. You can apply these DLT properties for:
Online identification and identification services
Automation of reporting fraud and money-laundering