Microsoft takes it own blockchain medicine in trade finance deployment
27 September 2016 | 10384 views | 0
Bank of America Merrill Lynch is collaborating with Microsoft on a project to implement blockchain technology for trade finance transactions.
Announced at Sibos, the two companies says the will build and test technology, create frameworks, and establish best practices for blockchain-powered exchanges between businesses and their customers and banks. Microsoft Treasury experts will serve as advisors and initial test clients on an implementation of the company's Azure blockchain-as-a-service suite for standby letters of credit.
Amy Hood, executive vice president and chief financial officer at Microsoft, says: “Businesses across the globe - including Microsoft - are undergoing digital transformation to grow, compete, and be more agile, and we see significant potential for blockchain to drive this transformation.”
She says the deployment has the potential to provide more predictable working capital, reduce counterparty risk, improve operational efficiency, and enhance audit transparency in the traditionally labour-intensive trade finance business.
Percy Batliwalla, head of Global Trade and Supply Chain Finance at Bank of America Merrill Lynch, agrees: "This groundbreaking blockchain proof of concept has the potential to help redefine, digitise, and improve how trade finance instruments are executed today."
Development and testing of the initial application is currently in progress and available to view as a demo at the Sibos baking conference in Geneva. Batliwalla says the project will ultimately be expanded to encompass more complex use cases and additional financial instruments beyond letters of credit.