Nordea, a co-developer of the we.trade blockchain-based platform for European trade last July, is opening it up to more of its customers.
The Nordic bank said that it is making we.trade available to its small and medium-sized enterprises (SMEs) and wants the platform to help alleviate trust deficits that currently hamper their cross-border trades.
We.trade is a joint project involving 12 banks including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Santander, Société Générale and UniCredit, and is based on the IBM blockchain platform. We.trade began its first live operations with pilot customers last July Nordea joined the project in 2017 and soft-launched it for select customers last month.
The trust issue
Nordea hopes that making we.trade available to SMEs will alleviate issues hampering cross-border trading. “Almost 60% of SMEs said that they have to make advance payments, so there is obviously a sense of insecurity surrounding cross-border trade,” commented Patrik Zekkar, global head of trade finance and working capital management at Nordea.
“This is unfortunate not only from a liquidity standpoint, it may also lead to companies refraining from trading and not growing.”
Trading on the we.trade platform is controlled through a set of rules designed to bring security to the process. Trading parties can choose what specific events will trigger payments, while contracts can be drawn up in multiple languages.
Nordea says that by building an ecosystem for the buyer and seller, it takes on a new role and interacts with customers as early as from the order, not just at the time of payment.
“We see more and more small and medium sized companies getting involved in cross border trading,” commented Magnus Montan, Nordea’s head of business banking. “There are some common challenges that they face.
"The biggest one is related to trust in their overseas trading partners. we.trade is not only about providing trade finance, it is something much bigger than that. It is about enabling trade and with we.trade we are creating an ecosystem for the global trade, where trust is an integral part.”
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