The partnership will carry out client pilot to establish an end-to-end blockchain-based smart guarantees proposition in trade finance.
Siemens chief financial officer Michael Bueker said: “While digitalisation is revolutionising whole industries, incorporating digital trade finance solution into our daily operations is an important step. Especially at Siemens, as a digitalisation pioneer, this move is part of our strategic mission of going digital in all arenas.”
The blockchain client pilot will fully digitalize the process ranging from initiation of the bank guarantee to the claim handling, which will help replace the traditionally paper intensive bank guarantees business.
The commercial bank guarantee is a better instrument for digitalization compared to letter of credit, which includes multiple parties, performance details and more than 100 pages of documents.
It will allow Siemens to digitize guarantee process for customers with large transaction volumes in the future, spanning issuance, amendments and claims, helping to avoid multiple touch-points and inefficiencies that come with paper intensive process.
Started in March this year, the pilot study will be fully completed by the end of this year.
The proposition, which is based on auto-executing smart contracts, leverages the Corda distributed ledger and application layer provided by TradeIX.
Operating in the $8 trillion trade finance market, the TradeIX platform offers applications, technology tools, and core infrastructure for the trade finance ecosystem.
The platform allows trade finance parties to better connect to trade finance market, including suppliers, buyers, service providers, B2B networks, credit underwriters and financial institutions.
Standard Chartered UAE transaction banking head Motasim Iqbal said: “This is an industry-defining solution which we believe will transform the way guarantees are issued and processed in the UAE.
“Siemens Financial Services has been a key partner for us to build and develop this pilot on the distributed ledger and we believe that this technology can further be harnessed by the Dubai Smart City initiative.”
