Standard Chartered, ABN Amro, ING, and roughly 50 additional banks and firms have joined in the trial of a trade finance application Voltron.
According to an announcement from R3, the open industry platform was started by eight founding member banks with the goal of enhancing the trade finance process by streamlining letter of credit transactions to bring faster settlement period and resolution of discrepancies, along with enhanced sanctions screening.
The trial witnessed companies from 27 countries utilize Voltron, which was created by R3 using its Corda platform, to facilitate simulated letter of credit transactions. Although the current process is time-consuming and paper-based, Voltron processes in less than 24 hours as opposed to the traditional 5-10 days, R3 stated.
The tests were brought on Microsoft’s Azure cloud platform in partnership with CryptoBLK, Bain, and R3.
According to R3, 96 percent of the test participants determined that Voltron would assist them in enhancing trade finance processes and decrease costs.
Alfa Bank head of innovations Denis Dodon said:
“Everything is done in the same interface, which is connected to all the workflow participants, information is shared instantly, what will significantly expedite the transaction, optimizing working with documents, which could be rectified in an instant way should there be any discrepancies identified.”
R3 added that the platform is “significantly faster, more reliable and cost-effective,” getting rid of time-consuming reconciliation processes by offering a “single, immutable record of a trade.” It also reduces the risk of fraud as an added benefit.
R3 CEO David E. Rutter called for other banks and companies to participate in the initiative, saying that the tests are “step closer to shaping what the future of trade finance looks like.”
Other participants in the tests included CommerzBank, Societe Generale, MUFG, Natixis, National Bank of Egypt, Commercial Bank of Qatar, and the Saudi British Bank.