10th October 2017

IBM and UBS collaborate with banks to advance an open, blockchain-based trade finance platform

Bank of Montreal, CaixaBank, Commerzbank and Erste Group have joined an initiative, launched by UBS and IBM in 2016, to build a new global trade platform based on blockchain technology. This new platform, called Batavia, is built to be openly accessed by organisations of all sizes anywhere in the world, and can support trade finance for transactions across all modes of trade, whether goods are being transported by air, land or sea.

The development work is being done collaboratively by the five banks and IBM in consultation with transportation industry experts as well as the banks’ customers to ensure that the platform is flexible and intuitive for customers and can be commercialized. Batavia is targeting pilot transactions with customers on the network in early 2018 to test and refine the platform.

Designed to support more efficient, transparent and cost effective transactions, the new global trade financing platform will help organisations build multi-party, cross-border trading networks worldwide more easily. Batavia will allow transacting parties to view the progress of a shipment as it leaves the warehouse, is loaded onto a plane, truck or boat and arrives at the receiving port, automatically releasing payments incrementally along each step of the process.

The platform will help connect participants in a trading network, delivering the potential to transform global trade. The open nature of the platform, which encourages broad participation by many banks, vendors and regulators, will also help open new trade corridors, bring new players into the market and expedite processes that before were prohibitively time-consuming and expensive.

Fabio Keller, IBM project leader, said: “In working with hundreds of clients to implement blockchain solutions, financing global trade has emerged as one of the use cases most in need of innovating. Targeting the creation of large, global, multi-modal networks that bring transparency and trust to each step of the trade process is what makes Batavia a platform with so much potential to transform the way companies around the world do business with one another.”