One of the most exciting business blockchain pilot projects of the past couple of years has come in the form of ING’s trade platform. ING launched the Marco Polo initiative in 2017 and the bank has already seen encouraging results with short transaction times and confirmed transparency for all involved stakeholders. The initiative put forward a blockchain finance platform called Trade IX with well-known partners Consortium R3.
This pilot is one of the first of its kind to be implemented within the finance industry and has a dozen financial institutions participating in the project including BNP Paribas, Wells Fargo, and Royal Bank of Scotland. Since its launch, the platform has been well received both in and outside ING. As Ivan Wiersma comments, “the technology ran fast and smoothly and the positive results showed us we were on the right track”. Positive first impressions from firms like ING will be vital to the widespread adoption of blockchain technology.
In fact, it appears this transition is occurring right now as more financial institutions are joining the enterprise blockchain project. Firms such as Standard Chartered and Op Financial Group have expressed their interest in adopting blockchain technology. Clearly the success of the initiative is making the rounds in the financial community. This had lead many commentators to question why financial firms are starting to warm to the idea of blockchain.
The reason is efficiency. For a long time, internal processes that rely on paperwork and direct management of transactions have hindered the finance industry. According to Connie Leung of Financial Services Business Lead, “heavy paper processing across complex supply chain processes are a significant burden to businesses”.
ING’s platform, and others like it offer finance institutions an opportunity to move away from the outdated processes that are capping their operational efficiency. A blockchain ledger can monitor thousands of transactions without any need for interaction at all. Likewise, verifying consumer documentation can also be achieved through the use of blockchain rather than manually checking documentation by hand.
Blockchain records all transaction data in one place, where it can be easily accessed and used by the relevant parties. Using platforms such as Trade IX will streamline financial payments and decrease the amount of manual processing needed to keep a firm in operation. On the client’s side this results in faster transactions, but on the firms side results in greater efficiency.
As more banks make the transition to blockchain technology there will be much less money lost on account of manual errors and fraud. After all blockchain not only offers to increase transaction speed, but will also serve to eliminate the errors that occur as part of manual processes as well.