CGI and National Bank of Canada pilot letters of credit platform
The digitization of trade finance has received a further boost after Canadian IT group CGI and partners National Bank of Canada and Skuchain announced a pilot letters of credit programme.
Areas of trade finance and supply chain management have been – over the past year – developed into working practices by producers, shippers and banks, but secure standby letters of credit are usually conducted over email and, therefore, error prone and subject to lengthy delays.
Licenced by National Bank of Canada, CGI integrated its CGI Trade360 trade finance platform with Skuchain’s Contract Builder on its Brackets blockchain smart contracts platform.
“Customers will be able to initiate, conduct and conclude negotiations of standby letters of credit and guarantees entirely on smart contracts that can intelligently construct agreements and securely communicate any changes in terms to relevant parties,” CGI said on a blog post on Cision PR Newswire.
The result for National Bank of Canada is an end-to-end blockchain-enabled trade finance process that will improve processing times greatly, reduce risks and build up customer goodwill.
In addition, the streamlined process will offer greater visibility, lower costs and increased security for all counterparties across the business lifecycle, CGI adds.
“This pilot project is a great opportunity to leverage blockchain technology to simplify the process for negotiating standby letters of credit and guarantees while making it more transparent and secure,” says Patrice Roy, vice president, payments, cash management and international solutions at National Bank of Canada.
“This will enable us to offer a simple, fast and efficient experience to our commercial clients which facilitates managing their business.”