PermataBank Presents "Trade Finance" Service with Blockchain Technology

PT Bank Permata Tbk (PermataBank) officially presents trade finance services or trade finance with technology blockchain. According to his claim, PermataBank become the first bank to serve transactions trade finance with technology blockchain in Indonesia.

To present blockchain, PermataBank in collaboration with Contour Network which is a technology network provider company for trade finance in global. In Southeast Asia, a number of banks that use Contour technology include HSBC, Standard Chartered Bank, and Bangkok Bank.

Trade finance is a financing facility for domestic and international trade transactions. Utilization blockchain allows data transactions to be carried out in a decentralized manner real-time with concept distributed ledger.

Director of Wholesale Banking PermataBank Darwin Wibowo said, adoption blockchain This is PermataBank's move to respond to customer needs through digitizing its various services and navigating the national payment system with technology.

No less important, all this time he was assessing the transaction trade finance often done conventionally so it is less efficient and takes a long time. The process got even more complicated when the Covid-19 pandemic occurred. Social and activity restrictions have an impact on delays in transaction procedures.

According to him, implementation blockchain will facilitate global trade transactions to publishing needs letters of credit (L/C). With its advantages, blockchain considered capable of saving transaction time, minimizing the risk of fraud, and simplifying complex processes that have been a major challenge in transactions trade finance.

"Not only that, technology blockchain will expand PermataBank's service coverage. Customer trade finance can also make transactions without having to come to the PermataBank branch office," said Darwin.

Meanwhile, Contour CEO Carl Wegner added that global trade plays an important role in the Indonesian economy. However, transactions trade finance which has been done manually so far has hampered the growth of trade. Thus, Contour's involvement in the facility trade finance at PermataBank is expected to open access to communities around the world.

Transformative technology for trading

Based on 2020 report Global Trade Surveys released by the International Chamber of Commerce, trade activities and trade finance (trade finance) in the world is on the verge of uncertainty due to Covid-19.

Based on the results of a survey of 346 banks from 85 countries in the world, respondents expressed their concern about the decline in transaction growth trade finance. However, respondents actually rate the activities lockdown and WFH actually accelerate the transition of trade to digital platforms, one of which is through technology blockchain.

As many as 54% of respondents said transformative technology is a priority area for their development and strategic focus in the short term because they want to secure future growth. According to respondents, digital technology can spur greater transformation opportunities in the global financial industry, which is still synonymous with paper-based manual processes.

In the writing, Head of Trade and Supply Chain R3 Alisa DiCaprio mentioned that the activities trade finance are among the most difficult to modernize. The reason is, the transaction process so far still involves many paper-based manual processes which are considered no longer suitable in the digital era. According to Asian Development Bank (ADB) data, nearly $1,5 trillion of trade finance applications were rejected because of inefficiencies.

He assesses blockchain have tangible results in reducing costs, risks, and potential delays for parties involved in trade finance transactions. If implemented effectively, blockchain could potentially unlock $1,5 trillion in global trade finance.