Nordic based financial services company, Nordea Bank Obj, commonly known as Nordea announced that they will now be making their we.trade platform available to all their small and medium business customers.

The blockchain based platform, initially launched in April, offers a secured venue for European companies to trade with each other and increases the bank’s offering for SME customers. Developed on the IBM Blockchain platform we.trade is a blockchain based venture developed by twelve countries, with Nordea joining in on the collaboration in November 2017. By building an ecosystem for the buyer and seller, the bank takes on a new role and starts its interaction with the customer as early as from the order, not just at the time of payment.

Speaking about this venture, Magnus Montan, Head of Business Banking for Nordea said. “We see more and more small and medium sized companies getting involved in cross border trading. There are some common challenges that they face. The biggest one is related to trust in their overseas trading partners. we.trade is not only about providing trade finance, it is something much bigger than that. It is about enabling trade and with we.trade we are creating an ecosystem for the global trade, where trust is an integral part,”

The bank implied that almost 60 percent of the SME’s have to make advance payments creating an obvious sense of insecurity surrounding cross-border trade. In addition to that customer surveys identified three primary needs that were key in the first commercial version of the platform. Event-driven payments meet the stated need for automated payments. A guarantee by the bank satisfies the need for secured payments, should the buyer lack sufficient funds. The seller may also sell the invoice to the bank and gain earlier access to payment.    

Patrik Zekkar, Global Head of Trade Finance & Working Capital Management at Nordea, explained that trading over the we.trade platform simplifies the order and contract processes between buyers and sellers. Trading is controlled through a set of rules, which adds security to the process. Flexibility is gained as the parties are offered to choose for example what events will trigger payments.

 

by Niket Jithra
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