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AIG and TradeIX complete blockchain trade finance transaction

Posted: 10 October 2017 | | No comments yet

TradeIX, AIG and Standard Chartered Bank have partnered to create a secure and more efficient solution through blockchain technology…

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American International Group, Inc. and TradeIX Limited have successfully completed the first blockchain-enabled trade finance transaction for a global logistics company, with financing provided by Standard Chartered plc.

TradeIX and AIG have partnered to enable trade finance transactions for companies, using the blockchain-enabled TIX platform. Trade finance programmes give companies access to capital, allowing them to improve their payment terms with their suppliers and clients.

The invoice finance transaction took place at the end of September and enabled the logistics company to help its customers extend their payment period while maintaining the company’s receivables at current terms. Financing was offered by Standard Chartered and credit risk mitigation was offered by AIG.

Managing global invoice payments can be time-consuming and inefficient for companies, as trading partners often have unique requirements based on specific payment terms, currencies, country-specific laws, and contract terms. Because of this, companies often establish multiple, local, trade finance programmes, which can involve duplication, inefficiencies and minimal standardisation across the organisation, making it harder to optimise working capital and have effective visibility of compliance and counterparty risk across the company.

Through this successful transaction, TradeIX, AIG and Standard Chartered Bank partnered to create a secure and more efficient solution through blockchain technology.

Marilyn Blattner-Hoyle, Head of Supply Chain and Trade Finance at AIG said: “Using blockchain technology to facilitate trade finance transactions makes it easier for companies to benefit from trade finance, allowing more companies better access to working capital and making insurance more available to finance-providers. By using this blockchain-enabled platform, clients are able to benefit from the extended ecosystem that trade finance brings, but with a reduction in friction and cost and an improvement in speed and transparency.”

Meanwhile, Farooq Siddiqi, Global Head, Trade, Transaction Banking at Standard Chartered said: “Digitalisation of trade and trade finance is integral to our strategy and by working together with leading fintechs, we can create innovative solutions to better support the financing and information needs of our clients and their ecosystem of buyers and sellers.”

Rob Barnes, CEO of TradeIX, also commented, saying: “We are changing how trade finance is being offered through our TradeIX platform. It is designed and positioned as a ‘Network of Networks’ platform focused on low-cost transaction execution in a highly-secure environment, representing the world’s first shared and open infrastructure for global trade. The launch of our first major transaction with AIG marks a significant step forward in bringing our innovative solution to leading financial institutions and global corporate clients. We look forward to expanding our relationship with trade finance parties to reduce cost, lower risk and enhance funding opportunities in the large and growing trade finance market.”

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