Infosys Finacle Launches India Trade Connect in Partnership with Seven Leading Indian Banks
Infosys launched India Trade Connect, a blockchain-based trade network in India, in partnership with seven leading banks, namely, Axis Bank, ICICI Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank, South Indian Bank, and Yes Bank.
The banks are using the network to run a pilot of Finacle Trade Connect, a blockchain technology based solution created to cater to the trade finance process requirements of banks. The IT giant announced the global availability of Finacle Trade Connect in November 2017.
According to their press release, Finacle Trade Connect will enable increased automation and transparency, while helping to efficiently manage risks in trade and supply chain financing operations. Meanwhile, India Trade Connect has also won the Celent Model Bank 2018 award for Trade Finance and Supply Chain.
The Infosys press release quoted Sanat Rao, Chief Business Officer, Infosys Finacle, “Blockchain technology offers unprecedented opportunities to transform banking. Like any innovative technology, the usage of blockchain-based applications will gradually increase from early adopters to others who will join based on proven and tangible benefits. At Infosys Finacle, we are committed to re-imagining banking and providing a continuous thrust on collaboration with our clients. In pursuit of this, digitization of Trade Finance processes using distributed ledger technology offers immense potential to eliminate the friction, cut costs and increase revenue through new business products that are now viable using the modern technologies. We are committed to helping our clients realize the path-breaking benefits of blockchain technology and we look forward to many more collaborations to strengthen this consortium and building other networks across the world.”
The network, while being distributed, trusted and shared, has been created with a plan to digitize trade finance business processes like validation of ownership, certification of documents and making payments. It includes banking functions such as Bill Collection, Letters of Credit, Open Account for Trade, Customer to Customer, Transactions for Trade, Business to Customer transactions for Trade, PO financing, and Invoice financing.
According to the press release Ajay Gupta, Senior General Manager, ICICI Bank, said, “We are delighted to partner with Infosys Finacle to successfully set up ‘India Trade Connect’ – a blockchain based trade network that will enable end-to-end digitized trade transactions across the country. We believe, this will enable automation, increase transparency as well as enhance efficiency across trade and supply chain operations. With more organizations adopting the blockchain technology, it holds immense potential to offer a seamless network for all stakeholders on a single platform. Going forward, we intend to collaborate with peer banks and other partners and create a comprehensive blockchain ecosystem, thereby contributing towards greater adoption of this technology.”
The blockchain nature of the network is designed to provide a single source of the truth for parties involved in a transaction, while transforming banks by removing inefficient trade processes and hence creating new businesses for banks.
Infosys’ trade finance network is an answer to banking frauds such as the recent Punjab National Bank (PNB) fiasco, when two jeweller groups, with help from rogue PNB staff, managed to raise credit from Indian banks’ overseas branches using fake trade finance guarantees. The transparency of blockchain technology will prevent such incidents.
The features of the network claims to reduce costs by offering information such as the exact position of a bill, instant secure transfer of messages and documents, and reduction of cost through digitization of information exchange. The underlying blockchain infrastructure, which aligns with the already running Finacle Trade Connect, is created with technology evolution risks of the future in mind.
Because the nature of blockchain technology is based on super encryption, banking and finance is the first field where we can expect its adoption at a rapid pace.
According to the press release, Asit Oberoi, Group President and Global Head, Transaction Banking Group, YES BANK, said, “Blockchain is the biggest ever collaborative technology available till date and I believe, we are on the threshold of a paradigm shift in the “Trade Finance Digitization” landscape in India. Having come together along with other players in the Banking industry and a dependable technology partner, we have commenced on the next phase of transformation that promises to redefine Trade Finance practices in India. We are looking forward to witnessing intensive usage of this Asset domestically and also connecting with global networks in due course.”
Infosys Finacle is the digital banking solution of EdgeVerve Systems, which is a wholly owned product subsidiary of Infosys. Finacle helps traditional and emerging financial institutions to achieve digital transformation. Currently, banks in more than a hundred countries use Finacle, servicing more than a billion consumers and 1.3 billion accounts.
Apart from Finacle, banking software used in Indian banks as well as overseas include Bancs from Tata Consultancy Services, Flexcube from Oracle, and T24 from Temenos. While Bancs is used by over 280 institutions in more than 80 countries, Flexcube is also a prominent rival of Finacle.
However, Finacle is to be congratulated for being a pioneer in bringing blockchain to Indian banking. Its solutions address core banking, omnichannel banking, payments, treasury, origination, liquidity management, Islamic banking, wealth management, analytics, artificial intelligence, and blockchain requirements of financial institutions.