CGI and the National Bank of Canada are collaborating on a blockchain project to streamline the process of negotiating financial standby letters that are used by banks for credit and guarantees.
Simplifying Contract Negotiations by Blockchain
The collaboration is a blockchain-based process that is geared to simplify the current hassles of obtaining conditional agreements that banks use to secure financial transactions. The current method used to negotiate and secure the contracts is usually done by email, which is both open to errors and can take require a time-consuming back and forth of emails.
The National Bank of Canada and CGI have put their heads together to integrate a CGI Trade360 finance platform with the Skuchain’s Contract Builder to create a blockchain-based system that allows banks to digitally provide financial services to their clients in the easiest way possible.
Breaking down the goals of the pilot, the National Bank of Canada’s Vice President of Payments, Cash management and International Solutions manager, Patrice Roy said:
“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. This will enable us to offer a simple, fast and efficient experience to our commercial clients which facilitates managing their business.”
Using Smart Contracts to Speed up Affairs
The new B2B blockchain solution will use smart contracts to speed up the negotiation processes for the credit standby letters so customers can securely communicate changes to the agreements in the timeliest of manners.
The new blockchain-based tool will also help to strengthen the relationship between the customer and bank while reducing risks and improving processing times. This will use pre-approved templates by the banks that will allow the negotiations to take place on a distributed ledger. With full automation and integration, the new process aims to lower costs across the board while also offering high visibility and transparency.
The Vice President of Trade and Supply Chain Solutions at CGI, Frank Tezzi was very upbeat on the subject when saying that:
“The use of blockchain offers a shared ledger that serves as the single source of truth during pre-issuance negotiation and through issuance and re-issuance processes. This example provides certainty and transparency for beneficiaries regarding the guarantee process as they enter into a financial transaction.”
