The we.trade blockchain platform that targets SMEs for European cross border trade finance, officially launched last year. But like many blockchain projects it was a very soft launch. Today one of the member banks, Nordea, announced it’s now making the platform available to all its SME clients. We believe that 200 Nordea clients were waitlisted and are being onboarded. The bank services clients in Denmark, Finland, Norway and Sweden.
Most consortia-style blockchain networks, including we.trade, have members who are competitors. So each we.trade shareholder will launch the offering when they’re ready. The roll out of a solution like we.trade involves a significant amount of work because it targets SMEs and is essentially a retail offering. Hence it has involved trade finance personnel visiting the Nordic countries to train teams on how to service we.trade.
What is evident in the client-targeted material on the Nordea website is the focus on the business solution. The fact that we.trade uses blockchain is only mentioned near the bottom of the page. It’s conceivable that some banks may not mention blockchain at all.
“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,” said Magnus Montan, head of Business Banking. “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.”
SMEs like the transparency offered by a blockchain platform. we.trade also incorporates some logistics tracking and the parties can choose which events will trigger payments.
“Almost 60 percent of the SME’s said that they have to make advance payments so there is obviously a sense of insecurity surrounding cross-border trade,” Patrik Zekkar, Global Head of Trade Finance & Working Capital Management at Nordea. “This is unfortunate, not only from a liquidity standpoint, it may also lead to companies refraining from trading and not growing. We want to change how our customers do business with each other and are now building an ecosystem for it.”
We.trade addresses three needs identified in customer surveys. Payments are triggered by events, a bank guarantee provides peace of mind, and the sellers can sell the invoice to the bank to secure earlier payment.
The we.trade banks are: Deutsche Bank, CaixaBank, Erste Group, Eurobank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale, UBS, and UniCredit.
Last week we.trade announced that Ciaran McGowan has been appointed as General Manager, taking over from the first COO Roberto Mancone. Under Mancone’s leadership, the consortium incorporated, we.trade onboarded three banks from the Batavia consortium which was disbanded, and we.trade entered into a deal with Hong Kong trade finance project eTradeConnect.