Cathay United Bank's "Trade Insight" Blockchain Solution Approved by Financial Supervisory Commission on Trial Basis

• • ．Working together with 7 banks in using blockchain to establish Taiwan's first corporate banking data exchange platform

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• ．Effectively increasing banks' risk management ability and simplifying the corporate financing process

 

  Cathay Financial Holdings had made new corporate banking innovation. Cathay Financial Holdings  and Cathay United Bank took the lead in launching the "Trade Insight” platform, using jointly developed blockchain to launch a financial industry platform for exchanging corporate banking data. The platform prevents companies from double financing and strengthens risk management. It is the first of its kind in the financial industry and was formally approved by the Financial Supervisory Commission (FSC) on a trial basis, setting a milestone for the development of fintech in Taiwan. The number of members in Cathay United Bank's "Trade Insight" alliance has increased from 5 to 8 since last year while the platform firstly established. Yang Ming Marine Transport Corporation and Evergreen Marine Corporation also took part in the alliance now. The addition of these new members is expected to enrich the platform's data for the development of even more applications, and create synergies from collaboration.

 

Strengthening banks’ risk management capability in the alliance to lower the risk of double financing

 

According to statistics of the Ministry of Finance, Taiwan's exports exceeded US$280 billion in the first 8 months this year, which is 30%[1] year-over-year growth. As the COVID-19 vaccination rates increased in major countries around the world, life entered a new normal and recovery of the global economy became even more apparent. Cathay United Bank is optimistic about the growth potential of international trade, supply chain finance, and corporate banking, and thus launched "Trade Insight," applying blockchain to conventional import and export financing scenarios. This will significantly reduce the amount of time bank employees spend reviewing documents, and allows transaction information sent by banks in the alliance to be verified under the premise of protecting transaction privacy, thereby improving the credibility of information, lowering the risk of double financing, and strengthening risk management ability across banks.

 

  Alan Lee, General Manager of Cathay United Bank said: "Cathay United Bank is strongly advocating digital transformation, and embraces financial innovation as it continues to expand digital service channels and improve the user experience of corporate customers. The "Trade Insight" platform was created under the concept of financial innovation, information sharing, and digital services. Cathay United Bank worked together with banks in the alliance to incorporate blockchain and digital processes into current trade financing scenarios, and eliminate management risks derived from information asymmetry between financial institutions. Cathay United Bank is using digital processes to accelerate its loan disbursement and help achieve corporate sustainability. In the future, Cathay United Bank will continue to implement its industry collaboration and cross-industry alliance model to expand data sources, and utilize digital services to accelerate data sharing, improve the business performance and risk management ability of financial institutions, and create a mutually beneficial 'supply chain finance'."

 

Enriching platform data and expanding blockchain application scenarios --Yang Ming and Evergreen join the alliance with 8 banks

 

"Trade Insight" is the first financial industry platform in Taiwan to use blockchain for corporate banking data exchange. The alliance has a total of 8 members that are banks including Cathay United Bank. The 8 banks are as follows: Shanghai Commercial & Savings Bank, Cathay United Bank, Taichung Bank, Shin Kong Bank, Sunny Bank, Far Eastern International Bank, Yuanta Bank, and Bank SinoPac (in the order of financial institution code). Furthermore, the two major marine corporations in Taiwan – Yang Ming Marine Transport Corporation and Evergreen Marine Corporation have also joined the alliance, and will upload their waybill information onto "Trade Insight," enriching platform data. The alliance is currently in negotiations with Leading Information System, a forwarder for international shipping business, SmartBee Intelligence, a logistics supply chain management platform, and Bolero, an electronic bill of lading system company.

 

Chief Information Officer Tsao of Yang Ming Marine Transport Corporation pointed out that "Yang Ming Marine Transport Corporation strives to provide one-stop logistics supply chain solutions, so that customers can more conveniently use shipping services. Participating in 'Trade Insight' not only significantly reduces the time and labor cost of financial institutions from manually verifying information on bills of lading, but also accelerates the loan application process for customers that need a loan. By expanding from shipping to finance, we look forward to letting our customers enjoy safer, faster, and smoother services."

 

  The blockchain framework of "Trade Insight" uses Hyperledger Fabric with high level of data hiding, and uses the irreversible encryption method SHA256 for financial institutions to authenticate transaction documents (e.g. invoices and purchase orders) provided by suppliers, as well as shipping documents (e.g. air and sea waybills and customs declaration forms) provided by marine corporations, in a secure way, reducing errors from manual operations while improving operational efficiency.

 

Looking towards the future, "Trade Insight" is currently planning supply chain related applications, and will gradually expand suitable scenarios and enrich platform data. It will also expand commercial applications of blockchain in exports to help companies expand their global trade.