Their numbers are slowly growing, which raises the question – if having more inclusive leadership teams is important, where were these women before?

Which institutions appoint women (and which don’t)? 

Back in 2020, before these particular appointments, we wondered whether global organisations followed their own advice by appointing more diverse senior leaders. We focused on multilaterals like the UN and the Bretton Woods institutions (IMF, WB, WTO), but the results are common across all global institutions, including regional organizations. 

While there has been positive progress in growing the proportion of women employees globally, in organisations in our sample (we looked at about 129 key global and regional institutions) there was no parity in appointed or elected leaders.

For the average institution, over 30 years spanning 1990-2020 women had been appointed only in every 4^th case – out of 624 possible appointments, only 158 resulted in the selection of a woman. But even this overstates the actual situation, as nearly half of the sample had never appointed any women at any time in the past. 

Indeed – women were persistently being appointed to the same institutions, with 84% of women appointments happening in just 30 (out of 129) institutions. 

Breaking this down, we can see that there are certain types of institutions which have appointed multiple women leaders over the years. Such “anchoring” of women in a subset of institutions led to every third institution never having had any women leaders. 

Turns out, hard science or politically “charged” institutions were among the ones that have never had a woman leader.

Is the candidate pool the source of the problem?

One clear message from the data was that when women are present in the candidate pool, they are likely to be the selected winner. However, there is a catch here – candidate pools for top positions in multilateral organisations are often determined by the member states, over which the institution itself has little to no control. 

With a history of no women appointees in some institutions, member states may strategically nominate only male candidates, anticipating that a woman will not be elected. 

These preordained outcomes of (not) nominating women illustrate why there should be a commotion every time a woman is elected – bringing attention to the issue would signal a shift in both expectations about who is an appropriate leader and would reward institutions for recognising that.

Do women leaders bring gender equality within organisations?

Once a woman is appointed or elected head of an organisation, questions begin about what impact that has. Do they, for example, implement policies that result in the organisations themselves becoming more equal? 

Based on the data on staff composition in over 30 UN organisations, the answer is no. Appointing a woman leader doesn’t automatically improve overall gender equality in staffing, at least at first.  

An interesting caveat is that once there is a second woman appointed as head, equality of staffing does in fact improve. This means that institutions that appoint women heads multiple times are more likely to have a more gender-diverse workforce than those that appoint one woman once. 

2 ways trade finance can use this information to increase the frequency of women leaders

Trade finance has the double whammy of being a combination of two male-dominated fields – trade and finance. 

A number of trade publications have awards for women in trade finance, which suggests that the industry has recognised the need to promote women leaders’ successes. But is this enough? 

Our research suggests that if trade finance is truly interested in increasing the number of women leaders in the industry, there are several steps financial institutions and fintechs might consider taking. 

• Be deliberate about your candidate pool. This is an activity that the private sector has much more control over than international institutions. There is no reason that a candidate pool should not include diverse candidates. 
• Cultivate and mentor your existing staff. Finance is a relatively closed sector, staff often move among many different banks over the course of their careers. This means that it is in the interest of the entire financial sector to identify and mentor high achievers. It will benefit the entire community. This is particularly important for trade finance where attracting and motivating younger staff can be a challenge. 

To maximise the benefits of having a woman leader, don’t stop at one. The cascade of positive impacts from a women leader starts when it is clear they are not a token appointment. 

Read the full paper here: https://www.cambridge.org/core/journals/politics-and-gender/article/abs/beating-the-odds-womens-leadership-in-international-organizations/5281A775D3F7379042AB281CC1B3E051

The post Leadership against the odds: Women’s uphill battle for top roles in international organisations appeared first on Trade Finance Global.

As Contour, the last-standing global trade finance project built on DLT moves to its next stage, we should be honest about what this speed bump means for trade, trade finance, and blockchain. 

Here are the 5 lessons I’ll be taking away to inform ongoing projects:

1. Blockchain is (still) not the problem 

We’re all thinking about it. DLT was a common element among Marco Polo, we.trade, Tradelens, and Contour. But there were never any reports that the technology killed otherwise successful projects, so let’s put this to bed.

2. Digitisation needs activists

Contour and its DLT peers hired some of the most competent people in trade finance. But even they need champions in the trade community. 

The few times global trade has innovated, it has been either the result of an activist leader – the Port of New York standing behind the trucker who popularised containers; or a common enemy – SWIFT started with 239 banks in response to the threat that a private American bank (Citibank) would control all financial flows. 

This is deeper than Contour or Marco Polo. Global trade does not have a leader. The WTO is a reasonable suggestion, but since 1994, the governance structure and political pressures have left it at a standstill.

Change across jurisdictions requires activism.

3. Commit to a long runway

When Boston decided to put an elevated highway underground? The Big Dig used well-understood technologies and still took 16 years, killed at least 11 people, and went 190% over budget. 

Nearly all of the DLT projects – Contour included – ran out of runway. One reason is the regulatory guidelines took too long to catch up. In the absence of regulations, they used rulebooks, which limits the rapid expansion of the technology. 

How long does change take? At least 4 years, in my experience.

In 2018, a group of us (including BAFT and Shearman & Sterling LLP) wrote this paper to advocate for an update to UCC Article 3. US guidelines were needed to allow electronic negotiable instruments. It took until 2022 for the draft amendments in a new Article 12 to be released. The previous revision of Article 5 took 8 years (see footnote 7 in the paper).

4. Do better than paper 

Paper is the most interoperable instrument we have. Contour and others digitised bills of lading and other trade documents. But without harmonised standards and guidelines, any trade transaction defaults to paper. 

Take eUCP 600. It was intended to be the ICC’s guidelines for digital documentation. However, it is only very lightly used in favour of regular paper-based UCP. One reason suggested by a bank was that customers are just more comfortable with UCP, even if it isn’t that efficient. 

Electronic bills of lading are another example of how lack of interoperability hurts adoption. Companies like Bolero have existed since 1998, yet in 2021, Digital Container Shipping Association (DCSA) estimated that only 1.2% of global bills of lading are electronic. 

In the end, the real world still transacts in colour-coded quadruplicate. Until we can improve the interoperability of paper, this will take some time to change. (I’m hopeful that CBDC may push this along).

5. Attracting new ideas is critical

What Contour did was ignite excitement in trade finance. It’s not the sexiest job, but for the past 5 years, it has attracted a younger, more dynamic crowd. This infusion alone has been a significant benefit.  

It’s important to remember how critical Contour has been to the modernisation journey in the trade finance space. The goal was to modernise paper with a digitised workflow. Contour introduced efficiency into these features  – processing time was down 90% – without changing them. 

Trade is a complicated ecosystem. Maybe it’s time to consider whether CBDC could be nudge that the 195 countries in the world need to prioritise updating regulations to create the space for trade digitisation.

The post Top 5 trade lessons from the Contour collapse appeared first on Trade Finance Global.

With digital solutions now poised to transform this sector into a more streamlined and cost-effective industry, now is the time to harness maturing technologies to implement widespread and strategic change.

Enterprise blockchain is perhaps the most promising and appropriate technology to enable this journey.

Trade is inherently a decentralised system, and the decentralised nature of blockchain makes it a perfect fit for trade finance.

For the first time, the industry is getting behind this new technology and moving it into real-world deployment at record pace.

With the industry experiencing a period of reflect and reset like never before, how are participants benefitting from this change?

Digital value-add

Many of the processes and technologies underpinning trade finance have not been modernised in decades, from paper-heavy processing to juggling between multiple portals and documentation for each shipment.

These inefficiencies in trade finance mean that nearly $1.5 trillion of in-demand capital across the industry is rejected by banks, according to the Asian Development Bank (ADB).

Moreover, some 60% of banks expect this figure to rise over the next two years.

Developing markets that rely heavily on access to trade can be severely hindered through trade finance’s outdated processes.

By digitising these manual processes, such as invoice financing, and superseding ageing legacy systems, blockchain can have a real impact on reducing the costs, risks, and delays to participants involved in trade finance.

Creating an open, inclusive global network

Blockchain’s integration across the financial services ecosystem has delivered some encouraging results so far.

That said, there is growing debate about how blockchain can provide decentralised solutions for trade financing.

One such solution is real-time visibility, which is available via permissioned access to authorised network users, and gives buyers and sellers unprecedented transparency into the status of their transactions.

In addition, settlement finality removes the need for intermediaries to perform reconciliations. All of these applications could streamline the entire process.

Moving to mass adoption

For trade finance to truly capitalise upon the digital revolution, mass adoption on a global scale is essential.

This elusive network effect can only be achieved if technology players prioritise forward-thinking and inclusive integration solutions that lower the barriers to entry for all types of companies involved in the trading process.

If only a handful of firms adopt a blockchain solution for invoice financing, the benefits such as speed, efficiency, and lower costs mean nothing, as there won’t be enough counterparties to connect with.

Marco Polo is a key example of a solution built for its market. The Marco Polo Network has developed a solution for post-shipment trade financing using the TiX platform.

Powered by the distributed platform from TradeIX and R3’s Corda blockchain technology, Marco Polo enables end-to-end, real-time, seamless connectivity between trade participants.

This eliminates the data silos, which prevent free flow of information, causing inefficiencies and discrepancies.

The adoption of digital solutions, however, will not happen in one big bang moment.

With many businesses yet to become fully digitally-native, the key to unlocking blockchain’s true potential lies within plugging this technology into existing infrastructure rather than overhauling legacy processes entirely.

Put simply, integration holds the single most important key to rewiring the $8 trillion global trade finance market and solving the $1.5 trillion shortfall.

Read our latest issue of Trade Finance Talks, Spring 2022

Read here

The post Why blockchain holds the key to bridging the trade finance gap appeared first on Trade Finance Global.

The acquired framework will be used to roll out an electronic Bill of Lading (“eBL”) solution Powered by Corda, R3’s leading enterprise blockchain platform. The new eBL toolkit, natively built on Corda, will enable significant operational optimization opportunities for R3’s clients in Trade and Trade Finance industries.

Dorothy Lim, CEO of E-Title Authority, said “the company has developed a robust legal framework for eBLs, accepted by the International Protection & Indemnity Club, the global insurance association comprising over 80% of the marine insurance market crucial for trade operations. R3’s enterprise-grade technology provides a perfect base to realize our product vision for eBLs, as well as extend the full value of the developed legal framework to a broad range of global trade players.”

David E. Rutter, CEO of R3, said: “Our technology, combined with E-Title Authority’s legal framework, allows us to create a powerful tool to accelerate international trade digitalization and to streamline logistics and financial supply chain trade processes. This solution will enable seamless integration with the existing vast Corda-powered trade finance and supply chain ecosystems. R3 is constantly looking for the best opportunities to improve our customers’ experience and empower them to accomplish more using Corda. This acquisition will help us pave the way forward in enabling technology companies to build the next generation of digital innovation in global trade.”

Despite the near universal reach of the internet and the acceptance of digital signatures as legally binding, most trade partners continue to create and exchange paper documentation. Title and negotiable documents, such as the bill of lading, are some of the most critical documents for trade, allowing goods to be exchanged for payment and enabling companies to obtain financing.

Read now

Technology companies have struggled to offer fully digital trade solutions, in part, because of the difficulty of establishing a proper legal basis for electronic negotiable title documents. As a result, most existing solutions are partially digitalized, diminishing the potential value proposition for banks, corporates, carriers, and other trade and supply chain participants.

R3’s eBL toolkit will provide Corda Enterprise customers with an opportunity to fully digitalize the negotiable title document exchange and management. It will also enable technology companies to lower the cost of utilizing negotiable title documents, accelerate their go to market efforts, and enable the peer-to-peer transfer of eBL across parties, applications, and business networks.

Read now

The post R3 acquires e-titleTM’s electronic Bill of Lading solution appeared first on Trade Finance Global.

So you’ve built yourself a blockchain, now what are you supposed to do with it?

Integrating the new technology into legacy systems is a key indicator for success.  If you can bring the best of both the new and the old together to offer you optimal results, then the technology is serving its purpose. R3 has been doing this for the past twelve months, and it has led to some interesting insights that I would like to share. 

Four different projects – Marco Polo, Voltron, RiskStream and Lendercomm – have used different strategies to ‘push’ and ‘pull’ back-office data. All of these have been developed over the past year and carry important implications for other blockchain solutions. 

APIs are how blockchain talks to your system

The blockchain application you run talks to your legacy system using the same technology that you use today. You could use RESTful APIs, for example, to connect the data to your existing system of record. 

In R3’s case, we have been building out our Remote Procedure Call (RPC) library of functions. This allows us to offer integrated options for existing legacy systems. Behind the scenes, the APIs that you create to connect your existing system to our Corda platform are ‘talking’ to the Corda RPC client, which then executes all the actions.  

APIs are critical for users to access the full functionality of their blockchain application. They allow clients to push and pull data onto the blockchain. In other words, they allow users to select the data that truly adds value for them and fits their individual use case. The blockchain then adds the security of a distributed system and the immutability of data, among its other benefits.  

ERP integration pulls data directly from your corporates

The problem trade finance applications face is how to make the experience seamless for the corporates that use it. 

A large transnational corporate might have six different banking relationships that each require a bespoke connection from their Enterprise Resource Planning (ERP) back-office system to the bank’s platform, and then onto the bank’s own back-office system. 

TradeIX’s project Marco Polo has built a native Oracle NetSuite App that directly pulls data from the Oracle NetSuite Cloud ERP system. For the corporate, that means that you continue to use your ERP as before, and instead of building another bespoke bridge; now you download  the app which pulls data out directly. The Marco Polo ERP App is live today for Marco Polo’s receivable finance solution going live in the coming months.

Use your existing back office and industry providers 

A second problem trade finance applications have is how to integrate with existing industry-wide tools and bank back-office systems. 

Different blockchain applications have addressed hooks in different ways. In insurance, RiskStream Collaborative has built functionality that links into Guidewire, which is one of the two main systems to add efficiencies to all areas of risk management used in the insurance sector. This way, the blockchain solution, in this case, the “CorDapp”, pulls data about the claim using the inputs that insurance companies already produce. 

Other projects are also pursuing this model – contracting with existing providers to build a different level of data integration, rather than moving to something altogether separate. Many of the major bank back-office providers are exploring how to do this now on business networks like Voltron. 

Finastra’s Fusion Lendercomm will be used by agent banks for to automate the servicing required for syndicated lending. The app connects to Finastra’s existing on-premise solution Loan IQ for purposes of automating the information exchange between agent banks and leners. This means that re-platforming is minimal and the banks are simply reporting information as they were before through phone calls, faxes and e-mails in a digitize and automated fashion. 

Enough about data, what about payments? 

A final issue in blockchain and trade finance is payments. Obligations must be settled, either using digital currency or using traditional payment systems. Since on-ledger digital currency is in its infancy, most trade finance applications intend to settle obligations on traditional payment systems. 

This is why R3 and SWIFT combined to integrate Corda to SWIFT net. This uses Corda Settler and SWIFT’s API gateway, gpi Link. Announced in January 2019, this integration allows  users to create obligations and initiate and confirm settlement via the traditional correspondent banking system. Corda Settler allows two parties to create a contract that defines the amount, time, location, currency, and terms of payment.  It requires an api connection to both initiate and – critically – confirm transaction completion. SWIFT gpi link provides that, 

Like any piece of technology, blockchain will be most useful when used in conjunction with existing systems. The reality is that most businesses are not ‘digitally native’ and so will rely on legacy systems – all to different extents. The key to unlocking blockchain’s true potential is therefore not to try and oust these but to make sure blockchain fits into the right place. 

The post Where do you plug in your blockchain? appeared first on Trade Finance Global.

Listen to this podcast on Spotify, Apple Podcasts, Podbean, Podtail, ListenNotes, TuneIn, PodChaser

Season 1, Episode 3

Host: Deepesh Patel, Editor, Trade Finance Global

Featuring: Alisa DiCaprio, Head of Trade & Supply Chain, R3

Deepesh Patel: I’m Deepesh Patel, Editor at Trade Finance Global.

R3 on Blockchain – Bridging the $1.5tn trade gap

Trade is changing rapidly. Aside from the macroeconomic and geopolitical challenges we see today, the digitalisation of the hugely complex supply chain is anything but straightforward. It’s a physical problem – we have exporters, importers, freight forwarders and financiers. But ultimately, a lot of the challenges surface around data and the exchanging of it. Blockchain and distributed ledger technology presents an opportunity to digitalise trade, but also comes with challenges.

We’re going to be hearing from Alisa DiCaprio, Head of Trade and Supply Chain at R3. Alisa is a leader and at the frontline of blockchain technology, looking after standards, governance design and trade strategy at R3. We mentioned in last week’s podcast, these are so important for making trade digital. Alisa joined R3 from the Asian Development Bank, where she looked after digital trade, trade finance and innovation as a senior economist.

With that in mind, TFG has partnered with BCR at their Blockchain Consortia, being held in London this May. For listeners of this podcast, by using the promo code TFG19 you’ll get an exclusive 10% discount at Consortia 2019 in May.

Deepesh Patel: So, without further ado, here’s Alisa DiCaprio, joining us from New York! Hi Alisa, thank you so much for joining us on today’s podcast!

Alisa DiCaprio: I’m excited to be here!

What is R3?

AD: R3 is an enterprise software company that builds and maintains a blockchain platform called Corda. We started out as a consulting company where we were building applications in blockchain for a consortium of banks, and we were building on various blockchain platforms on Ethereum, Multichain, but we quickly realised when it got the deployment there was no regulated financial institution that was going to deploy a public blockchain in their internal system. So, we went back, surveyed our member banks, and asked them what they would need a blockchain to do. They told us, we took that back and we built Corda from the ground up with the requirements of the financial institutions that were members of our consortium.

Addressing the $1.5tn Trade Finance Gap

DP: Trade is reportedly worth US$9 trillion per year. Yet, according to consistent reports and statistics from the ADB and ICC, we have a US$1.5 trillion dollar trade finance gap, mostly due to SMEs and emerging markets, who can’t access finance to trade overseas. We know trade and engine for economic growth. So what exactly is causing this problem?

AD: I think this is a terrific question and I’ve been working on this particular issue for a long time. That number was calculated by the team I ran when I was at ADB. What we know about that trade finance gap, like you mentioned, is that it’s mostly SMEs, mostly emerging markets, and the cause for this is really about visibility. Small- and medium-sized enterprises are terrible at signalling their fitness to be financed. So a lot of the finance requests that go unmet are not necessarily because the SME is a high-risk proposition; it can be anything from the fact that the SME doesn’t have the proper paperwork or hasn’t recorded the transactions in the right way, to potential concerns about KYC that can be verified, because the data isn’t there.

We’ve already recognised that SMEs are a potentially valuable market and their ability to be financed is something that’s important, both from a bank perspective and a development perspective. So, I think the entire industry understands that and is speaking to solve that problem. There’s some really interesting ways the blockchain is being applied that will be able to do that. I strongly believe that.

We’ve already recognised that SMEs are a potentially valuable market and their ability to be financed is something that’s important, both from a bank perspective and a development perspective.

DP: You and your team has written a number of papers on trade and blockchain, and the potential. I guess we’re here to get an overview of blockchain for trade and supply chain. But let’s turn it around and talk about the customer pain points. So, from the bank’s perspective, what are the current pain points and challenges for these customers?

AD: From a bank perspective, there are really two things that blockchain seeks to solve that are current pain points. The first one, as we have just discussed, is really about visibility. Where are the goods? Where are the documents? Are they the correct documents? Do they have the right data in them? The second is about reconciliation, which is similar but not the same. In trade, you have various documents that are exchanged between different systems. Some of those systems are electronic, but the problem is they don’t talk to each other. You might, for example, have a completely digital banking system. But then when you’re taking in the different pieces of data and information from the buyers and suppliers, they’re using a different digital system. So you’re not actually able to talk with each other – you’re inputting the data yourself manually that you’ve imported from the partners. It really slows down the process a lot.

DP: Let’s go into bit more about digitalisation. As you mentioned earlier, it’s not a new concept, and there has been a lot going on in the past to try and make attempts to digitalise trade. In this case, we’re talking about eBills of Lading, eUCP standards, the bank purchase obligation and OCR techniques at these instruments on the market that are not good enough right now.

AD: Those are all very good instruments that are being built by our partners, but I think they all have challenges. What it boils down to is that each of them is very different. It’s easy to make something digital, but you really need to build a lot more into the ecosystem in order to allow for ease of usage and the expansion of the ecosystem. So how do you build a network effect is really where it becomes challenging.

We do have electronic Bills of Lading – and there’s lots of parties (including Commerzbank) that have built different systems that can allow for electronic Bills of Lading – but there’s really only three companies that have been certified. So when you talk about electronic bills of waiting, even though the general population that could build those is very large, the actual functioning population is quite small.

I think BPO is quite similar as well as for BPO to scale, it requires the entire ecosystem to be on board with the same platform. And in trade that is something that’s very difficult to do; you’re never going to have 100% of your parties on the same platform. There will always be a point in your trade transaction where you’re going to need to hit print, or to submit some documents to a customs agency that requires a physical signature or a stamp.

So for these reasons, when you have centralised systems that are seeking to solve the problem it just doesn’t work. That’s really why blockchain is fundamentally different from these previous digital solutions, even though it is also a digital solution.

The Network Effect

DP: I guess the network effect is really the focus and the potential opportunity to work in conjunction with some of these technologies and, and finance instruments. Where are the key opportunities for blockchain within the trade finance space? And what is R3 doing here?

AD: In the trade finance space, we’ve seen two major projects that are going into production this year. The first is about Letters of Credit – that’s project Voltron. And the second is a suite of open account solutions, which is the project Marco Polo. And both of these I think are fighting for very different reasons.

The first is with Project Voltron – Letters of Credit are notoriously difficult and slow and very unpleasant to actually do. And by having that on the blockchain, we’ve shortened the process from taking five to ten days to taking less than 24 hours. And that is accounting for the different time zones and things like that.

Now, Marco Polo is a little bit different. Because open account is much more of a kind of wild west space, right? It means something different to everybody that uses that word. But really what Marco Polo has done in that project is seek to open opportunities for new types of finance. And that’s really where the blockchain has its greatest opportunity. It’s not just about digitalising the process, which is critical as well, it’s about how we enable finances for different parts of the trade transaction.

There’s a number of other solutions that we have built on Corda as well, because like I mentioned earlier, Corda is just a blockchain platform – it itself does really nothing. So we rely on our partners to then build applications on top of that. Within the partner ecosystem, we have everything from trade, credit insurance, open account, Letters of Credit, and all sorts of other solutions that are relevant and trade everything from logistics to maritime. We have payments with the GPI link that we built, which enabled Corda to be used with swift GPI to allow payments on the blockchain. So, there’s a whole lot of really exciting things going on. And it’s really re-architecting, the way that we do trade today, in a way that I think is going to be great for SMEs. And it’s really allowing a lot more opportunities to offer clients in ways that we haven’t done before.

Corda versus Hyperledger Fabric – What’s the Difference?

DP: We recently spoke to some of the architects at we.trade last week and they mentioned that having competition within their Corsortia space is good. So, tell me what are the key differences between the Corda platform which R3 have built and IBM’s blockchain platform, which uses hyperledger fabric?

AD: I think they’re right. When you have competition in this space it is very, very important, because competition is what leads to innovation. So I think it’s terrific that we’re seeing all of these different platforms going to market. There’s definitely fundamental differences between hyperledger fabric and R3 Corda – both of them are our private permission blockchain, which is why you see so much traction happening in trade finance, and insurance for both of them, because if you’re looking at an enterprise blockchain solution, it really needs to be one that’s suitable for an industry which is highly regulated. In terms of the major differences between fabric and Corda, it really boils down to the ability to scale and interoperability.

Corda projects are all interoperable with each other. So if you build a trade finance solution on Corda, it can transfer assets and interoperate with a payment solution or a trade credit insurance application. What this means for our members is that you don’t have to build up every single piece of the application that you want – if you want to plug in trade, credit insurance, just use a different app. On Corda you can do that, whereas with fabric, they are not interoperable between each other; you’re building an individual siloed business network.

The second way that they’re different is really in terms of how you can expand the network. So of course, if you want to add another supplier or another bank, it’s quite straightforward because we don’t do global broadcast, we only do point-to-point transfer of data. Whereas with fabric, they use channels, so every time you bring in a new entity onto the network, you need to build a new channel. And that increases engineering complexity and makes scale a little bit difficult. We have found that a number of different applications have re-platformed from Fabric on to Corda, because of the problem that they run into with channels that they couldn’t scale up. If you have 25 nodes, that’s fine, but once you have 1,000 or 10,000, scale becomes very challenging with fabric.

Interoperability

DP: Do you think there will ever be a way that banks working on the Hyperledger fabric platform will be able to interact with other banks working on the Corda platform?

AD: I think that’s going to be teethed in the future. This is something that we’re all working towards. One prominent initiative is the Universal Trade Network (UTN). What this does is it looks at how to build the infrastructure for interoperability when it becomes possible. So the reason you don’t see interoperability between different blockchain platforms today is because it just doesn’t make sense – none of the different platforms are mature enough to make it sustainable to build bridges between them.

So, for example, if it’s possible to build a bridge between Hyperledger fabric and Corda, then when you upgrade fabric, it goes to a different version and the bridge breaks. Everything is backwards compatible with in Corda, so Corda is stable, but certainly Ethereum, as one example, isn’t. It therefore wouldn’t make sense to build a bridge today. Going back to the earlier question about how to make interoperability happen, UTN is at the three fundamental features you would need for interoperability once the platforms are ready. These three things include communications protocols, identity framework, and data format. So basically, what we’re doing with UTN is looking at how to create a standardised state object for things such as an invoice. However, it is still very much a work in progress.

DP: In terms of next steps, what are you most excited about? What are the next few years looking like for both R3, and also trade finance with respect to digitalisation using DLT?

AD: One of my biggest focuses right now at R3 is building out our work in the supply chain. Because what we found is as we’ve gone to pilot with these different trade finance applications, that we’re engaging corporate, and they’re asking us, what else can we do next? Corda was built for regulated financial institutions but there are plenty of other sectors that are just as regulated as banks.

In terms of R3 more generally we’re doing some really exciting things. Trade is very much about the exchange of data. In general, we think about trade as being the exchange of goods, right? You have a buyer and a seller, and they’re shipping something between them. But in fact, for a bank, it’s really about how you get the data about those goods between different parties. How do you then reconcile the data and make sure that it’s correct? So a lot of what we have focused on recently is connecting different sources of data, which is what blockchain is great at.

A lot of what we’ve been focusing on is where are the sources of data? How can we use them? And how can we use them to open up new sources of financing and new opportunities, both for SMEs and for banks, to be able to interact and collaborate?

DP: Thank you very much, Alisa, for your time with us today. Really appreciate you coming in and talking to us. And we’re really excited to hear some of your colleagues speak in a few weeks at BCR Consorita 2019.

Trade Finance Global have partnered up with Consortia 2019 to give our listeners an exclusive 10% off the event on the 21st and 22nd May, in London. Simply use the discount code TFG2019, or visit test.tfg.pixelfield.dev for more information.

We look forward to seeing you in May, alongside many of the key players and bank consortiums, including, WeTrade, Marco Polo, Komgo and Voltron.

The post PODCAST: Alisa DiCaprio from R3 – Bridging the $1.5tn trade gap (S1E3) appeared first on Trade Finance Global.