HSBC is the latest entrant to the growing list of Banks that are creating and deploying Blockchain technology to streamline their services.
To fully embrace Blockchain and inspire adoption, the global bank is inviting South Korean banks to form a joint partnership with HSBC ahead of the launch in the “near future”.
HSBC’s innovation director, Joshua Kroeker, made this offer to local South Korean banks during a press conference in Seoul on Tuesday.
Introducing The Voltron Platform
The HSBC platform, that is set to be unveiled once the various South Korean banks respond to the invitation to enter into a joint partnership, is dubbed as Voltron platform.
The Blockchain system is in its pilot stage and HSBC Korea wishes to forge ties to exploit the new solution to the fullest according to Joshua Kroeker- HSBC’s innovation director on Blockchain.
Voltron Platform is ideal for banks as it offers settling and processing of trade invoices efficiently. It is, therefore, suitable for real-time international trade and other business endeavors that clients depend on banks to authorize fund transfers or receipts.
Background Of The Platform
The development of the Voltron Blockchain platform started with a goal of resolving an issue with the bureaucratic processing of paper-based letters of credit that exporters require from importers. Normally, the filling of these papers takes about 5 to 10 or even 30 business days to process trade papers. This shortcoming slows down business and results in increased cost of doing business to all stakeholders in the supply chain.
Additionally, the involvement of shipping companies and banks means that the transactions are lengthy. Hence, HSBC designed a system of Distributed Ledgers to provide a solution.
Voltron platform is built within the R3 blockchain consortium that is deemed as suitable to this service by HSBC.
Benefits Of Blockchain Technology Are Immense
A Decentralized Ledger System that Voltron is offering will enable traders to trade in a record time of 24 hours as letters of credit processing and settlement will be facilitated in a public platform that can be accessed by all parties in the trade chain.
Further, since the traditional friction will be removed, there will be rapid trade financing that importers and exporters have been looking forward to.
As per Kroeker’s point of view, the impact of Voltron platform on transparency and time will enable companies to manage there working capital and cash flow better.
HSBC Will Not Own The Platform
In terms of cooperation, HSBC will cease to own Voltron Platform as the ownership rights will be transferred to all the members of the partnership who will also govern it. As a permissioned Blockchain, third parties will be denied access to on-platform data.
As a jointly owned platform, the ecosystem will link all the banks and enable easy and useful sharing of costs.
At this time, the partnership has 7 members including Standard Chartered, NatWest, SEB, CTBC Holding, ING, Bangkok Bank, and BNP Paribas.
It is also important to note that the security of the platform is guaranteed by the HSBC team behind the project.