Last week IBM announced they were selected by the European Digital Trade Chain Consortium, to build and host a new trade Financial platform based on IBM’s Blockchain, powered by Hyperledger Fabric.
The Platform is designed to simplify and facilitate domestic and cross-border trade for small and medium enterprises (SME’s) in Europe, while helping to increase overall trade transaction transparency.
Composed of Europe’s seven largest banks, the Consortium consists of Deutsche Bank, HSBC, KBC, Natixis, Robobank, Societe Generale, and Unicredit.
The Consortium indicated they selected IBM “to make the Digital Trade Chain network a reality, and enable the Consortium of Banks to potentially serve thousands of their SME banking clients”. Essentially we are “looking for a new platform for small and medium businesses in Europe that can enable them for faster, easier and cheaper trade transactions”
The Consortium is looking to close the gap of a traditionally underserved market segment, made up of SME’s, to help them open new revenue streams, initiate new trading relationships and stimulate trade growth.
IBM intends to build the Digital Trade Chain network on Hyperledger Fabric v1.0.0, an open source Blockchain framework, and one of the five Hyperledger projects hosted by the Linux Foundation, and hosted on the IBM Cloud.
I'm a newbie and I'm not across the specifics so excuse my ignorance but isn't this what Ripple is trying to do as well, just using another protocol? I find it really interesting to observe the different plays of the Financial Services and technology companies to position well for the inevitable future. In my opinion though, the banks really need to consider their value proposition to SMEs going forward. I'm not sure if it is in providing these semi-centralised platforms, but rather to go back to their roots and focus on providing 'safe' local liquidity (i.e. loans) to SMEs.
Yes, you are correct. This is precisely the same territory that Ripple is going after. However, rather than being left in the dust IBM has been proactive and wasted no time in adding a Division to their Company exclusively devoted to Blockchain Solutions. Rest assured though IBM's award of this contract did not go unnoticed by other major players (i.e. Oracle, SAP, etc.), and we will see announcements from them as well in the not too distant future. Stated differently, if these other players do not become heavily proactive with Blockchain technology solutions very quickly, they will be like so many other companies that went belly-up, as a result of them wearing blinders to new disruptive technology staring at them in their face.
Ha, in the case of banks, belly up might be a bold statement! But without a doubt this is very disruptive for their current business model and they have to adapt to it. My expectation is that if the banks can put something in place for SMEs soon(ish) that offers functionality in terms of transparency and fee reduction similar to Ripple - maintaining speed of execution and settlement of course - then current customers might not be inclined to change platforms simply because Ripple is a decentralised model. Now, this is assuming that the SMEs are not operating across many borders since this would change that equation. But I'm just trying to think from a customers perspective here where I believe they would be willing to pay a little bit of a premium for no hassle and perceived safety. Now, for new customers, this is obviously a whole different question but in the case of banks retention is (and should be) their top priority in my opinion.
Excellent points! Focusing on Banks using this as a means & method to retain it's current customers is an excellent observation, especially in a world where Financial Institutions are faced with competition and disruption associated with Cryptocurrency. With regard to my comment of going "belly-up" it was in reference to behemoth (and possibly slow-moving) companies who currently provide Computer & Database Solutions (IBM, Oracle, SAP), not Big Banks.
IBM could make the space explode! If you ever wanna talk crypto hit me up @jhcooper7
I could not agree more. Thanks for the Invite - - I will take you up on your invitation in the not too distant future.
good