OCBC has disclosed that the bank is set to digitize operations in the trade finance sector in order to reduce the use of paper, according to Bloomberg.
The business media outlet reported that Ng Chuey Peng, Managing Director and Head of Global Commodities Finance at OCBC, revealed that the organization is focused on digitizing its work processes in the trade finance sector.
Ng explained that these processes are highly dependent on paper documents to prove ownership, existence, and payment of products and services. However, paper documents are subject to forgery and fraud. Case in point, Citi and Standard Chartered in 2014 faced significant losses in relation to forged warehouse receipts for metal at a Chinese port.
To combat this potential threat to the banking industry, Ng revealed that OCBC is carrying out a project that will “leverage technology in order to reduce the use of paper in commodities trade finance,” in a move to expand the bank’s trade finance business. Moreover, OCBC is set to form a team dedicated to this initiative within the year.
Ng added, “Blockchain, Komgo, Forcefield, Vakt, one of these will have to work to change how trade is being done. It’s a matter of time. When, I can’t tell, but I think it has to go paperless.”
Meanwhile in Hong Kong, a blockchain-powered trade finance platform, eTradeConnect, was introduced in the banking industry with the aim of digitizing financial documents, allowing all stakeholders to share data in real-time. The move is expected to make financial transactions more transparent and eliminate document forgery.
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