The bank introduced a blockchain-based platform to facilitate trade with other businesses in Europe for SMEs. The we.trade platform is accessible to all Nordea SME clients, with trading governed by a series of regulations intended to ensure system safety.
Trading parties are permitted to choose which occurrences will cause payments, while agreements can be written in various languages. The platform is supposed to assist tackle confidence shortfalls in present SME cross-border trades.
Patrik Zekkar, Global Head of Trade Finance and Working Capital Management at Nordea, elaborated as follows:
“Almost 60 percent of the SME’s said that they have to make advance payments so there is obviously a sense of insecurity surrounding cross-border trade. This is unfortunate, not only from a liquidity stand point, it may also lead to companies refraining from trading and not growing.”
Customers can pick certain occurrences within a smart contract via the we.trade platform, triggering a credit to another party. We.trade is an outcome of joint effort of 12 various banks including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Santander, Société Générale and UniCredit, based on the IBM Blockchain based platform.
Nordea claims it takes on a unique position by establishing an environment for buyer and supplier and collaborates with clients as soon the order is placed and not just at the time of making payment.
Regarding the benefits of We.trade platform, Magnus Montan, head, business banking, Nordea, said: “We see more and more small and medium sized companies getting involved in cross border trading. There are some common challenges that they face. The biggest one is related to trust in their overseas trading partners. we.trade is not only about providing trade finance, it is something much bigger than that. It is about enabling trade and with we.trade we are creating an ecosystem for the global trade, where trust is an integral part.”
We.trade started live services in June 2018. In 2017, Nordea entered the endeavor and in April launched the platform for chosen clients. Nordea is a significant private bank in the Nordic zone. At the end of 2016, the company had a total market cap of over €32.4 billion, with net income of € 3.7 billion. While Nordea embraces blockchain technology, it has a hard view on cryptocurrencies.
In January 2018, the company prohibited staff from possessing bitcoin (BTC). Following the announcement of prohibition, Danish finance and employees’ rights leaders warned litigation proceedings. The bank also closed down Norwegian cryptocurrency exchange Bitmynt AS in December 2017. Bitmynt’s founder lcase against odged Nordea, but lost in May 2018.