IBM, a global information technology (IT) company, will open a block-chain-based trade finance era with 14 banks in Europe. Generally, when a company applies for a loan on the basis of an export contract, the bank borrows money for purchasing raw materials at low interest rates based on corporate credit ratings and contract information. The strength of this process is that it can prevent fraud or fraudulent transactions because it cannot be tampered with and the information of corporate credit ratings can be verified by a number of foreign banks.

IBM has unveiled its 'We. TRADE', a block-chain network for trade finance(a joint venture between major European banks) through IBM Think 2019, an annual technology conference held in San Francisco, US on Dec. 12. The network includes Caixabank, Deutsche Bank, Erste Group, HSBC, KBC Bank, Natixis, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit. Earlier We.Trade was launched as an independent corporation in March of last year, starting with seven banks joining the block chain consortium for international trade in 2017. With the recent expansion of European banks in cooperation with IBM, 70 percent of all SMEs in Europe have access to trade finance that was previously unavailable.

According to Roberto Manconi(chief operating officer at (We.Trade) , The European banks that have been competing with each other are gathering strength to overcome the complexity of trade finance. In Roberto Manconi’s opinion, block-chain platform is based on the cloud and is not limited to network-established banks, however, it can be used by other banks.