Lloyds Banking Group (NYSE:LYG) has become the first commercial bank partner with blockchain Platform Komgo. The bank seeks to enhance and streamline its international banking division through the distributed ledger technology.
Streamlining international business
On Wednesday FStech reported that the bank had indicated that it would use the Komgo to streamline international commodity trade finance. Lloyds Bank is among the leading clearing banks in the United Kingdom. The Komgo platform enables fast and automatic data exchange and other documents across a range of solutions in a digitally secure and decentralized manner. Documents can range from letters of credit to KYC management and receivables discounting.
Komgo’s platform depends on DTL to optimize the financial process as well as enhance efficiencies, thus reducing cash flow cycles. Also, the platform can prevent risks of fraud as it lets users monitor the progress of the operation in real-time. This offers greater certainty and boosts visibility for all parties, thus enabling planning.
So far the platform has the backing of 15 banks and commodity investors including ABM Amro, ING as well as oil giant Shell. The Komgo platform is available not only to commodities business but also to interested parties in other industries and sectors.
Solving the onerous international trading process
Lloyds Bank managing director and head of global trade, Gwynne Master indicated that the processes of doing international business currently is time-consuming and cumbersome. He says that the process of trading a single commodity typically takes up to 100 days and involves several players a lot of paperwork and it is risky.
Master added that for their commodity clients trading is usually onerous, especially for a segment where quick turnaround times are vital. The managing director said that the Komgo partnership would enhance the trading process for corporate clients. He said that they are working to reduce the time their corporate customers take to trade internationally.
The Komgo platform will help in the digitization and streamlining of the process. Master praised the customer-centric approach adopted by Komgo whose focus is to address challenges of top corporates. The approach works well with Lloyds Bank’s way of working.
The Lloyds Bank global leader of trade said that blockchain technology is disrupting business today. We are in an age where blockchain is transforming collaborative business relationships, and partnerships are growingly becoming important. The solution he says will be vital in mitigation of pain points of the company’s corporate customers and will thus help British Businesses to grow internationally.
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