Computing giant IBM Corp. yet again expanded its reach into finance blockchain technology today with the announcement that the company’s trade finance platform collaboration with UBS AG has been joined by Bank of Montreal, CaixaBank S.A., Commerzbank AG and Erste Group Bank AG.

With the use of distributed ledger technology, the platform, named Batavia, is designed to be openly accessed by organizations of all sizes and support trade finance for transactions across all types of trade for goods being transported by air, land or sea.

The collaboration that became Batavia began in 2016 initiated by UBS and IBM is built on the Hyperledger Fabric Blockchain Framework. That framework powers the IBM Blockchain network, an enterprise-grade distributed ledger technology service offered by IBM that can support projects of any scale. IBM and its five collaborating banks intend to work closely with experts from the transportation industry to build out a commercial product.

“Today, the process of securing and financing trade is highly cumbersome for corporates,” said Beat Bannwart, head strategic innovation and market development at UBS. Bannwart added that the use of blockchain technology is expected to “innovate their user experience” and would provide “a simple, digital and automated way of arranging, securing and financing their international trade transactions by leveraging new technology and creating an open ecosystem.”

Batavia is targeted for pilot transactions with customers on the network in early 2018 to test and refine the platform.

The objective of the platform is to provide a blockchain-based framework for finance trade institutions to build multiparty, cross-border trading networks worldwide. With Batavia, member organizations will be able to track the progress of a shipment as it leaves the originating warehouse, gets loaded onto a plane or boat or truck and arrives at the receiving port. With each incremental milestone of that transport the blockchain would be updated to reflect its progress.

In this fashion, IBM’s collaboration mimics a trend in the trade industry with blockchains being inspected as a potential technology to help reduce costs related to tracking shipments and also increase documentation accuracy.

In August, IBM partnered with Singaporean shipping giants – shipping company Pacific International Lines Pte Ltd. and port operator PSA International Pte Ltd. — to build a trial blockchain that would ease paperwork for supply-chain tracking. Also in August, IBM announced a specialized blockchain designed to assist food distributors and retailers with increasing accuracy for tracking perishable goods in order to increase food safety.

This year, Samsung Electronics Co. Ltd. also began to build out a major blockchain network with Korea’s shipping logistics industry using similar technology. And Marine Transport International USA LLC collaborated with Agility Sciences Ltd. to develop a blockchain tracking network designed to enhance shipping security and accuracy in the wake of breaches of port cybersecurity.

Those examples all involve the nuts-and-bolts logistics and paperwork of shipping from companies on the ground attempting to keep track of moving parts such as shipping containers or increase visibility into a multiparty distribution network in order to track contamination in the case of food.

With Batavia, IBM and the collaborating banks expect to use blockchain technology to reduce the amount of paper-based documentation used to securely conduct trade transactions. Legacy processes using paperwork can take weeks, incur great costs and open transactions to potential vulnerabilities such as theft, tampering and counterfeiting. Ideally, IBM’s new blockchain platform will help speed the submission and comparison of documents, secure the collection and archiving of transactions and increase trust across the entire network.

Jordi Fontanals, chief operating officer at CaixaBank, said in a statement that financial institutions could use this technology to better streamline the documentation, tracking and financing of trade operations similarly.

“Harnessing blockchain technology offers enormous potential for driving digitization,” Fontanals said, “but more importantly it paves the way for international projects in collaboration with multiple partners, with these being created and designed to serve our customers.”

These cases have shown the power and capability of blockchain networks to allow for collaboration between multiple, distinctly separate but collaborating parties in supply chains. The technology can do this by allowing each collaborator to maintain their own private information on the blockchain that can be publicly verified by partners without revealing proprietary information.

Fabio Keller, IBM project lead, noted IBM’s own work with hundreds of clients to implement similar blockchains. Financing global trade has emerged as a use case that could see notable benefits.

“Targeting the creation of large, global, multi-modal networks that bring transparency and trust to each step of the trade process,” Keller said, “is what makes Batavia a platform with so much potential to transform the way companies around the world do business with one another.”

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