By Nayela Deeba
Aug. 24, 2016
A group of organisations have developed an app to change the dynamics of business trading around the world, typically those which involve Letter of Credit (LC).
Bank of America, HSBC and Infocomm Development Authority of Singapore (IDA) built a prototype solution using Blockchain technology in a joint partnership, IDA announced in a press release on 10 August 2016.
According to the release, A Letter of Credit is an approval letter given to a seller by the bank to prove that they have shipped out goods which belong to the buyer once payment has been received. This process is usually time consuming and labour intensive.
The consortium made use of Linux Foundation open source Hyperledger Project blockchain fabric to develop the app. This allows the exporter, importer and both of their banks to visualise data in real time on a tablet and receive guidance on what to do next. Each action in the workflow is captured in a permissioned distributed ledger, giving transparency to authorised participants whilst encrypting confidential data.
According to IDA's press release, the proof-of-concept for the app showed potential to streamline manual processing of documents which are received or sent out by companies. It has also improved security and made it more convenient for companies to interact with each other on mobile.
Following positive results, the consortium now plans to conduct further testing on the concept's commercial application with selected partners such as corporates and shippers.