Etisalat Digital announced on their LinkedIn page that they have signed up 8 major banks in the UAE to develop the new blockchain based trade finance solution, what is dubbed UAE Trade Connect.
As mentioned on the page,” Our team along with the banks will be working together to further develop and extend the solution to other areas of trade finance. This new solution, which is open for all UAE banks to join, will help to digitize trade finance processes and combat fraud supporting the UAE’s trading companies.”
The banks that have signed include First Abu Dhabi Bank (FAB), RAKBANK, Emirates NBD, Commercial Bank of Dubai, National Bank of Fujairah, Mashreq Bank, ADIB – Abu Dhabi Islamic Bank, and Commercial Bank International. Two other banks will be signing up soon according to UNLOCK sources.
The UAE Trade Connect is a nationwide trade finance platform to help banks address the risks of double financing and fraud. In a GTR piece taken from GTR event, it was noted that the platform was being developed by Etisalat and Avanza Innovations together with First Abu Dhabi Bank. UAE Trade connect will validate trade transactions and whether these transactions have already been financed through another banks enhancing the process that is currently inefficient.
Waqas Mirza, Chief Executive Officer, Avanza Innovations told UNLOCK, “ The platform is leveraging Hyperledger Fabric Blockchain, Artificial Intelligence, BOTs and OCR Technology. The UAE Trade Connect project will be excellent start for growing the digital invoicing landscape in the UAE. Banks who don’t sign on will be more at risk to fraudsters. Information is run through fraud investigation engine, which performs duplicate and fraudulent invoice checks. It does so by deploying AI to detect data on the invoice, checking it against other invoices and external sources.”
In the future it is expected that not only more banks will come onboard but also governmental regulatory bodies within the UAE and traders.
First Abu Dhabi Bank initiated the project along with Etisalat in 2017. Mr. Manoj Menon, Head of Global Transaction Banking at FAB, stated during GTR MENA 2019 event, “There has been a lot of frauds happening within the banking sector, where duplicate invoices have been financed. The challenge for the banks is to detect this fraud. This has resulted in some of the banks exiting some client segments. SME financing, in particular, has been impacted, and thereby the growth of the UAE economy is being hampered.”
Speaking on the same panel, Miguel Villalonga, vice-president of cloud and data at Etisalat Digital, stated, “Security has been “at the heart of the design of the solution from a platform, operations and technical point of view” and will be one of the main themes to be reviewed during the pilots. The banks submit the data using a blockchain node within the bank, or we can host the blockchain node within Etisalat. The data is going to be residing in the node. Banks are only going to be sharing the information that is strictly required for the fraud investigation engine, and that information will be residing in a highly encrypted form in Etisalat cloud services.”
UNLOCK has directly reached out to FAB and Etisalat Digital for more information on the recent announcement and the piece will be updated as per their responses.