Independent IT and business consulting firm CGI is teaming up with National Bank of Canada and blockchain technology company Skuchain on a pilot program that they say will improve and streamline the process for negotiating standby letters of credit and guarantees.
These agreements, used across many industries to secure contracts, are currently conducted via email, making them prone to errors and delays in a process that lacks transparency for beneficiaries regarding terms and approval status.
The integration will allow National Bank to provide trade finance services digitally to customers conducting business on a blockchain B2B solution. In particular, customers will be able to initiate, conduct and conclude negotiations of standby letters of credit and guarantees entirely on smart contracts that can intelligently construct agreements and securely communicate any changes in terms to relevant parties.
New blockchain-based tool effective
The result is a blockchain-based contract negotiation tool that the three parties say is effective in the standby letter of credit and guarantee process.
“This pilot project is a great opportunity to leverage blockchain technology to simplify the process for negotiating standby letters of credit and guarantees while making it more transparent and secure,” said Patrice Roy, vice president, Payments, Cash Management and International Solutions at National Bank. “This will enable us to offer a simple, fast and efficient experience to our commercial clients, which facilitates managing their business.”