Blockchain, la révolution - AFTE la... · •Emmanuel Lemoine, director head of structured export finance, ING • Ignacio Sanchez-Miret, président de la commission AFTE « fintech

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Blockchain, la révolution ?

#JAFTE2018 ConnexMe : AFTE2018

Nos animateurs et intervenants• Emmanuel Lemoine, director head of structured export finance, ING• Ignacio Sanchez-Miret, président de la commission AFTE « fintech »

• Olivier Paul, head of Policy, Banking Commission, Chambre de Commerce InternationalEn charge de la mise en place de standards bancaires internationaux, avec un focus sur le financement du commerce international.La Chambre de commerce internationale (ICC) est l’organisation mondiale des entreprises. Elle est le porte-parole de la communauté économique pour s’exprimer au nom de tous les secteurs et de toutes les régions en fédérant les entreprises dans plus de 120 pays. Elle joue un rôle de leader dans l’élaboration des règles du commerce international et dans la diffusion de bonnes pratiques.

• Estelle Roiena, senior associate, business development, R3Responsable business développement France – en charge de la stratégie de développement de l’écosystème français.R3 est une société de logiciel blockchain soutenue par une alliance collaborative de plus de 200 institutions financières, régulateurs, associations professionnelles, entreprises, développant sur Corda, une plateforme blockchain conçue spécifiquement pour les entreprises. R3 est une société de 200 employés, avec des bureaux à Londres, New York, Singapour, ainsi qu’au Canada, en Australie, au Japon, au Brésil et en Inde.

• Robert Serpollet, global head of trade operations, Louis Dreyfus CompanyEn charge de la gestion des transactions physiques et dérivées et notamment des flux internationaux, et également en charge de l’innovation technologique appliquée à la supply chain.Louis Dreyfus Company : un acteur majeur de l’agri business dans le monde ayant comme activité principale le trading et la transformation de différentes matières agricoles, une société de 17,000 employés et une présence dans 100 pays.


Intro: What is DLT /blockchain?Registre version - 2.0 Registre version - 1.0 Registre version 2.0


What is DLT / blockchain ?

Customer

This is what I think I owe

Supplier

This is what I thinkI am owed

CustomerSupplier

We both see the same thing

TOMORROW WITH DLTTODAY

• Distributed Ledger Technology (DLT): decentralized data base (public or private) managed by various participants without central authority

⇒Provides greater transparency and makes fraud more difficult

• Blockchain: a form of DLT with some specific features (data shared by means of blocks closed by a specific type of cryptographic signature)


Collaborate and maintain one single decentralized and secure database

Run software that communicates with their counterparts

Enable a near-instant update in their systems without relying on intermediaries, reconciliation, matching or manual fixes

While still managing confidentiality of client / transaction related information

DLT / Blockchain enables competing firms to

5


In practice what could be blockcain’s impact (example of agri trade finance) ?

Data driven digital solution

Single platform

Standardized terms and clauses

Automated cross validation

Secured and auditable

Seamless transfer of information

Reduction of manual interference

Real time visibility of information

CURRENT STATE FUTURE STATE WITH BLOCKCHAIN

Paper-based industry

Lack of common standards

Long processing times

Multiple reconciliations

Manual processes

Repetitive tasks

Poor audit trail

High costs


Is Blockchain the best solution for your project ?

7(1)Source: McKinsey 2016 Findings From Research Into Distributed Ledger Technology

• Answer: it depends!

• Beyond the Hype, lots of projects do not requireDLT / Blockchain

• Still for the right projects, DLT / Blockchain may addconsiderable value

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Blockchain: experience froman Agri commodities trader


The pilot transaction

• Press release: https://www.ldc.com/global/en/investors-media/press-releases/press-release-2018/louis-dreyfus-company-ing-societe-generale-and-abn-amro-complete-first-agricultural-commodity-trade-through-blockchain

• Video: https://www.youtube.com/watch?v=wW6_IoGmdJo

• Impact on working capital

https://www.ldc.com/global/en/investors-media/press-releases/press-release-2018/louis-dreyfus-company-ing-societe-generale-and-abn-amro-complete-first-agricultural-commodity-trade-through-blockchain

https://www.youtube.com/watch?v=wW6_IoGmdJo


The path to scale & adoption

• Accept that the

market will

progressively

transition from

paper to digital

(adopt an

« hybrid »

solution)

• Build a platform

based on open

standards so that

to enable

interoperability

• Be ready to

collaborate with

your competitors to

drive industry

standardization

• Select the right

use case and

ensure that there

is a benefit for

each participant

in the eco

system

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Challenges to achieve mass-scale adoption


The challenges

Technology• Technology is still maturing • Stability of the system has to be proven with scale• Security and confidentiality to be guaranteed in a production environment

Ecosystem • Pace of adoption, cultural barrier to change• Very complex to align (typically in the Agri space e.g. governmental bodies)• Potential needs to live with an « hybrid » solutions for some time (i.e. some

of the participants in a transaction are still outside of the blockchain)

Integration • No proof of « easy » interoperability• Integration with « legacy » systems is a « must »

Legal & Regulation

• Legal framework still unclear: digital documents not necessarily considered valid by banks, customs, etc.

• How will blockchain/digital ledger technologies be regulated? will there be a regulation?


Blockchain platforms in the trade world (example)Commodity

Trade FinanceTrade Finance

(L/Cs)Open Account

Trade

Other players in theecosystem (example):

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Other applications – KYC, Financing and Open account


What problems are we are trying to solve?

Financial Institutions all performing the same checks

Corporate customers send multiple documents to multiple FIs all performing the same checks

Resulting in expensive, labor-intensive and unreliable updating

Onboarding times can take as long as 2-4 months. Corporates take the most time.

KYC is an expensive and time consuming process!

Resulting in duplicative and expensive efforts


DLT / Blockchain has huge potential to drive change

16

Financial Institutions Regulators Operations Individuals

• KYC / AML

• Derivatives Clearing

• Repo Clearing

• Cross Border Payments

• Trade Reconciliations

• Margin / Collateral

• Real-Time Settlement

• KYC/ KYS

• Real-Time Settlement

• Common Ref Data

• Timestamping

• Cash management

• Fraud Identification

• OTC Life-Cycles

• Crowdfunding

• Peer-to-Peer Lending

• Virtual Identity

• Credit Scoring

• Cross Border Payments

• Vault/Escrow Services

• Customer Deposit Cost

• KYC / AML

• Regulatory Reporting

• Compliance Reporting

• Trade Reporting

• Risk Visualization

• Basel III Compliance

• Client Transparency

These four use

cases alone

could generate

$60-80bn in

cost savings1

(1)Source: McKinsey 2016 Findings From Research Into Distributed Ledger Technology

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Blockchain, la révolution - AFTE la... · •Emmanuel Lemoine, director head of structured export finance, ING • Ignacio Sanchez-Miret, président de la commission AFTE « fintech