A trade finance transaction between the Seychelles and Ireland, via Barclays Africa, could herald a new era in financial technology.
|Africa was at the forefront of a major technology landmark this week as Barclays Africa and its UK parent company Barclays plc completed the world’s first trade finance transaction using blockchain technology.
The trade, between Ireland and the Seychelles, was based on a new technology platform developed by Wave, an innovative start-up company that went through the Barclays Accelerator programme powered by TechStars in New York last year. The bank says it could herald a new era of simpler, faster and safer trade finance.
While companies around the world are looking for ways to improve trade finance transactions using the speed and security offered by blockchain technology, this is the first time it has been achieved in a live trade. Because of the involvement of Barclays Africa, additional pilot projects involving African clients are likely as the technology is developed and adapted.
The pilot trade involved a letter of credit transaction between Seychelles Trading Company Ltd and Ornua (formerly the Irish Dairy Board), clients of Barclays Africa and Barclays UK respectively. It used the Wave technology platform to transfer the electronic Bill of Lading (“eB/L”), with the funds sent via Swift.
The Wave application allows all stakeholders on the supply chain to send, receive and track an eB/L as well as upload and send related documentation. The application is linked to a distributed ledger which securely records and verifies the ownership and authenticity of the documents. This eliminates many of the current inefficiencies in international trade.
The Global Alliance for Trade Facilitation estimates that “7% of the global value of trade is absorbed by the cost of documents alone”, which means companies around the world stand to save significant costs and time, with the shipping industry and financial institutions expected to be some of the biggest beneficiaries.
George Wilson, Head of Africa Trade Financial Institutions, says that “While trade finance is ripe for innovation, it has been a difficult area to digitise because every unique trade involves numerous parties – importers, exporters and banks at either end, shipping carriers and customs officials – and they all have to be supportive and comfortable with the technology.”
Barclays Africa project manager for the pilot, Kelly Parkhurst, said the successful Seychelles pilot trade would accelerate interest in the Wave technology.
“The Wave application is simple to use, and their team has a long term vision and strategy that sets them apart from other start-ups playing in this field,” she said.
Given the speed of technological advances and the global interest in the Wave product a full commercial rollout of the application might happen sooner than originally anticipated. The key to adoption is in an agile and highly collaborative approach, says Parkhurst.
James Scott, Head of Digital at Corporate and Investment Banking for Barclays Africa, said the successful pilot trade was an example of the technological advances taking place across Africa.
“We have been taking a leading role in helping to develop products and investigate technologies that will bring efficiencies and cost savings to Africa. This includes blockchain, which has the potential to fundamentally change the way certain businesses operate.”
“Barclays Africa was the first African bank to join the R3 Blockchain consortium, which includes some of the world’s biggest financial institutions investigating the uses of blockchain technology. We nominated our Seychelles client for this first pilot and could involve other African trade finance clients, and other banks with clients in Africa, in future tests.”
Temi Ofong, Chief Executive – Corporate and Investment Banking Africa (Excluding South Africa) and Head of Global Finance and Transactional Banking at Barclays Africa, said Africa continually provides examples of new technology leapfrogging over existing and often outdated systems.
“This technology solves a lot of issues for everyone involved in trade finance. It reduces risks such as fraud, it prevents forgeries of documents, and it eliminates a huge amount of paper work. Importantly, it saves a lot of time – typically these documents take anywhere from 2 to 10 working days to be couriered from party to party. Now it can be done electronically in hours or minutes, depending on the back end processing.”
Both Seychelles Trading Company and Ornua were excited about the change the Wave application could bring to the trade industry, CEO of Seychelles Trading Company, Veronique Laport commented that “The allure of Wave is in its simplicity. It’s easy to operate and simply reduce paper based transactions in the international trade. An industry wide roll out of such an application will greatly benefit any Company dealing with imports or exports.”
David O’Rourke, Group Trade Finance Manager at Ornua Co-operative, said: “Moving to paperless trade would be hugely beneficial in supporting the supply chain, through reduced costs, error free documentation, and fast transfer of original documents to our customers worldwide.”
Gadi Ruschin, CEO at Wave said: “Effective use of blockchain technology really can have a huge impact on the future of trade. By adopting our system, trade can be done more easily and more cheaply while providing a simple and friendly user experience without changing existing workflows.
We thank all participants for joining our live pilot and for taking the first steps towards paperless trade. Barclays has been a tremendous support in getting us to this important milestone and we look forward to engaging in more industry collaborations as the application progresses to the next stage.”
Africa gets broadband boost
ITU and Nexpedience, a supplier of proprietary point-to-multipoint broadband infrastructure, are partnering to bring broadband access to Africa.
Under the terms of the deal, Nexpedience will provide 180 new Expedience base stations worth USD 1 million, to be deployed in six nations across the continent. The first nation to benefit from the new infrastructure is Burundi, with deployments also planned for Djibouti, Burkina Faso, Mali, Rwanda and Swaziland.
Designed to withstand extreme meteorological conditions and capable of providing up to 32 kilometres of sector coverage, Nexpedience’s base stations have been specifically designed for rural deployment.
ITU’s Wireless Broadband Network in Africa project aims to develop and implement wireless broadband connectivity and applications that will provide free or low-cost digital access for schools, hospitals, and under-served populations in rural and remote areas Africa-wide.
At the signing of the agreement in Geneva, Brahima Sanou, Director of ITU’s Telecommunication Development Bureau (BDT) emphasized the need to make developing countries part of the global broadband revolution: ‚”This partnership represents another important element in ITU’s efforts to bring broadband technology to the world even in the poorest nations. I am confident that this new partnership will accelerate broadband uptake right across the African continent, bringing the power of high-speed connectivity to users everywhere, from big cities to small villages.‚”
Kiriako Vergos, CEO of Nexpedience said: ‚”Giving access to broadband technology to underserved populations in Africa is of great importance to us. There are enormous benefits to be derived from a ‚’broadband-seed’ deployment strategy, and we decided to partner with ITU because we know that the organization has the team in place to get it done.‚”
ITU Secretary-General Dr Hamadoun Tour√© said the new agreement is a ‚”major step forward in getting Africa connected‚”. Dr Tour√© led the establishment of the Broadband Commission for Digital Development in 2010, which has the aim of putting broadband at the heart of the global development agenda.
Nokia backs tech hubs for developing world
Nokia, AppCampus and infoDev are collaborating with mobile innovation hubs across Africa, Asia and Latin America to act as scouts for local talent.
Nokia, AppCampus and infoDev, a global innovation program of the World Bank, have announced a collaboration with mobile innovation hubs across Africa, Asia and Latin America – a move that will empower these hubs to act as scouts and agents for local talent, fast-tracking their access to AppCampus funding.
AppCampus was established in 2012 as a mobile application accelerator program managed by Aalto University in Finland. With an 18 million euro joint investment between Microsoft and Nokia, the aim is to foster mobile application development on Windows Phone and any other Nokia platform.
The announcement earmarks part of that investment fund for twenty six awards per annum for the best mobile innovation ideas to be made via the mobile innovation hub network, starting with infoDev’s mobile application labs in South Africa, Kenya, Armenia and Vietnam, as well as mobile application laboratories in Egypt (TIEC), Nigeria (CC Hub) and Mexico. The value of each award ranges from 20,000 Euro (US$ 26,000) to 70,000 Euro (US$ 90,000) depending on the complexity of the solution or business model behind the idea.
‚”By working jointly with the mobile innovation hubs, we are able to connect more effectively with local developers in emerging markets and provide support in terms of funding, especially for locally relevant innovations,‚” says Pekka Sivonen, Head of AppCampus. ‚”Although the criteria to access the AppCampus funding remains the same, with ideas needing to be original, competitive and scalable, the advantage is faster processing and the mentorship provided by these innovation hubs.‚”
The hubs and mLabs will be responsible for scouting talent and vetting ideas to be submitted to the global pool. infoDev’s mLabs foster regional entrepreneurship, employment and competitiveness by providing open spaces where developers can find training, mentoring, technical expertise and access to financing. In a short time, mLab-supported startups have brought over 120 commercial apps to market The best new entries from this network will compete against each other each quarter for the available awards.
‚”Nokia, working closely with infoDev, has supported the establishment and operation of a number of mLabs across emerging markets in support of local developers,‚” says Jussi Hinkkanen, vice president corporate relations for Nokia Middle East and Africa. ‚”The AppCampus collaboration showcases our commitment to strengthening the growing mLab network around the world and infoDev’s vision of supporting emerging market entrepreneurs in conquering local, regional and global markets‚”.
The official launch of the program took place during the mobile stream at the Global Forum on Innovation & Technology Entrepreneurship in East London, South Africa, organized by infoDev and the South African Department of Science & Technology. A key theme of the Forum is how innovation can lead to high-growth entrepreneurship which creates sustainable jobs. Valerie D’Costa, infoDev’s Program Manager says, ‚”The AppCampus initiative fits with the philosophy of infoDev of supporting innovative entrepreneurs from developing countries. We want to support those who can excel with some level of mentorship, skills training and seed financing. We provide potential job-creators better access to markets, which is what we are all about.‚”