After a successful soft launch in April, Nordea now makes the we.trade platform available to all our small and middle-sized business customers. The platform offers a secure venue for companies in Europe to trade with other European companies and expands our offering to SME customers.
“We see more and more small and medium sized companies getting involved in cross border trading. There are some common challenges that they face. The biggest one is related to trust in their overseas trading partners. we.trade is not only about providing trade finance, it is something much bigger than that. It is about enabling trade and with we.trade we are creating an ecosystem for the global trade, where trust is an integral part,” says Magnus Montan, head of Business Banking.
Trading over the we.trade platform simplifies the order and contract processes between buyers and sellers, Patrik Zekkar, Global Head of Trade Finance & Working Capital Management at Nordea, said. Trading is controlled through a set of rules, which adds security to the process. Flexibility is gained as the parties are offered to choose for example what events will trigger payments. An additional bonus is that the contracts can be drawn up in multiple languages.
The block-chain-based we.trade platform is constructed on the IBM Blockchain platform and has been jointly developed by twelve banks. Nordea joined the collaboration in November 2017. By building an ecosystem for the buyer and seller, Nordea takes on a completely new role and interacts with the customer as early as from the order, not just at the time of payment. We support our customers through the entire process and offer several options to secure payment.
“Almost 60 percent of the SME’s said that they have to make advance payments so there is obviously a sense of insecurity surrounding cross-border trade. This is unfortunate, not only from a liquidity standpoint, it may also lead to companies refraining from trading and not growing. We want to change how our customers do business with each other and are now building an ecosystem for it”, Patrik Zekkar said.
Customer surveys identified three primary needs that were key in the first commercial version of the platform. Event-driven payments meet the stated need for automated payments. A guarantee by the bank satisfies the need for secured payments, should the buyer lack sufficient funds. The seller may also sell the invoice to the bank and gain earlier access to payment.
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