NEW YORK, Oct. 5, 2021 /PRNewswire/ -- BNY Mellon has
joined a consortium working to introduce blockchain technology into
international trade finance and digitize how working capital is
provided to both suppliers and buyers across the globe.
Through its participation in the Marco Polo Network, BNY Mellon
is now able to more efficiently insert liquidity into the
international supply chain, providing supply chain finance
solutions including both payables financing and receivables
discounting to suppliers shipping goods and services to their
buyers around the world.
The Marco Polo Network is a consortium of approximately 45 banks
that provides an open software platform for trade, payments and
working capital financing to banks, corporates and other market
participants. It is a cloud-based blockchain-powered network that
allows the seamless, secure and fast exchange of trade data assets
in a multi-channel environment.
Utilizing Marco Polo, BNY Mellon will not only provide financing
to suppliers, but will also have real-time visibility into trade
finance instruments and their status, such as purchase orders and
invoices.
Real-time visibility significantly speeds up the trade finance
workflow. On the blockchain, the moment that both parties agree
that the transaction terms are correct the trade is confirmed in
real time. This means the data in trade documents are checked,
matched and confirmed by both parties near instantaneously,
enabling the faster delivery of working capital to finance the
trade by liquidity providers like BNY Mellon.
Digitization delivers particularly pronounced efficiencies for
large buyers such as big box retailers that may issue tens of
thousands of purchase orders each day and that previously had to
rely on an antiquated paper and email-based workflow to secure
trade financing.
"Blockchain has the potential to transform the trade finance
industry by replacing multiple systems with a single shared record
through one distributed ledger. As all participants in the
transaction will be immediately updated of each development in the
trade lifecycle, this enables us to extend working capital more
quickly and more securely to clients," says Joon Kim, Global Head of Trade Finance Product
& Portfolio Management in BNY Mellon Treasury Services.
Utilization of the blockchain reduces the risk that the same
trade instruments could be used to secure working capital from
multiple liquidity providers. This reduced credit risk increases
confidence and the creditworthiness of clients and may translate
into a better rate to obtain working capital.
Digitization and the multi-channel Marco Polo network also opens
up the potential for the development of a liquid secondary market
in trade finance, in which a trade instrument that is already
subject to financing can be sold to an alternative liquidity
provider consortium member, freeing up more capacity for additional
working capital to be extended.
Finally, the blockchain enables counterparties to more
seamlessly monitor whether trades align with their environmental,
social and governance (ESG) principles. The Marco Polo network
provides users with an independent view into a large number of
corporations and applies an ESG score to each company that can
enable participants to determine whether a company meets their
environmental, social and governance values.
This includes the ability to track the labor conditions for
workers within the supply chain, identify whether raw materials
were obtained from prohibited areas such as conflict zones and
monitor the carbon emissions of vehicles being used to ship
orders.
Since the Marco Polo Network operates as an open platform that
allows for connections through APIs, the network can accommodate a
wide variety of Enterprise Resource Planning (ERP) systems that
suppliers and buyers across the world may be utilizing as part of
their trade financing process.
"We are particularly pleased to be a participant in the Marco
Polo Network which will enable clients to interact with us and
access financing in an open architecture compatible with most major
ERP systems," adds Kim.
Blockchain-based trade finance is just the latest step in BNY
Mellon's drive to expedite the paper-to-digital journey and make
payments and trade more efficient for clients. Last month the firm
announced that Verizon has become the first client to rollout
Real-Time E-Bills and Payments to customers, making it the first US
corporate to extend this innovative new technology into the retail
consumer space.
ABOUT BNY MELLON
BNY Mellon is a global investments
company dedicated to helping its clients manage and service their
financial assets throughout the investment lifecycle. Whether
providing financial services for institutions, corporations or
individual investors, BNY Mellon delivers informed investment and
wealth management and investment services in 35 countries. As of
June 30, 2021, BNY Mellon had
$45.0 trillion in assets under
custody and/or administration, and $2.3
trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold,
manage, service, distribute or restructure investments. BNY Mellon
is the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Additional information is available on
www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our
newsroom at www.bnymellon.com/newsroom for the latest company
news.
Contact:
Peter Madigan
peter.madigan@bnymellon.com
+1 212 815 2308
Tony Sicoli
anthony.sicoli@bnymellon.com
+1 201 413 3198
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SOURCE BNY Mellon