Use blockchain to check the truth behind lending.
【Published by: Tech News | Editor: Chen Kobe | Translator: Statecraft 】
The core business of the bank is lending, and the mission of the banker is to help the company while taking responsibility for risk management and checking the truth behind the lending behavior. This is the starting point of the story of the Japanese drama Hanzawa Naoki, and the Taiwan blockchain startup team BSOS Want to use their technology to help these bankers, let’s take a look at what they do.
In the popular Japanese drama “Hanzawa Naoki”, the main actor’s own screw factory was bankrupt because the bank was reluctant to borrow. Later, the main actor Hanzawa Naoki faced the problem of 500 million yuan bad debts caused by the private transfer between his bank supervisor and the borrowing company In the end, with his efforts, he finally recovered the assets. But he was also exiled for offending the supervisor.
Banks need to lend money to earn interest, but how to find out the credibility of borrowers is the biggest problem. Among all types of loans, the type like the screw factory of Hanzawa Naoki’s father is actually the least risky, and is also called “supply chain finance”.
In the supply chain, the core enterprise is the main body, after they place an order to the Original Equipment Manufacturer(OEM), the OEM may need a sum of money to purchase raw materials, components or hire temporary labor after receiving the order. The check ticket period ranges from 30 days to half a year. If OEM continues to take orders during this period, you may need another fund to turn around, and you will need bank assistance.
Supply chain finance with the lowest risk has become a huge pit for fraudulent loans
This type of loan, known as “supply chain finance” or “account receivable financing”, is a relatively low-risk lending business. The OEM has already handed over the goods, but is waiting for the core company’s payment Receiving accounts is the most stable short-term loan for banks. About 60 trillion TWD accounts worldwide are accounts receivable.
However, it is still possible to make mistakes during the manual review process. The most famous recent is the New Site Industries., Inc. fraud case. New Site Industries., Inc. colluded with employees of upstream and downstream companies, forged contracts, invoices and purchase documents, in order to borrow 38.6 billion NTD from 9 financial institutions. One of the key breaches flaws is the bank contact person for banknotes.
Due to the low risk of this transaction and the target of large enterprises, in the banknote process, as long as the bank contact person agrees, it can almost be released and become a vulnerable link. At this time, the blockchain technology with good confidentiality, fast information synchronization and non-tampering has become a solution that many financial institutions pay attention to.
“In the financial industry, every time information is exchanged, there is a cost of trust, and blockchain can greatly reduce the risk here,” said Daniel Huang, CEO of BSOS. In many international application cases, after the introduction of blockchain technology, enterprises take less than 48 hours to complete the loan initiation to the bank’s approval.
Taiwan ’s new blockchain startup team BSOS has worked closely with JP Morgan since its inception. It is also the official technology ambassador of JP Morgan ’s own Quorum blockchain, and they are also official partners of the R3 blockchain. Has a good strategic position.
However, in the past one or two years of development, the words blockchain startups have almost changed from popular stars to synonymous with fraud, and many companies directly rejected blockchain startups as soon as they heard them.
Despite this, BSOS not only received NT $ 20 million from National Development Fund, Executive Yuan but also the highest amount of investment in Business Angel Investment Program. Recently, they also won Cathay Pacific, Taipei Fubon Commercial Bank, and The Financial Information Service Co., LTD.3 A large customer has become a partner who introduced blockchain technology and successfully laid a guarantee for his own signboard.
Have you heard that blockchain cannot be tampered with?
The core technology of BSOS is called BridgeX, which is a total solution of enterprise blockchain. It can quickly build a blockchain collaboration platform, connect with existing internal and external systems, and provide public and private account sharing protection. Point-to-point encrypted transmission to ensure safety.
When this technology is used in supply chain finance, it makes the original tedious things simple and unbelievable. For bank inspectors, after receiving the system notification that the company has a loan requirement, as long as the platform is open, you can see all the items that need to be checked, including purchase orders, shipping orders, unified invoices, asset usage status, and third-party certification Sign off.
In this system, not only the documents are digitized, but each document is verified by the OEM and the core company. More importantly, the system is synchronized with the enterprise ERP (asset management system). How many goods are purchased and how many materials are used are automatically connected, and all the information on the platform is unique, cannot be copied or tampered with, and every action has a record to follow.
“Enterprises and banks don’t need to understand blockchain technology or research code, they can enjoy the benefits of blockchain through BridgeX, which is our main goal.”
Daniel Huang said that under the management of the blockchain, hackers want to swindle loans to pass through, there are many people who have to connect, it is not allowed to have only a single bank contact person to handle finances, and it is impossible to use the same document to repeat loaning.
The rapid development of blockchain in the past three years is undeniably from the development of cryptocurrency, but the side effects are not small. Many people equate blockchain with fraudulent money and ignore the technical advantages. Although many companies gradually started to introduce blockchains last year, another problem is that companies are not willing to share important information. When each company is “chains”, they are equivalent to a broken chain.
However, in the financial field, the advantages of blockchain for managing information and complex transactions are highly valued. At present, the three aspects of cross-bank clearing, international trade finance and supply chain finance have all begun to be applied in large numbers. Within the scope of sharing some information with each other, as long as it can improve efficiency and create value, enterprises can still accept.
BSOS also sees this clearly. Although the ideals of blockchain decentralization, freedom and transparency are very good, enterprise applications need “value”. Focusing on this is the way to survive. Regulations and corporate trust have become more mature, and Taiwan ’s startups also have the opportunity to enjoy a spotlight on this new stage.
■ Source: Tech News
■ Note: Please specify the source or references of the article for reproduced.
■ Solemn declaration: We reproduced articles and news for purpose of sharing information. Copyright belongs to the original author. If there is any infringement/error, please contact us as soon as possible, modify or delete action will be implemented immediately. Content analysis is for information purposes only and does not constitute any investment advice.
■ View Disclaimer: the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
■ Please visit our site: Statecraft for more information and the latest news update.
■ Follow Us 👉 Instagram| Facebook | Telegram | Twitter | Youtube | Linkedin | Line@
■ Business Contact： blockchain@statecraft.ltd
