The Spanish BBVA works with financial technology company Wave on the first pilot using blockchain to automate the electronic submission of documents.
BBVA, a large Spanish bank, has reportedly worked with financial technology company Wave on the first pilot using blockchain to automate the electronic submission of documents in an import-export transaction between Europe and Latin America.
The trial was run on a transaction between Mexico and Spain, as explained in a press release published by BBVA.
The payment was a sale deal between Frime, a company in Barcelona, Spain, and Pinsa Congelados, in Mazatlan, Mexico. The Spanish company bought tuna fish from the Mexican one by the help of a letter of credit, the most common payment system in international trade transactions.
Usually, such transactions are associated with a large volume of documentation, as well as manual checks and sending of physical documents. According to BBVA, this may lead to errors, while taking up to two weeks to process the documents.
“The time it takes to manage the documentation was reduced to a process that lasted just a few hours, in which all parties (the banks, the importer and the exporter) were constantly aware of the status of the documents.“, said Patxi Fernández de Trocóniz, Head of Global Trade & International Banking.
The test was conducted by the use of Wave`s system. The processing time was estimated to take 2.5 hours. The traditional method is said to take 7-10 days. Delving into the specifics, BBVA explains how many intermediaries take part in the process:
1. Shipping company
3. Exporting bank
4. Importing bank
To sum it up, the bank writes that Wave`s electronic submission represents a step forward when it comes to cost savings and greater efficiency. Also, the technology makes the process more transparent and reduces operational risks.
More information about the trial is available at the following link.