Blockchain assists middle and small-sized banks make a breakthrough from the blind corner; the supply chain finance is the accelerator

On July 6, the Application of Block Chain Technology in Supply Chain Finance and Trade Financing forum was held at Shenzhen Ping An International Finance Center by Internet Finance Association of Small and Medium - sized Banks, Ping An Blockchain Research Institute and OneConnect. Senior leaders of nearly 20 banks and institutions and academic experts in fintech field attended the forum, and carried out lively and deep discussion about the application of blockchain technology regarding the implementations in scenarios of financial industry and mode reform of traditional businesses.

The whole industry acknowledged that the application of blockchain finance is most prospective. The characteristics of the blockchain technology, such as the digital consensus, tamper resistance and decentralization, empower it with the huge potential to change basic finance services. In this year, OneConnect established Ping An Blockchain Research Institute relying on abundant educational resources of Tsinghua University and Shanghai Jiao Tong University. The Research Institute researches and develops the blockchain technology and explored its application scenarios in the financial industry together with governmental institutions, middle and small-sized banks and enterprises and public institutions, based on the “industry-university-research cooperation” system. This forum gathered top scholars of the blockchain field and industrial experts who carried out professional discussions about the application scenario of blockchain in the financial industry, which attracted the leadership of tens of banks.

At the forum, Ye Wangchun, President and CEO of OneConnect, Executive Vice President and Secretary General of Internet Finance Association of Small and Medium-Sized Banks, pointed out that “along with the continuous improvement of supervision standard, industrial standard and technology maturity of the blockchain, the industrial foam of blockchain will gradually disappear and step into the new stage closely integrating with the real economy. OneConnect, a representative fintech company, has applied the blockchain technology in the practical commercial scenarios involving various fields of six major ecosystems, separately finance, real estate, vehicle, healthcare, infrastructure and environmental protection.” Huang Yuxiang, Chief Technology Officer and Chief Operation Officer of OneConnect and Director of Internet Finance Association of Small and Medium-Sized Banks Fintech Committee, expressed that the construction of blockchain ecosystem needed the joint participation of various parties to well design the application scenario and commercial mode for all participating parties from the aspects of connection, affiliation, value, location, benefit and security. The leaders of various banks showed high appreciation and acknowledgment to the blockchain technology of OneConnect repeatedly at the seminar. As for them, the application prospect of blockchain technology in the finance industry will be huge. In fact, the insight of bankers has been gradually realized. Along with the development and maturity of the blockchain technology, the blockchain technology has been applied in various fields of the financial industry, such as the inter-bank asset trading, middle and small-sized enterprise loan and cross-border payment. “The essence of the blockchain is the distributed billing database, which can establish the decentralized trust mechanism to make all parties participating in the blockchain enjoy equivalent rights and obligations. Characteristics, such as decentralization, openness, transparency and full traceability, enable the blockchain certainly bring the reform of transaction flow and commercial relationship to our society”, pointed out by Huang Zhangkai, the Associate Professor of Finance Department of School of Economics and Management of Tsinghua University based on his observation and analysis on the financial industry at home and abroad for years. The development of blockchain technology in the finance field is rapid, among numerous application scenarios, the supply chain finance field has attracted much attention with fast commercial development progress. Break through the supply chain finance, solve industrial difficulties In recent years, the development of the supply chain finance has been like a raging fire. According to statistics, it is predicated that by 2020, the market size of the supply chain finance at home will exceed RMB 18,000 billion, since the industrial development space is huge. Along with numerous financing institutions have emerged in recent years, the third-party payment company, online lending platform and ITFIN all try to capture the monopoly position of banks. The competitive situation in the supply chain finance market is moreand more fierce. Middle and small-sized banks are difficult to seize the share in the new finance market and supply chain finance market, due to old-fashioned and simple products, lack of innovative capacity, slow product update and short of platform construction ability. “Along with the scale expands, the limitation of traditional supply chain finance mode is more and more obvious. On the one hand, the information asymmetry, opacity, easy to tamper, high risk and other traditional difficulties exist; on the other hand, the coordination mode of traditional supply chain finance which relies on the single core enterprise can’t meet the Internet's multi-level and platform-oriented development demands any more.” Zhuang Haiyan, Senior Business Director of Supply Chain Finance of OneConnect introduced that OneConnect have introduced blockchain and other leading technologies to audit risk control and manage data of relevant enterprises of the supply chain. The new mode of bloc chain + supply chain finance will reshape products of the supply chain and bring the new round of reform. The supply chain technology created by OneConnect blockchain has three advantages shown below. The first is that the electronic certificate created relying on blockchain, under the openness, transparency and witness by multiple parties, can be flexibly split and transferred. Thus, strong credit during the whole supply chain becomes conductive and penetrable, but not rest on Grade I upstream and downstream enterprises around core enterprises. From the “point” of traditional credit and loan, to the “line” of supply chain finance, and until the “face” of blockchain + supply chain finance, the gradual upgrade is realized, by which, the channel for customer acquisition is expanded, and financing clients of the supply chain finance grow exponentially. The second is that the creditability mechanism created by the blockchain technology inserts control points from the starting point of the supply chain transaction scenario, adds timestamp on original transaction data using traceability and decentralization of the blockchain, further solve the credit crisis. The user can 100% trust data obtained using the blockchain technology. The third is that upon the blockchain technology of OneConnect is applied in the supply chain finance product, the grade of risk control is promoted. OneConnect product adopting the block chain technology will check the authenticity of data source before loaning and check the transaction history, track after the loan, and alarm in advance in case the participator may finance repeatedly. The blockchain technology will bring the supply chain finance to a higher security level.

At the seminar themed on “fintech assists middle and small-sized banks make a breakthrough from the blind corner”, Lu Yifan, Senior Director of Block Chain Team and Principal of Block Chain R & D Department of OneConnect, focused on the breakthrough of core technologies of FiMAX, the company’s blockchain solution. He expressed that through innovative research and development, the high-performance bottom framework of FiMAX Core owns the excellent efficiency far superior than all code software and hardware schemes both at home and abroad and can effectively solve efficiency problems of the blockchain. It makes the blockchain realize the high performance handling capacity under the common hardware configuration when being applied in the supply chain finance and be free from performance obstacles even under multiple concurrent high-frequency trading. The blockchain middleware of FiMAX Sparrow is the most complete privacy protection system provided by OneConnect based on the leading encryption technology, which can effectively solve problems regarding multiple data privacy protection and data verification of the supply chain. The management platform of FiMAX Concord simplifies the institution’s management threshold to the internet and node, provides the institution manager with the single-click deployment, initialization management page and other operations and tools docking with the corresponding network, which helps the client deploy by single click and launch on the supply chain rapidly. OneConnect guarantees the strong consistency of the supply chain finance background, prevents disputes, financing from multiple sources, re-use of certificates and other financing difficulties by applying the leading blockchain technology to link with core enterprises, suppliers, dealers, logistics storage providers and bank institutions. At the forum, Zhang Yan, Principal of Supply Chain Finance Department of Zhongyuan Bank, thought that the supply chain finance platform established relying on the blockchain technology by OneConnect was advanced, which could provide suitable technology and scenario services for the development of supply chain business pf middle and small-sized banks. As the first enterprise developing and applying the blockchain technology, OneConnect has explored in 14 relevant scenarios and fields, such as finance, healthcare, customs, trade, real estate and vehicle, among which, scenarios-related to the finance include payment, liquidation and settlement, asset transaction, loan and supply chain finance. On February 6, OneConnect launched its blockbuster in Shanghai - blockchain platform FiMAX. Due to its excellent performance, privacy protection characteristic and abundant application scenarios, FiMAX was well received by the market and clients. At the conference, tens of institutions signed the Memorandum of Cooperation with OneConnect. In addition, in the blockchain field, Ping An Insurance Group, parent company of OneConnect has applied 87 blockchain patents both at home and abroad. It is reported that OneConnect participated in many construction projects of several international trade financing platforms. Through the world leading blockchain technology, the transparency and convenience of international trade and trade financing are strengthened, and trade fraud and repeated financing are prevented. In the future, OneConnect will establish the “direct linkage” between domestic middle and small-sized banks and international leading trade financing platforms, in order to realize the transformation and upgrade and value increment of middle and small-sized banks based on technology upgrade and business development, further make middle and small-sized banks the accelerator for breakthroughs.

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