ASB Bank, VerifyUnion, Kiwi meat exporter Greenlea and a Korean importer have all successfully completed New Zealand's first ever export trade through a blockchain platform.
The trade, which is essentially a proof of concept, demonstrates how a secure blockchain platform can help exporters to conduct business, ensure data integrity, and remove fraud risk.
VerifyUnion developed the blockchain platform. It offers a ‘single trade window', which means all documents including certificates and invoices can be exchanged through one touchpoint.
“Currently the documentation process for exporting takes around 8 days because physical papers have to be couriered back and forth between bank and client. It also means we have to trust that the physical documents haven't been tampered with,” comments VerifyUnion CEO AJ Smith.
Blockchain can reduce that documentation timeframe for New Zealand exporters and mitigate risks such as cybersecurity threats and fraud, adds Greenlea chief financial officer Jack Vollebregt.
“We're exporting to 40 different countries and being able to use a blockchain platform removes the weak spots and ensures the integrity of the data. We also especially like the instant translation capability which will limit any misunderstandings,” Vollebregt explains.
The pilot trade also required participation from the Chamber of Commerce, Ministry of Primary Industries, the New Zealand Meat Board and insurance companies including Vero,document processing company Prodoc, as well as local and international banks.
ASB Bank general manager of global transaction banking, Greg Beehre, says that ASB is committed to using blockchain to improve the trade process for its customers.
“ASB is helping ensure New Zealand's export industry remains competitive through offering single trade window with enhanced cyber security, traceability across the whole supply chain ecosystem, and decreasing the time involved in doing international trades. It's a pretty proud day for us,” comments Beehre.
“We're exporting to 40 different countries and being able to use the ASB blockchain platform removes the weak spots and ensures the integrity of the data. We also especially like the instant translation capability which will limit any misunderstandings or human error that can come from dealing with businesses based in different countries and time zones,” Vollebregt adds.
“Plus, it offers traceability and is scalable across the whole supply chain ecosystem giving all partners in the process a competitive advantage. That was really important to us here at ASB,” Beehre says.
Smith adds that New Zealand exporters need to be more proactive about using technology to protect the country's brand and product reputation.
“When a buyer in Korea opens a carton of meat they want to know that it is genuine New Zealand beef from a cow that has grazed on our grass – not raised on an unknown factory farm,” he says.
“Part of the solution we are trying to develop is to allow customers to see when the cow was born, what farm, which feed, the kill date, and how it was transported. This is a major benefit of the blockchain system.
Smith adds that exporters are also concerned about cyber attacks and man-in-the-middle attacks.
“Hackers replace bank account details in documentation resulting in criminals being paid funds instead of the intended recipient,” Smith explains.
Prodoc CEO adds that couriers and email for 'last mile' documentation have always been sources of cost and possible fraud.
"By reducing the cost and bringing in blockchain to verify the authenticity of documentation, the trade can be facilitated faster and the trust relationship between the exporter and their customer can be improved," Cox says.
Smith adds that this is also an opportunity for New Zealand to position itself as a cybersecurity leader.
“There has been a lot of hype about blockchain technology but today we have successfully piloted a real working product that could change the way things are done all over the globe,” Smith concludes.