According to the statistics from the International Chamber of Commerce quoted by Bloomberg, about 20% of banks in 2015 admitted a significant increase in their losses because of fraud. Standard Chartered itself suffered from fraud back in 2014, when a Singaporean company used same invoices several times, making the bank pay about $200 mln.

Because, due to confidentiality reasons, there is no platform where banks could be able to see transactions financed by other banks, unscrupulous customers can extract funds from many banks using the same invoice, according to a DBS executive Lum Yin Fong. That is why the distributed ledger technology, which makes transactions visible to the public, could hugely help.

DBS and Standard Chartered have already tested a shared ledger system named TradeSafe late in 2015 and have also been collaborating with the Singaporean Infocomm Development Authority to promote the blockchain technology.

Still, it is commonly believed that as such blockchain cannot solve the problem of frauds unless an agreement on its use is reached by a majority of financial institutions.

“There has always been a culture of competitiveness and challenges in banks working together on large-scale projects or involving more than a handful of banks… There is evidence, however, that this is changing with the current digital disruption in the industry, compelling many banks to collaborate,” Bloomberg quotes Liew Nam Soon, Ernst & Young’s Asean managing partner for financial services.

The process of negotiating common trade financing standards is compared by some with an attempt to put people speaking different languages in the same room and make them reach an agreement. Nevertheless, much effort is being applied to find a common ground both in terms of technology development and adoption (that is, in the case of R3 consortium) and building common standards to make blockchain implementation possible.

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