Digitizing Trade Finance Using Blockchain Technology Illustration of Letter of Credit Process.

This research aims to study the issues derived from the current trade finance processes, followed by evaluating the available technological solutions proposed by researchers and FinTechs. The purpose of seeking technological solutions is to replace the current obsolete processes of traditional trade finance, which rely heavily on manual monotonous labor and paperwork. In this research, the impact of blockchain technology on the Trade Finance processes is examined using three simulation models, Paper Letter of Credit, Bank Payment Obligation (BPO), and Blockchain Letter of Credit. The research findings observed a significant increase in process efficiency up to 94% while conducting processes under Blockchain Platform and 74% using BPO. Moreover, the study demonstrates how the efficiency gained from applying blockchain technology to the trade finance processes could increase productivity and significantly reduce processing costs. The research findings provided an essential awareness to banks, corporates, and governmental authorities about the importance of blockchain technology in trade finance and highlighted the need for an urgent digital transformation. Researchers can extend studies by applying proof of concept of Blockchain implementation to other trade finance processes such as Documentary Collections and Guarantees. Future work can include more parties from the entire trade ecosystem such as Shippers, Insurers, and Governmental authorities. [ABSTRACT FROM AUTHOR]