China’s Insurance Giant Ping An Pitches New eTradeConnect Blockchain Features For Banks
Ping An Pitches New Blockchain Features
Chinese insurance company Ping An, which is known for developing eTradeConnect blockchain, is looking to change the platform so that banks can control customer relationships. PingAn’s fintech division is managed by Frank Lu. Lu reported to CoinDesk that his team is working on a method to change the way businesses provide their data to receive financing from the network. Rather than using the central portal, they reach out individual bank.
eTradeConnect was first launched in 2017 as a proof-of-concept system by the Hong Kong Monetary Authority. In 2018, the platform formally launched and it worked to provide the trade finance market with more efficiency. A few banks participated in the program, such as HSBC, BNP Paribas, Bank of East Asia, and Standard Charter.
Bank have the opportunity to review a customer’s credentials, such as their transaction history, purchase order status, and the payments they’ve pledged as collateral. The data is then placed on a distributed network and with that, customers may be able to more easily receive financing. Lu, however, is looking to revise the system by providing banks with a higher level of control.
As Lu stated,
“Customers have a different goal. They would want more options for financing. But at the same time, big banks don’t want to become a selection button in a drop-down menu.” The trouble is that this new type of system may not be beneficial for SMEs, but that it is also “the game.”
“In my view, customers need money, and banks are the ones that whole this money. So eventually it’s a seller’s market. But the existing model has made it easier to launch the platform and or make it running steadily. The next step is migration to rid of the HKMA’s portal so that the banks will feel more comfortable introducing their customers into the network via their own platforms.”
Bank seem to be also concerned about why Ping An developed its eTradeConnect system with zero-knowledge-proof. Such as system goes against banks’ practices of sharing customer data, which may make the customer more attractive to other banks. As Lu stated,
“No banks would want to entirely share the information. That’s also why there is always a lot of talks about blockchain, but very few in actual practice.”
The benefit of zero-knowledge-proof is that they enable validation without sharing data that is commercially sensitive. And as Lu explains, such proofs are necessary for the platform to function. He noted,
“My thinking and vision for enterprise blockchain wasn’t entirely clear when I at IBM, but now I believe full encryption is the only way out for consortium blockchains.”
eTradeConnect has recently launched and it is conducting transactions. One issue that is continuously at the back of users’ minds is that how many clients will participate and how large will these clients be. Lu shared his belief that client acquisition and size of the client is certainly a concern. At this point, HSBC is interested, but it is working to ensure that the product’s technology is reliable before jumping in.