Etisalat Digital and the Central Bank of the UAE launched a new blockchain technology that is expected to prevent trade finance losses according to the media. UAE Trade Connect (UTC) states that the losses via duplicated invoices can be between Dh500 million to Dh1 billion.
This new blockchain technology that has been set live is expected to prevent trade finance losses of up to Dh1 billion annually. It has the ability to prevent the submission of duplicate invoices either by an attempt of fraudulence or error. UTC is a consortium of Etisalat Digital, the Central of the UAE, Avanza Innovations along with seven other banks. It will initially use the newly launched technology with artificial intelligence and more to primarily block dubious or suspicious invoices in trade finance. Furthermore, other initiatives to make the platform more secure are expected to be launched later.
The company stated that as the banks’ risk mitigation processes are activated to prevent losses, the statistics are not usually available. Even then, a small fraction of one or two percent of the financed value’s duplication or fraud in the submitted invoices can lead up to 500 million to 1 billion dirhams of potentially invalid invoices that are being presented to the UAE banks in a year.
With the launched version, the platform will be able to prevent the payment of the same invoice twice irrespective of the nature of submission through error or deliberate fraud. Singapore and Hong Kong are said to already have similar technology in use while it is the first of its kind in the Gulf region.