Local tech firm VerifyUnion and partner ASB bank have made history by successfully achieving New Zealand’s first export trade using a blockchain platform. The trade took place between a Korean importer and a major Kiwi meat exporter, Greenlea.
In essence blockchain is a method of record keeping using a decentralised ledger that is hosted by all concerned parties. It significantly reduces the risk of fraud and cyber security threats as edits can only be made with the consensus of the majority of the network.
The platform developed by VerifyUnion also provides the benefit of what is known as a ‘single trade window’, meaning all the relevant documents from certificates to invoices can be exchanged using one touchpoint. It represents a major opportunity says VerifyUnion CEO AJ Smith.
“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,” says Smith.
Having a secure blockchain platform to conduct business not only significantly reduces the documentation timeframe for New Zealand exporters, it also mitigates the risks of fraud and cyber security threats, says Greenlea CFO 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 says.
CERT NZ has reported significant growth in cyber theft aimed at New Zealanders with more than $5.3 million lost in 2017 alone. The most recent quarterly report shows a 143% increase in cyber-attacks against Kiwi business.
In particular, financial services made up a high proportion of targets (69%) and the most common form of attack is hacking of email or website communications to trick people into giving up information or money (77%).
“We know that exporters are increasingly suffering from cyber-attacks. Hackers replace bank account details in documentation resulting in criminals being paid funds instead of the intended recipient,” says Verify Union’s Smith.
In order to be a successful proof of concept, the pilot trade has required the participation of the Chamber of Commerce, MPI, NZ Meat board, insurance companies, as well overseas and local banks.
ASB’s GM Global Transaction Banking Greg Beehre says the bank is committed to accelerating the progress of New Zealand’s trade environment with new technology, and being behind this country’s first bank blockchain platform delivers on that.
“ASB is helping ensure New Zealand’s export industry remains competitive through offering a 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,” Beehre says.
AJ Smith adds that there is an opportunity for New Zealand to support its existing export industry as well as position itself as a leader in cyber security products.
“It is imperative that New Zealand exporters step up their efforts in the technology space to protect the integrity of the nation’s brand and reputation of its products. 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,” says Smith.
“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.”
“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,” he concluded.