Seven European banking giants have joined to develop a shared cross-border trade finance platform for small and medium-sized companies using the power of the blockchain technology, Finextra reported.

According to the statement, the seven banks Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit have signed a Memorandum of Understanding (MoU) in Brussels. With the MoU, the partners intend to collaborate on the development of a new product Digital Trade Chain (DTC).

The product DTC aims to make it easier for trade finance procedure for small and medium – sized enterprises by solving the challenges of managing, tracking and securing domestic and international trade transactions. The project will connect all the parties involved including buyer, seller, banks of buyer and seller, transporter, among others through online and mobile devices.

The Digital Trade Chain product is based on the supply chain solution and prototype trade finance that are originated by KBC and tested to ‘Proof of Concept’ stage.

“By maintaining secure records on the DLT technology will accelerate the order-to-settlement process and decrease administrative paperwork significantly”, the group said.

The project will initially aim to focus on building critical mass in seven European markets including Belgium and Luxembourg (KBC), France (Natixis, Société Générale), Germany (Deutsche Bank, UniCredit), Italy (UniCredit), the Netherlands (Rabobank) and the UK (HSBC).

The project will also enable ‘end-to-end transparency’ that is expected to boost the SMEs’ confidence in onboarding new trade partners and therefore grow trade across the European continent.