By Staff Reporter
Q: Blockchain’s role in the disruption of traditional investing and innovation and change in the traditional global shipping industry?
A: Within the shipping industry blockchain has the potential to be very disruptive because it enables you to record whenever there have been changes to documentation. Within the shipping industry, which is very traditional, blockchain can be transformative. The bill of lading, which is the document that confirms receipt of cargo for shipment, has changed very little in centuries. There have been many instances of fraud, such as multiple financing on a single transaction, that could be prevented with the adoption of electronic documentation and blockchain technology. Blockchain will allow you to see the history of the BL (bill of lading), so you can check if it has been financed or not. It’s also very secure, and no revealing information is disclosed, so privacy is maintained while confirming that a BL has already been financed. This will protect financiers from fraud while maintaining privacy.
Q: The vital need for companies to gain access to alternative forms of credit
A: Companies must be able to gain access to alternative forms of credit because banks can pull the plug very fast, locking a company out of financing with traditional banks. Your sources of financing need to be diverse. Fintechs were once much smaller players, but now they are much more significant in terms of volumes. Moving forward, it’s necessary for companies to have that in their bucket to have access to financing.
Q: The importance of cross-border capacity capabilities in the context of the current crisis
A: During the pandemic, a lot of banks pulled the plug. I think having alternative access to financing was at first a good thing. A lot of players in the commodities space turned to fintechs for help. As a result of COVID-19, as well as trade wars, the supply chains started moving around a lot. Access to fintechs for financing was a way to get access to something that was faster than traditional methods. It was also easier for fintechs, depending on the models, to follow customers than it would be for a bank, which follows the traditional (and slower) banking model.
Q: The new challenges facing Fintech entrepreneurs
A: Things are moving quite a bit. Underwriters’ appetites have changed during the pandemic, shifting from one industry to another. Credit limits were reduced, some were even brought to zero. While we are in one of the industries that have boomed, we’ve still had the same issues with institutional investors that were hit by redemptions on their side and also not being sure what trade corridors they still wanted to invest in. So, what they were investing in a year ago is very different from what they were investing in the past three or four months, even. There’s a lot of changes in an industry that is traditionally looking for things that are relatively stable, in terms of data.