A bold initiative aimed at developing blockchain tech to revolutionize finance transactions led by IBM and USB is being supplemented by additional Banks. CaixaBank, Commerzbank, the Erste Group and the Bank of Montreal have opted to collaborate with IBM and USB to develop Batavia, a platform which the banks and firms hope to use to further automate and optimize financial trading processes.

Batavia will reportedly allow companies which employ it to track their transactions as they take place around the globe. It will also further automate the payment processes used in such transactions, which as of now remain largely paper-based and require human employees.

“Traditionally, trading partners…have relied on large volumes of paper-based documentation to securely conduct trade transactions…the Batavia platform will eliminate the necessity to handle and compare documents, allowing buyers, sellers, and their banks to execute transactions with a high degree of efficiency and transparency,” Part of IBM’s announcement read.

Rather than relying on each party to keep their own records, then, the Batavia platform will allow the banks to share records to avoid costly mistakes or miscommunication during decision-making processes. Blockchain technology is often used to seamlessly transfer encrypted data among a number of parties and will allow such a large number of banks as those investing in IBM’s initiative to work in tandem without getting in one another’s way.

IBM and USB’s initiative, which was launched in 2016, plans to start testing the new technology as early as 2018. The companies will likely move shortly after successful testing towards commercializing the platform. “We will secure the support of the trade community as the project progresses,” Beat Bannwart, the UBS executive overseeing the venture, said, according to the Financial Times.

“What we want to avoid is a fragmentation of the market, because if that happens clients won’t use it.”

Blockchain technology

Blockchain tech was chosen for the project because of its distinct encrypted nature, and due to the fact that it’s increasingly being adopted by banks hoping to heighten security measures while offering small business financing.

While blockchain was originally developed for cryptocurrencies, it’s recently been enjoying a growth in support and is slated to be used in 15% of top global banks in 2017, per Reuters.

IBM’s Batavia initiative isn’t the only place where the company is investing heavily in the blockchain, either. The company recently enlisted the help of major food companies to improve food safety through blockchain tech as well, according to The Motley Fool. Press releases by the company also show how it's collaborating with others to apply blockchain solutions to cross-border shipping challenges.

Ongoing collaboration

IBM’s announcement made it clear that the company sees collaboration with banks and other businesses as a way to grow revenue without sacrificing its own secrets.

“When all participants in a transaction can access a shared version of the truth, they can interact with greater trust, building larger and more distributed networks, and in turn, growing revenue,” the company’s announcement concluded.