digital trade facilitation and emerging technologies · emerging technologies somnuk keretho, phd...

Digital Trade Facilitation and Emerging Technologies

Somnuk Keretho, PhDDirector, Institute of IT Innovation

Kasetsart University, Bangkoksk@ku-inova.org

Somnuk Keretho, PhD 1

ESCAP-ARTNET-ITD Trae Facilitation for Sustainable Development Workshop 2019

Bangkok, Thailand: 23 – 26 September 2019

Topics of Discussion

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Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.

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Digital Disruption / Enabling Environment

• 4G/5G Internet

• Smart Mobile Penetration

• E-Banking

• Interbank Online Payment

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• Social Media / Social App

• Digital Platform:B2B, B2C & C2C e-Commerce

2018

5สถาบันนวัตกรรมเทคโนโลยีสารสเนทศ ม.เกษตรศาสตร์

PromptPay

&

QR Code

Services

for

Interbank

Online

Payment

At any Fresh Markets around the country,MSME can receive payment online.

Thailand tops global digital rankings

Thailand ranks

• No.1 for mobile banking users

• 2nd for ownership for cryptocurrency

• 3rd in mobile commerce

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Global Digital Ranking Report 2019

FinTech

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Emerging Technology

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What is blockchain?Blockchain = a distributed “ledger” (records) of transactions

• Temper-proof/Immutable

• Decentralized control

• Highly resilient

9Somnuk Keretho, PhD

รายงานขององค์การการค้าโลก

พฤศจิกายน 2018

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Blockchain has the potential to improve global trade significantly.

But the technology alone is not enough,

other challenges (e.g. collaboration, regulations) need to be managed!

A WTO Report (November 2018)

2018

A WEF Report (January 2018)

Blockchain could help increase the global trade

by 1.1 Trillion USD within 2026

Yes,Highly Likely !

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Commercial

Financial Transport

Regulations

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Blockchain for Trade Finance could revolutionize global trade by increasing 1 trillion USD trade by 2026*

* A report during World Economic Forum 2018 (conducted by Bain & Company, and HSBC), from the base of US$ 16 trillions global trade.

2018

L/C Approval

80% faster

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As-Is vs To-be Model

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Blockchain for L/C Payment Settlement

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Bank (HSBC)

Importer(Cargill

Malaysia)

Bank (ING)

Exporter(Soybean, Argentina)electronic L/C &

electronic Bill of Lading (from Bolero network of

ocean carriers), but other regulatory documents

still in paper forms, e.g. C/O (potentially fraud)

Time reduction from 5-10 days to 24 hours

* Reference: Voltron (R3 Corda) blockchain platform for L/C Trade Finance

Payment Settlement

80%faster

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Use of L/C vs Open Account (1978 – 2013)

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L/C 20%

Open Account

80%

Somnuk Keretho, PhD

We.Trade & Marco Polo are two example blockchain platforms for Open Account Trade Finance

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SME’s could access to more finance for trade (with less risks, and better transparency of blockchain)

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A pilot project to connect Bank-to-Bank L/C Blockchain with Thai NSW (2019/2020)

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Somnuk Keretho, PhD

BC Trade Finance Thai (regulatory) NSW

Bank

Bank

Bank

BankBank

Dept of Foreign Trade (DFT)

Dept of Agriculture

Customs Dept

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.

.

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Blockchain for sea freight•

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Somnuk Keretho, PhD https://www.asiablockchainreview.com/thai-customs-to-use-maersk-ibms-tradelens-blockchain/ 18

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Blockchain for end-to-end ocean freight transactions

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Expected Benefits of Blockchain in Thai Customs

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Blockchain for Bank Guarantee

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Artificial Intelligence / Machine Learningat China Customs

• Application of automatic image recognition

• The system can detect 120 Iphones (smuggled goods)in the photo (from X-ray machines).

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Thank you for your interest

Q & A

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