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Software giant IBM has been a leader in blockchain-based solutions targeting trade finance, launching solutions for Indian Mahindra Group in December 2016, and in partnership with Danish shipping behemoth Maersk.

Now, IBM has ventured further into this space by rolling out a blockchain-based platform for the Chinese pharmaceutical sector on Tuesday, CoinDesk reports. The new platform, the Yijian Blockchain Technology Application System, was co-developed with Chinese supply chain manager Hejia.

The platform seeks to revamp China's convoluted trade finance sector. IBM says that in China, as in other markets, small suppliers have to wait as long as 60 to 90 days to be paid for delivered goods, which hinders their access to working capital. This is due to paper-heavy transactions prone to human error and delays along the supply chain.

The platform aims to use distributed ledgers to better track goods as they're shipped and delivered; encrypt documentation more securely; and, by giving all parties equal access to the transaction record, make it easier to authenticate a transaction more quickly, thereby reducing shipment and financial transaction times. It's not yet known whether the platform will also process the payments involved in a trade. Initially, Yijian will be tested by just one pharmaceutical company, one hospital, and one bank, but it will be made available to a wider network in July. Eventually, IBM added, the platform can be adopted by industries beyond pxharmaceuticals.

IBM looks increasingly likely to emerge as the leader in the blockchain sphere for trade finance. It's grown probable that one provider will become the dominant supplier of blockchain-based solutions for particular sectors — in retail banking, catastrophe insurance, and trade finance, for example. IBM has several key advantages on its side to secure its lead in the trade finance space, including its long history of applying emerging technologies to enterprise, which affords it a strong track record that will make onboarding clients easy.

Moreover, unlike many banks experimenting with blockchain-based trade finance solutions, IBM is a neutral player un-allied to any single business, so enterprises might be more willing to adopt its platforms. Given the increasing pressure to move blockchain tech solutions out of the testing phase, we will likely see IBM consolidating its existing trade finance solutions to ensure the necessary network effect and cement its dominance.

Nearly every global bank is experimenting with blockchain technology as they try to unleash the cost savings and operational efficiencies it promises to deliver.

Banks are exploring the technology in a number of ways, including through partnerships with fintechs, membership in global consortia, and via the building of their own in-house solutions.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain in banking that outlines why and in what ways banks are exploring blockchain technology, provides details on three major banks' blockchain efforts based on in-depth interviews, and highlights other notable blockchain-based experiments underway by global banks. It also discusses the likely trends that will emerge in the technology over the next several years, and the factors that will be critical to the success of banks implementing blockchain-based solutions.

Here are some of the key takeaways from the report:

Most banks are exploring the use of blockchain technology in order to streamline processes and cut costs. However, they are also looking to leverage additional advantages, including increased competitiveness with fintechs, and the ability to use the technology to create new business models.

Banks are starting to narrow their focus, and are increasingly honing in on tangible use cases for blockchain technology that solve real problems faced by their businesses.

Regulators are taking an increased interest in blockchain technology, and they're working alongside major banks to develop regulatory frameworks.

Blockchain-based solutions will start to emerge in different areas of financial services. The most successful solutions will solve specific problems for banks and attract a large enough network to create widespread benefits.

In full, the report:



Outlines banks' experiments with blockchain technology.

Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews.

Discusses the likely trends that will emerge in the technology over the next several years.

Highlights the factors that will be critical to the success of banks implementing blockchain-based solutions.

Interested in getting the full report? Here are two ways to access it: