Ensuring the authenticity of Credendo’s Surety Bonds by adding a blockchain-enabled Trust Layer
In its commitment to innovation, Credendo, through its innovation vehicle AREA42, is proud to announce the launch of a blockchain-powered platform offering easily verifiable trust to its stakeholders for surety bonds. This platform is the fruit of collaboration with a Belgian technology partner, T-Mining.
“The blockchain application is a first concrete realisation of AREA42. This innovation vehicle is enabling Credendo to achieve its goal of becoming a leader in credit insurance innovation and a partner for new products and new solutions. Although frequently overhyped, blockchain technology has proven its business value for this use case” said Dirk Terweduwe, Group Chief Executive Officer of Credendo.
Surety made easy
For all parties involved, it is critical that all the information included in the bond is 100% trustable and verifiable. Any fraudulent manipulation of information like the amount covered, the validity date or the emitting party could drastically impact the underlying international trade relations, which highly depend on mutual trust and reputation.
Using a decentralised network to register surety bonds in blockchain, the platform provides immutability, superior authenticity, and integrity towards its principals, beneficiaries, brokers, and surety provided by Credendo – Excess & Surety, which is a subsidiary of Credendo that offers excess of loss, top-up cover and surety bonds.
In practice, a surety bond is a financial instrument used to facilitate international trade. It is a form of guarantee provided by Credendo (the surety provider) to indemnify the beneficiary that wants to be compensated in case the principal (contract executor) fails to fulfill the terms of the contract.
Fluent and secure business process
The business process flow is the following:
Figure: Registration of surety bonds in a blockchain-powered platform
The broker introduces the principal to Credendo via a framework contract;
The principal will request a bond to Credendo;
Credendo will assess the request and, if approved, will issue a Surety bond;
Via the platform, the bond is registered in the blockchain network;
The beneficiary receives the bond via email. He can consult the bond by opening the link in the email;
In addition, the beneficiary can verify the authenticity of the bond in the blockchain by simply clicking or scanning the QR code. By doing so, he can check if:
this bond has really been issued by Credendo;
the content mentioned in the bond is correct;
the bond is still valid or has not been withdrawn in the meantime.
Apart from this, an audit trail is available for personnel of Credendo, providing an overview of the bonds, the data associated with them, and the history log.
A layer of easily verifiable trust
Eckhard Horst, General Manager of Credendo – Excess & Surety
“With this implementation we added a blockchain layer underneath a running application, resulting in an additional layer of easily verifiable trust.”
Dirk Terweduwen, Group Chief Executive Officer of Credendo
“The platform is now running live in Germany, in close collaboration with a selected group of 10 clients, and Credendo aims to open its platform to all Germany-based brokers by the end of the year. “Within the next 2 years, Credendo intends to deploy this platform to additional European countries.”
Jon Holvoet, CCOE Manager of Credendo
“With a blockchain-enabled trust layer, we now allow parties to easily verify the authenticity of our Surety bonds. Without any upfront blockchain knowledge, our ICT partner was able to easily integrate the existing Credendo application with the decentralized platform, using the T-Mining API.”
Filip Heremans, CPO of T-Mining
“Using our Secure Document Workflow solution, we connected the existing Credendo application with the blockchain, providing our document notary service for every Credendo Surety Bond.”
Lode Vermeersch, Group Chief Strategy & Innovation Officer at Credendo and Head of AREA42, the innovation vehicle of Credendo
“Although frequently overhyped, Blockchain technology has proven its business value for this use case. It was demonstrated during our testing phase of the solution.”
The Credendo press release can be found here in 4 languages.
https://www.credendo.com/press/credendo-innovating-blockchain