Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Case: Harnessing the power of blockchain
Blockchain has the potential to change today's financial
landscape dramatically. It is a system of accounting records
shared between multiple parties, enabling them to carry
out transactions safely, such as payments between banks.
Blockchain can make transactions faster and more reliable.
The technology is complex. To examine thoroughly whether
it can be genuinely useful for Rabobank, we are experimenting
extensively in our own Blockchain Acceleration Lab and
examining dozens of test cases. We have experimented with
over 20 blockchain cases where we combined client needs
with the possibilities of blockchain.
Last year we were involved in one of the first real-world use
cases of blockchain technology by financial institutions.
Rabobank and other European banks - Deutsche Bank,
HSBC, KBC, Natixis, Société Générale, Santander, Nordea
and UniCredit - partnered to create the We Trade platform
that aims to make domestic and cross-border trade easier
for European companies. The so-called Digital Trade Chain
platform enables cross-border transactions for SMEs.
This product will simplify trade finance processes for SMEs
by addressing the challenge of managing, tracking and
securing domestic and international trade transactions.
By maintaining secure records on a digital distributed ledger,
We Trade will accelerate the order-to-settlement process and
sharply reduce administrative paperwork.
We see many potential applications for blockchain. In the
Food Agri sector, for example, the digitalised approach to
managing supply chains through blockchain could benefit
farmers, traders, processors, supermarkets, and consumers by
boosting transparency and efficiency. Blockchain is unlike many
new digital agriculture technologies, which usually focus on
an individual segment of the Food Agri value chain.
Rabobank is therefore working together with clients to
explore strategic partnerships that rethink current practices
in trade and commodity finance. We are experimenting with
using blockchain to benefit players throughout the food
value chain.
'Ecosystem'thinking to solve business bottlenecks
Flow does a bank become a true strategic partner and trusted
advisor to corporate customers? One way we are enhancing
this role is through our ecosystem approach, which we
launched in 2017. It's helping us make new connections,
devise new products and solutions, and enrich our dialogue
with clients.
The holistic, sector-focused ecosystem approach combines
our Food Agri expertise, enthusiastic, professional
employees worldwide, and conversations with players across
the F&A value chain to help find tangible solutions to clients'
business bottlenecks.
So how does it work? First, we identify a 'pain point'-a real or
perceived problem- affecting a small sub-sector within Food
Agri. Then, we investigate this issue in-depth, talking to all
relevant players to understand all the dynamics. Our open,
agile, non-hierarchical way of working that invites the
participation of people from all parts of the bank, whatever
their department or level of seniority.
Take organic grain in the US, one of the first issues we tackled
with our ecosystem approach. We knew that consumer food
companies were keen to 'premiumise'their products and
capture strong demand growth for organic products but they
struggled to find a reliable supply of high-quality, domestic
organic grain. But why weren't more farmers converting to
organic production to benefit from that demand?
Our six weeks of investigation included conversations with
farmers, grain traders, protein companies, large branded food
companies and players across the supply chain, like logistics
companies. Representative of Rural Retail Banking based in
Nebraska, Wichita, St Louis and San Francisco joined a team
of Wholesale representatives based in New York, Chicago,
Atlanta, Toronto, London and Utrecht. In addition to the
Research department and Risk Department ten product
groups were represented. The team already knew that the
main challenge of'going organic'was the three year
conversion period (which represents a daunting financial
hurdle) but they discovered a range of related challenges.
For example, going organic requires sufficient special
infrastructure: organic commodities must be carried by
special trucks and kept in dedicated silos.
Based on our research and follow-up work, we generated
tangible ideas to relieve the pain points in organic grain
production. These include creating online information and
support groups to help farmers engage with the topic,
exchange information and take practical steps.
Rabobank Annual Report 2017 - Management report
35
