Barclays Insight: Riding the Wave of Innovation
Wave CEO Gadi Ruschin, shares how the company is changing the way global trade is carried out and the invaluable experiences they gained from the Barclays Accelerator powered by Techstars programme.
What is Wave and what makes it unique?
Wave is transforming the way original shipping documentation (Bills of Lading*) are transferred between parties using blockchain technology. By using distributed ledger technology on the blockchain, everyone involved in a transaction can receive, transfer titles and send documentation through an extremely secure decentralised network.
Our goal is to remove the need for a physical paper trail and reduce the time taken to complete an end-to-end trade finance transaction from many days to just a few hours. This in turn significantly reduces processing costs and late shipping charges, as well as the risk of errors or documentary fraud.
- What are Bills of Lading?
Bills of Lading are the documents that evidence ownership of a cargo shipped by sea. Transferring them from one trading party to the next in a supply chain is a system that has been in place for more than 500 years. However, the process is both complicated and costly, with a high number of international participants, leading to lots of paperwork, counter-signing and courier journeys. Currently, up to 5% of the cost of a trade transaction can come from the handling of documentation alone.
Where did the idea for Wave came from?
Having worked for many years in the garment industry I was familiar with how the global trade industry worked. As I began to learn more about the blockchain I became curious with how we could use its technology to bring about more efficiencies in global trade. I was convinced that paper and envelopes involved in trading could be replaced by digital documents. With my cofounders, Or Garbash and Yair Sappir, who worked in intelligence and information security within the defence sector respectfully, we came up with this idea. We recognised early on there was a need and appetite to test new ways of working in trade so we jumped on the opportunity and set up Wave.
Do people need to understand how the blockchain works to do business with you?
People seem to be really intrigued by the potential of the blockchain. It’s important to remember that the blockchain is just technology. Most of the people Wave does business with don’t need or want to know the micro details of how it works; they just want to know that it works. I try and position Wave as a company simply using the technology of the blockchain rather than as a blockchain company.
Ultimately I describe our product as similar to Outlook, like sending or receiving an email. Our interface talks and connects various parties involved in a transaction. We chose to use blockchain as it was the only way of transferring money without having to get a third party involved. Traditionally in trade transactions multiple parties are involved, which in my view causes unnecessary overhead costs. Today, when buying something most people pay a surcharge of about 5% to cover costs imposed on the supply chain due to the use of paper documents. This could become a thing of the past.
What are the risks involved?
I often get asked this question. There are always risks when working in information and cyber security, but not to the extreme that my co-founders and I are worried about. The systems we use are not those which have experienced the reported hacking or bug issues.
How did you hear about the Barclays Accelerator programme and what did you get out of the programme?
We heard about the Accelerator programme after a meeting with the CEO of Barclays Israel, two days before the application process was due to close. We realised that Barclays was very interested in our business so submitted a last minute application.
During and since the Accelerator programme 18 months ago, Barclays has helped connect us with the banking sector and has been extremely supportive of working with us. I believe the pace at which we have worked together and what we have achieved in such a short space of time – namely becoming the first organisation to complete a global trade transaction using the blockchain – exemplifies Barclays’ strong support for and commitment to start-ups.
Our goal is to become fully commercial by the end of 2017, which I believe is absolutely possible. Once we have reached this milestone we would like to broaden our scope and offering.
