National Bank of Canada has launched a pilot program that uses blockchain technology to enable its business customers to more easily arrange financing, the Montreal-based bank announced Monday.

The bank has teamed up with tech firms CGI Group Inc. and Skuchain on a project that aims to streamline the process for negotiating trade finance arrangements, such as standby letters of credit and guarantees, by enabling customers to initiate and conclude negotiations on smart contracts.

The program will improve processing times, reduce risks and help strengthen the bank’s customer relationships, the bank says.

“By leveraging templates pre-approved by banks and negotiations on a distributed ledger, the integrated platform automates the coordination necessary to issue a standby letter of credit or guarantee. The newly streamlined process offers visibility across the lifecycle, lower costs for all parties, increased security and more effective collaboration,” the bank says in a news release.

“This pilot project is a great opportunity to leverage blockchain technology to simplify the process for negotiating standby letters of credit and guarantees while making it more transparent and secure. This will enable us to offer a simple, fast and efficient experience to our commercial clients which facilitates managing their business,” says Patrice Roy, vice president, payments, cash management and international solutions at National Bank.