Source: Reuters
Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd are teaming up with local Westfield mall owner Scentre Group to test the use of IBM software to process financing contracts on the same network.
Australia’s three biggest banks said they will test a new bank-guarantee platform for shopkeepers that uses a shared database, claiming the project would mark the world’s first use of blockchain technology to process retail financing.
Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd are teaming up with local Westfield mall owner Scentre Group to test the use of IBM software to process financing contracts on the same network.
Retailers use guarantees, typically issued manually and on paper, to assure their landlord – Scentre, in this case – that they can pay their rent regardless of sales. The banks running the trial believe switching to blockchain could cut processing time to a day from a month and reduce the risk of fraud.
Though the project is a trial, it represents a step toward banks and clients adopting blockchain, a de-centralised record-keeping concept known for hosting payments in cryptocurrencies but confined to experiments in the mainstream business world.
“Based on some of the inquiries and feedback we’ve had through other financial institutions and also though IBM’s network, this is a first,” Nigel Dobson, ANZ’s head of digital banking, told Reuters over telephone on Thursday.
“It is for a relatively narrow use case, but the scope to expand the product set that could be stored and maintained, managed and secured on the network is pretty significant, even beyond (bank) guarantees.”
On whether the Australian banks would consider launching a cryptocurrency, Dobson said there were no such immediate plans but “if it made the platform more attractive, made it work faster and gave it some global scale, then we certainly wouldn’t rule out considering it in the future”.
In a sign of the growing popularity of blockchain, also seen as more resistant to hacking than transactions processed by a single computer since it involves storing records in multiple locations, Facebook last week said it was planning its own cryptocurrency, which it would call Libra.
In the banking sector, about 300 lenders globally, including Commonwealth, Westpac and No. 4 Australian lender National Australia Bank, have invested in blockchain developer R3 LLC as they look to end processing bottlenecks.
