Traditional paper based contracting in the banking world may be a thing of the past. That is if other banks take the route recently travelled by two Australian banks in partnership with IBM.
Australian banks ANZ and Westpac have teamed with IBM and shopping center operator Scentre Group and have now successfully digitized the bank guarantee process used for commercial property leasing.
Distributed Ledger Technology
The trial used Distributed Ledger Technology (DLT) to eliminate the need for current paper-based bank guarantee documents, resulting in a single source of information with reduced potential for fraud and increased efficiency. DLT powered by Hyperledger Fabric V1.0 is a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation. DLT is part of what underpins a blockchain.
Tracking and reporting
In addition to eliminating the need for physical document management, the trial also addressed other inefficiencies in the current bank guarantee process, including the challenges in tracking and reporting of a guarantee’s status through multiple changes.
Nigel Dobson, General Manager Wholesale Digital, Digital Banking at ANZ, said: “We have been keen to avoid the hype surrounding blockchain and distributed ledger technologies, and instead focused on practical and deliverable use cases.
Wider adoption Plans
“Next steps involve encouraging all industry players to adopt this technology so we can better protect and save money for our customers. Beyond that there is no reason why this couldn’t be applied across other industries.”
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