Another major joins bank guarantee blockchain platform
The Commonwealth Bank has joined ANZ, Westpac and IBM on the next phase of its bank guarantee blockchain platform.
On Thursday the consortium – including Scentre Group – announced that a pilot program will run for eight weeks with live data and transactions for a test group of retail property leasing customers
The live pilot branded Lyon will drive the digitization of bank guarantees through platform.
Historically, bank guarantees have been issued manually and on paper.
Digitising this process reduces the risk of fraud for all parties involved, decreases the potential for errors and significantly increases the speed of execution.
In subsequent phases, Lygon plans to expand the range of digitised bank guarantees that it supports across other industries as well as offering its services to other customers in the retail property sector.
Thousands of retailers around Australia - from single store operators to national and international brands - need bank guarantees from their banks to secure a lease over a retail tenancy.
The pilot will involve lease holders with retail outlets in some of Scentre Group’s Westfield living centres across Australia.
After the pilot, Lygon intends to offer access to the platform to all issuers, applicants, and beneficiaries and support broader use cases over time.
Lygon has the potential to benefit many sectors and to reduce the risk of fraud across billions of dollars guaranteed by the banks.
“While the pilot is focussed on retail property leasing, this technology has the potential to benefit many sectors and reduce the risk of fraud across billions of dollars guaranteed by the banks,” Westpac general manager corporate and institutional banking Didier Van Not said.
Collaborative industry approach
“This is a significant expansion of the proof of concept we conducted in 2017. We have created a blockchain-based platform to digitise the bank guarantee ecosystem.
“The pilot will test live transactions using distributed ledger to prove the technology is commercially viable. It is a great example of digital transformation that refines the customer experience,” Van Not said.
This is not the first time the banks have moved into blockchain.
The partnership saw the team develop a programmable money prototype, creating money that knows how it can be spent using blockchain as a rules engine and the New Payments Platform for instant payments, and apply it to the National Disability Insurance Scheme.
“Commonwealth Bank has a strong track record of collaborating to innovate through blockchain technology,” Commonwealth Bank managing director, future cities Michael Thorpe said.
“This pilot is a collaborative industry approach to explore how we could use blockchain technology to revolutionise bank guarantees and make the process simpler, easier and more transparent for our business customers.”