ANZ, Westpac and IBM have successfully completed a trial run of blockchain technology for bank guarantees on commercial property leasing.
The trial, run with shopping centre operator Scentre Group, used distributed ledger technology to replace paper-based guarantee documents, resulting in a single source of information with reduced potential for fraud and increased efficiency.
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, ANZ’s general manager wholesale digital, said the bank had been keen to avoid the hype surrounding blockchain and instead had focused on practical and deliverable use cases.
“This proof of concept demonstrates how we can collaborate with our partners to develop a digital solution for customers, which also has the potential for industry-wide adoption,” he said.
Andrew McDonald, general manager corporate and institutional banking at Westpac, said the new process is about removing the cost of fraud, error and operational risk.
“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.”
Joanna Batstone, director of IBM Research Australia, said she believed blockchain could potentially drive productivity across all Australian industries.
Separately, Westpac is one of 22 additional global banks to join Swift’s blockchain proof of concept designed to validate whether the technology can help banks reconcile their international nostro accounts in real time.