Australia`s top three ranked banks said on Thursday they will experiment the latest bank-guarantee system for consumers that depends on a shared database, purporting the project would usher in the first use of blockchain technology to process retail financing in the world.
New Zealand Banking Group Ltd, Westpac Banking Corp, and Commonwealth Bank of Australia are partnering with local Westfield mall owner Scentre Group to experiment the IBM software`s use to process financing contracts on the same platform.
Businesses use guarantees, usually delivered manually and on paper, to convince their landlord-Scentre that they can settle their rent despite of sales. The banks conducting the test believe shifting to blockchain could reduce processing duration from a month to a day and the risk of fraud as well.
Though the project is just experimental, it portrays optimism towards clients and banks accepting blockchain, a decentralized record-keeping technique recognized for hosting payments in cryptocurrency, but limited to tests in the mainstream business globe.
ANZ`s leader of digital banking, Nigel Dobson said that focused on certain inquiries and responses we`ve had via other financial organizations, and also via IBM`s platform, this is a first. It`s for somehow narrowly used but the potential to scale the product set that could be controlled and safeguarded, stored and maintained on the platform is pretty critical, even above bank surety.
On another statement, Dobson said that there weren`t such quick plans for the Australian banks to consider launching a cryptocurrency 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 signal of the expanding adoption of blockchain, he also observed a more secure to fraud than transactions processed by one computer since it includes storing documents in several locations.
Blockchain is an automated, computerized network to verify, share and permanently store or record data.
The technological technicalities behind cryptocurrencies have been growing friction among mainstream businesses. The social media giant, Facebook plans to introduce a new world cryptocurrency known as Libra, and ASX Ltd, Australian markets operator is integrating user development and experimenting.
In the banking sector, approximately 300 lenders worldwide, including No.4 Australian lender National Australia Bank, Westpac, and Commonwealth have heavily invested in blockchain developers R3 LLC as they brainstorm on how to conclude processing bottlenecks.