Two of Australia's largest banks, ANZ and Westpac, have built a small-scale proof-of-concept for a new blockchain-based system.
The two institutions have teamed with IBM and shopping centre operator Scentre Group and have now successfully digitised the bank guarantee process used for commercial property leasing.
Their proof-of-concept focused specifically on bank guarantees for commercial property leasing in an effort to prove the feasibility of the technology in a short period of time.
Broader Use Explored
However Westpac and ANZ say they expect blockchain technology to be applicable to broader bank guarantees.
They claim distributed ledger technology (DLT) has the potential to remove a number of inefficiencies from the management of bank guarantees, like the costs, risks, and delays associated with physical document management, as well as tracking and reporting on the status of guarantees.
Using an industry-wide distributed ledger would enforce standardisation, making negotiations easier and faster for all parties, the banks say.
Over Hyped
«We have been keen to avoid the hype surrounding blockchain and distributed ledger technologies, and instead focused on practical and deliverable use cases,» said Nigel Dobson, General Manager Wholesale Digital, Digital Banking at ANZ.
«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,» Dobson added.
