Commonwealth Bank of Australia (CBA), Westpac Banking Corp and Australia and New Zealand Banking Group, three major Australian banks with total assets exceeding $2 trillion, test IBM’s blockchain platform, with aim to make bank guarantee process quicker and more efficient.
The CBA announced that the pilot focuses on retail property leasing. It will run for eight weeks, employing the Lygon blockchain platform.
Initial results demonstrate that bank guarantee issuance time may be reduced “from up to a month to on or around the same day”. Until now, bank guarantees have been issued manually and on paper. Digitalization reduces the risk of fraud.
Michael Thorpe, CBA MD for future cities, institutional banking and markets said that the digitization of bank guarantees can benefit “many other industries and geographies where bank guarantees, or standard letters of credit, are used.”