Commonwealth Bank of Australia (CBA), Westpac Banking Corp and Australia and New Zealand Banking Group, three Australian banks with total assets north of $2 trillion, are trialing IBM's blockchain platform, aiming to make bank guarantee process quicker and more efficient.
CBA announced the news Thursday saying that the pilot, currently focused on retail property leasing sector, will run for eight weeks, using the blockchain platform “Lygon.”
Initial trial results have shown that the platform has the potential to cut bank guarantee issuance time “from up to a month to on or around the same day,” per the announcement. Traditionally, bank guarantees have been issued manually and on paper, CBA said, adding that digitizing the process also reduces the risk of fraud for all parties involved.
Michael Thorpe, managing director for future cities, institutional banking and markets at CBA said that the digitization of bank guarantees can benefit “many other industries and geographies where bank guarantees, or standard letters of credit, are used.”