Three of Australia's largest banks ANZ, Commonwealth Bank of Australia (CBA) and Westpac have formed a company with Westfield Mall Operator Scentre and IBM, to build a block-based bank guarantee platform.
Named Lygon, that platform will "change the way businesses achieve and handle bank guarantees".
Usually bank guarantees – often required as part of a property lease – are issued manually on paper. The process can take up to a month and is at risk of fraud and fraud.
"Bank guarantees are an important part of our relationship with our dealers, and each year we complete several thousand leases over our entire portfolio," explained the Centre's executive leases and retail solutions, John Papagiannis.
based process is a pain point for us and for our dealers because of the time and manual nature of the process, and takes valuable time away from focusing on customers, "he added.
By digitizing the process could guarantee be issued "on or around the same day", the companies said in a statement.
An eight-day pilot of Lygon, built on IBM's Blockchain platform, started yesterday with live data and transactions for a test group of real estate leasing customers. These customers are all lease owners with a store in some of the Scentre Group's Westfield centers across Australia.
In subsequent phases, Lygon will offer access to the platform of all issuers, applicants, and recipients, and extend the scope of digitized bank guarantees it supports in other industries.
"Retailers of all sizes with physical outlets will experience radically improved bank guarantee cycles times. In addition, landlord landlords will benefit from managing their outstanding guarantees in a secure, transparent and auditable manner, says ANZ's banking executive Nigel Dobson.
Michael Thorpe, CEO, future cities, institutional banks and markets, at CBA, added that the approach could be applied to multiple industries and geographical areas, anywhere "bank guarantees or standard credit cards are used".
"The pilot will test life transactions using distributed leads to prove that the technology is commercially viable. It is a good example of digital transformation that enhances customer experience," said Didier Van Not, Westpac's corporate and institutional banking manager.
The Lygon pilot follows a similar proof of the concept run by Westpac, ANZ, Scentre and IBM in 2017. A resulting white paper on the trial concluded that full benefit of the technology would "only be realized through broad industrial adoption" and noted that maturity until the technology had to be addressed.
CBA has performed a number of block-chain-based actions; including a partnership with the World Bank to issue the first bond loan globally to be "created, assigned, transferred and managed by blockchain technology" and the use of a blockchain trading and tracking platform of seventeen tons of almonds.
"Commonwealth Bank has a strong record of collaborating to innovate through blockchain technology. This pilot is a collaborative industry approach to exploring how we can use blockchain technology to revolutionize bank guarantees and make the process easier, easier, and more transparent to. our business customers – simplify document exchange, use of real-time monitoring and increased issuance process, "said Thorpe.
Lygon's five founding companies have formed a joint venture – Lygon 1B Pty – to operate the platform.
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