ANZ, CBA, Westpac trial blockchain powered bank guarantee platform

COLLABORATION is, without a doubt, one of the most effective ways to foster innovation, especially when it comes to tackling a technology as sophisticated as the blockchain.

Perhaps that is what brought three of Australia’s biggest banks – ANZ, Commonwealth Bank of Australia (CBA) and Westpac together to build a blockchain platform meant to “transform the way businesses obtain and manage bank guarantees”.

Traditionally, bank guarantees – often a requirement of a retail property lease – are issued manually, on paper. The issuance process could take up to a month, is prone to errors, and poses a high risk of fraud. The new distributed ledger platform could solve all these issues immediately.

In fact, the platform might be able to expedite the process to a point where bank guarantees could be issued within the same day.

Since bank guarantees are an essential part of the relationship between malls and their retail partners,

“The current paper-based process is a pain point for us and for our retail partners because of the time involved and the manual nature of the process, taking valuable time away from focusing on customers,” explained Australian Real Estate Giant Scentre Group Director John Papagianni.

The platform is currently on an eight-week-long pilot with live data and transactions being supported by the Scentre Group, its customers, and the country’s three biggest banks.

Broader applications in the pipelines

After initial stages, the platform would be made accessible to all issuers, applicants, and beneficiaries of bank guarantees, before expanding the range of the digital solution to support other industries as well.

Nigel Dobson, who lead the banking services at ANZ, said that retailers of all sizes with physical outlets would experience markedly improved cycle times when it comes to bank guarantees, with this solution.

“Additionally, retail landlords will benefit from managing their outstanding guarantees in a secure, transparent and auditable manner,” said Dobson.

Meanwhile, Westpac General Manager — Corporate and Institutional Banking — Didier Van Not said that the pilot project, among others, will test live transactions using a distributed ledger to prove the technology is commercially viable.

“It is a great example of digital transformation that refines the customer experience.”

Despite the earlier promise and potential of blockchain technology, enterprise adoption of it has been relatively slow. However, as the technology begins to mature, organizations are exploring and experimenting with the technology to solve real business problems.

And collaboration such as this one could very well hold the key to unlocking the transformative effect of blockchain.

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