Global Banks Testing Blockchain to Speed up Transactions – 75 join Interbank Information Network (IIN)
According to a report today in the Financial Times – JPMorgan has widened blockchain payments to more than 75 banks. Richard Chambers, COO of blockchain investment platform InvestX and former director at Royal Bank of Scotland’s Corporate Transactions Team, commented on the news:
“JP Morgan’s Interbank Information Network is one example where the banks are using blockchain technology to even the playing field versus fintech startups such as TransferWise which has a lower cost base.
From the article:
“More than 70 additional banks, including Société Générale and Santander, are joining the Interbank Information Network (IIN) which JPMorgan, Royal Bank of Canada and ANZ have been trialling for 11 months to see if blockchain technology can speed up payments that have errors or require additional compliance checks. The idea is that a mutually-accessible ledger across banks would allow them to quickly resolve issues such as compliance checks, faulty addresses or missing data, which can lead to payments being held up for weeks. The banks expect to put about 14,500 US dollar-denominated payments a day through the enlarged network.”
“Despite popular opinion, large banks have been looking at blockchain for years for various use-cases across payments, settlements and issuance. It promises to both reduce cost and increase speed of reconciliation. It’s also starting to be used in private equity and venture capital, where it can bring liquidity to normally illiquid markets.
“The more the traditional banks begin to understand the benefits blockchain technology can bring, the better, but their bureaucratic structures and cartel like behaviour mean that adoption will be at a snail’s pace whilst innovative market entrants win market share and, importantly, customer’s trust.”