More global banks experimenting with blockchain
Bank of China and HSBC are joining the blockchain fan club.
Every so often, a revolutionary technology comes along that changes everything. At present, the financial industry is banking on innovative blockchain technology to re-define the way we manage and exchange digital currency.
All around the world, banks and financial institutions are experimenting with a range of fintech solutions aimed at improving the speed, security, quality and efficiency of the products and processes offered to customers, while also advancing internal business operations.
For example, Bank of China has been experimenting with blockchain technology to provide fast property valuations for mortgage applicants in Hong Kong. The bank intends to officially launch this new service next month, the Financial Times reports.
A decentralised network of property surveyors and banks will be established using a blockchain, allowing valuations to be listed, authenticated and then shared almost instantly.
HSBC China and other Hong Kong banking institutions have also purportedly been testing the waters with blockchain technology.
International law firm Allens recently released a report identifying the "strong potential" of blockchain technology to improve the efficiency and accuracy of payment services and cross-border banking. The report asserted that distributed ledger technology has "the power to shift economies, businesses and behaviours".
However, the report concedes there are critical and technical challenges facing the global implementation of blockchains for everyday use.
"Consensus has not been reached on the best approach moving forward, the ideal business model, and how to maximise value, or monetise, the technology," the report said.
The Reserve Bank of Australia (RBA) recently announced it will introduce an open access payments platform next year, making real-time fund transfers a reality.
Last month global settlements solutions provider Ripple revealed National Australia Bank (NAB) joined Westpac as part of its global blockchain network. Other international banks involved include UBS, Royal Bank of Canada, Santander and National Bank of Abu Dhabi.
Ripple's system allows for direct transactions with real-time certainty to improve cross-border payments.
Earlier this year, the Commonwealth Bank of Australia partnered with a consortium of global banks to test the efficiency of blockchain technology in trade financing for modern markets.
In June, Australian Securities & Investments Commission (ASIC) began consultations to develop a regulatory sandbox – a limited licensing exemption allowing start-ups to test new financial services.
For more information, news and weekly roundups of Australia's burgeoning fintech industry, check out our comprehensive guide to Australia's fintech innovation landscape.