Blockchain is once again at the center of an initiative to improve operational efficiency and reduce costs, this time in the field of correspondent banking. A blog post by the team, comprising of a partnership between Wells Fargo, Swift and ANZ, has described the prototype system they have created using blockchain. Using a distributed ledger to create a real-time transaction log, the system will track payments made on the swift platform to enable banks to track such payments much quicker. The system should offer significant improvements over current methodology.
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Much has been written about the possibilities that Blockchain technology represents in a variety of markets, especially the finance industry. Not just words either, with billions of dollars raised by startups covering everything from transforming the way financial transactions are carried out to tracking cargo around the world, blockchain seems to provide endless opportunities for the cryptocurrency industry. It is the banking industry that seems to have adopted Blockchain more enthusiastically than most though, and a recent announcement by Wells Fargo gives us a hint at what that investment could look like eventually.
In partnership with ANZ and Swift, Wells Fargo have completed a prototype for correspondent banking using blockchain as announced in a recent blog post that details their progress. The prototype is intended, they say, to improve the efficiency and speed of cross-border correspondent banking payment, reconciliation and settlement. The prototype system uses a distributed ledger to provide a real-time transaction log of payments made via the swift system, allowing banks to quickly reconcile payments made through swift via the new technology.
Wells Fargo head of global product management, Judd Holroyde, said in a statement that “There is a clear opportunity to create a better customer value proposition by offering real-time financial transaction status tracking, better visibility on financial institutions' fees to and from participating partners, more accurate recovery of fee revenue, and faster resolution of disputed billing transactions.”
More efficiency and cheaper costs for currency transactions will bring many benefits long term, while also once again illustrating the voracity of cryptocurrency technology in terms of its effectiveness and stability for financial use.
This move once again reinforces the value and flexibility of blockchain technology and the increasingly important role it would seem to be destined to play in out futures. It doesn’t matter what aspect of life we choose, there seems to be an initiative that is leveraging the power of blockchain to improve things, it is a remarkable situation for a technology that first appeared at the turn of the decade.