IBM & partners launch blockchain platform for retail leasing
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Major Australian finance and tech firms comprising ANZ, Commonwealth Bank, IBM, and Scentre Group and Westpac have launched a new pilot program that will bring blockchain into the retail property lease system.
The four companies recently launched a project called Lygon, which uses blockchain to help businesses obtain and manage bank guarantees as part of a retail property lease.
Historically, bank guarantees have been issued manually and on paper. Digitising this process reduces the risk of fraud for all parties involved, decreases the potential for errors and significantly increases the speed of execution.
The Lygon platform could potentially reduce the time it takes to issue a bank guarantee from up to a month to on or around the same day. It could also be applied to many sectors, and it could reduce the risk of fraud across billions of dollars guaranteed by banks.
The pilot will run for eight weeks with live data and transactions for a test group of retail property leasing customers from this week.
In subsequent phases, Lygon plans to expand the range of digitised bank guarantees that it supports across other industries as well as offering its services to other customers in the retail property sector.
The four companies say Lygon is a feat in the development of blockchain solutions, and it’s something no one company could have done alone.
“Leveraging the IBM Blockchain Platform, we have transformed a paper-based banking process into an enterprise grade digital platform ready for live production at-scale,” comments IBM Asia Pacific vice president of blockchain, Paul Hutchison.
“Lygon streamlines the bank guarantee process, making it more secure, helping reduce fraud risks and providing advanced transparency and privacy settings. IBM is proud to be an integral part of this development and to provide the infrastructure for this innovative banking solution which we expect to take off here in Australia and globally.”
The pilot will involve lease holders with retail outlets in some of Scentre Group’s Westfield living centres across Australia. After the pilot, Lygon intends to offer access to the platform to all issuers, applicants, and beneficiaries and support broader use cases over time.
“While the pilot is focussed on retail property leasing, this technology has the potential to benefit many sectors and reduce the risk of fraud across billions of dollars guaranteed by the banks,” comments Westpac general manager of corporate and institutional banking, Didier Van Not.
“This is a significant expansion of the proof of concept we conducted in 2017. We have created a blockchain-based platform to digitise the bank guarantee ecosystem. The pilot will test live transactions using distributed ledger to prove the technology is commercially viable. It is a great example of digital transformation that refines the customer experience.”
The Lygon platform will be operated by Lygon 1B Pty Ltd, a company jointly owned by the five founding members.