IBM is one of the biggest and most popular international tech heavyweights in the world. The company has shown an active interest in blockchain technology over the years - and their latest offering is a blockchain-based platform for banks and financial services companies, LedgerConnect. As of now, nine major names have been involved with this project, including the likes of Barclays and Citi.
Over the past few years, banks have been looking forward to making use of the blockchain technology to make banking more efficient as well as more secure. Banks and financial services companies across the world have been experimenting with blockchain for purposes such as the issuance of loans to even international remittance of funds and settling trades. IBM has created LedgerConnect in association with Foreign Exchange Services company CLS.
The LedgerConnect platform is expected to help its user organizations with various banking and finance-related tasks, including but not limited to: KYC processes, collateral management, market data tracking, reconciliation processes, etc. IBM is pitching LedgerConnect as a one-stop space for all financial services organizations looking forward to tapping into the blockchain technology.
The platform is hosted on a single network - which makes inter-bank functionalities easier. If different banks work on different blockchain based platforms, it becomes a challenge when it comes to inter-bank transactions and transfers. However, considering that this platform is hosted on a single network, applications developed on this platform by different banks would make it easier for inter-bank operations. With names such as Barclay and Citi working on an initial proof of concept phase, it is expected that IBM will soon make the app available for a larger number of organizations.
Keith Bear, IBM's vice president for financial markets, commented on this platform to Coindesk, saying:
"Having a secure network and proven infrastructure allows an app store kind of model, where banks can identify applications from certified fintech and software providers and deploy these apps over a seamless blockchain network."
On Banking, Blockchain, and IBM
IBM has taken an active interest in the blockchain technology. Especially over the past few months, the company has been working on a number of projects. In April, IBM’s TrustChain project made news - which was aimed at the jewellery industry. Earlier, IBM had also commented that the company intends to launch two major blockchain-based applications for the shipping industry. Most recently, IBM secured a billion-dollar deal with the Australian government for blockchain based projects.
IBM has realized that the banking and Fin-Tech sector has been experimenting with blockchain tech quite actively. With the LedgerConnect app, the company intends to provide all the financial services organizations with a common platform for blockchain development. It will be interesting to see how banks respond to this.
In addition to IBM, names such as Ripple have also been working towards helping banks get on the blockchain bandwagon. Ripple has teamed up with a number of financial services organizations from the US and Japan - and has also been expanding its presence in Asian markets as well as the Middle East. Blockchain in Banking is indeed proving to be an opportunity for several innovations.