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6 banks join SWIFT's DLT proof of concept trial

6 banks join SWIFT’s DLT proof of concept trial

(24 April 2017 – Global) Six leading correspondent banks have agreed to participate in interbank messaging network, Swift’s proof-of-concept trials to determine if distributed ledger technology could help banks reconcile their nostro databases in real time. 

The exploratory research effort forms part of Swift's global payments innovation (gpi) initiative, which is seeking to develop improved standards for correspondent banking.

The six banks are ANZ, BNP Paribas, BNY Mellon, DBS Bank, RBC, and Wells Fargo. Together, they have committed to working with Swift to identify the challenges surrounding the deployment of distributed ledgers, define the specifications, build the application and ultimately test the concept. An additional 20 banks will join the programme at a later stage to further validate and test the DLT concept.

Wim Raymaekers, head of banking markets and Swift gpi, says: “The nostro DLT proof of concept allows us to explore how this maturing technology can provide a collaborative solution to what our gpi member banks have identified as a significant pain point - nostro accounts reconciliation.”

Utilising the recently released Hyperledger Fabric v1 technology, the PoC application will use a private permissioned blockchain in which user privileges and data access will be strictly governed, says Raymaekers. The data stored on the ledger and the APIs used to query and update it will also be designed to support ISO 20022 message formats.

ANZ transformation project manager Nigel Dobson, said: "We see this as the next logical step to scaling a DLT solution for nostro reconciliation, which in turn will bring significant fulfilment benefits to our customers at the same time as simplifying our operational processes. We also hope to realise additional benefits for wholesale liquidity management with the aim of lowering costs and better managing risk across the Swift community.”

BNY Mellon Treasury Services head of global innovation, Christopher Mager added: “Distributed Ledger Technology holds the potential to dramatically reduce the need for reconciliation in a shared ledger environment."

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