Four South African banks have joined the Society for Worldwide Interbank Financial Telecommunication’s (SWIFT’s) blockchain proof of concept initiative, joining a number of major global banks in doing so.
The initiative aims to determine whether blockchain can assist banks improve their global liquidity by reconciling their international nostro accounts, which are accounts that a bank holds in a foreign currency within another bank, in real-time, according to ITWeb.
South Africa’s four traditional banking giants, Absa Bank, FirstRand Bank, Standard Bank and Nedbank have joined the blockchain proof of concept initiative.
In doing so, the four South African financial institutions form part of 22 global banks that recently committed to the initiative, including the likes of Banco Santander, China Construction Bank, Deutsche Bank, JPMorgan Chase Bank, Lloyds Bank, Standard Chartered Bank and UniCredit, SWIFT revealed.
Launched at the beginning of 2017, the initiative looks to overcome the challenges regarding monitoring and managing of international nostro accounts, which are fundamental to cross-border payments.
The absence of real-time reporting coverage is an issue that affects monitoring of account positions, and this is something that the initiative will aim to address with the help of the global banks involved.
The banks will test and validate the proof of concept’s blockchain application, and determine the scalability and performance of the technology in various markets.
Wim Raymaekers, head of banking markets at the Society for Worldwide Interbank Financial Telecommunication is pleased about the fact that the banks have joined the initiative.
“Collaboration is the cornerstone of innovation,” said Raymaekers, according to Coinspeaker. “This new group of banks allows us to greatly extend the scope of multi-lateral testing of the blockchain application and thus adds considerable weight to the findings. We warmly welcome the new banks and look forward to their insights.”
Commenting on what the blockchain proof of concept initiative can bring to the table for Absa bank, chief technology manager Sean Mouton explained the importance of real-time data.
“This POC has value to us as banks, that if we get it right, we can identify unwanted and fraudulent transactions inter day and not only when we do our nostro reconciliations,” Mouton said, according to ITWeb.
The blockchain proof of concept application will now experience thorough testing by the various global transactional banks, with results set to be published in September.
