CLS and IBM launch Blockchain App store for Banks

“Savings from blockchain could be $7-12 billion in post-trade and $5 billion in KYC (know your customers)”[1]

 

– Keith Bear, Vice president, Global Financial Markets, IBM

Nine financial establishments including Barclays and Citigroup are participating in a proof of concept for a financial blockchain ‘app store’, LedgerConnect. LedgerConnect launched by IBM and foreign exchange giant CLS will be a distributed ledger technology (DLT) platform. The platform is designed to enable banks, firms, fintechs and software vendors to share and consume services built on a shared distributed ledger network.

Introducing LedgerConnect: Blockchain infrastructure for the financial services industry

“Accenture has estimated that the biggest investment banks could save $10bn by using blockchain technology to improve the efficiency of clearing and settlement.”

– Financial Times

Described as a “foster ecosystem for financial institutions”[2] by CLS, could LedgerConnect challenge cryptocurrencies snatching away banks control of monetary policy?

LedgerConnect will allow financial institutions to access services, in areas such as KYC processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation. As well as, market data to realise operational efficiencies and cost savings across asset classes.

With the rise of technology against a centralised authority, a framework such as LedgerConnect aims to bridge the connectivity gap between fintechs and large technology firms alike, with banks. Instead of the complexity of these firms creating their own distributed networks, LedgerConnect allows banks to consume their various applications on one platform.

Cryptocurrencies may come and go, however, what is potentially changing business and finance is the Hyperledger fabric. There are many areas of banking which could be transformed by blockchain, according to the financial times, the key areas are clearing and settlement, payments, Trade and finance, Identity, and syndicated loans.[3] Projections on savings on clearing and settlement alone through adopting blockchain are estimated at £10bn[4] through improving efficiency and performance.

The key advantage of blockchain technology is transparency and security. The actions of all participants are open and visible in real time, which prevents forgery of information. The Certified Blockchain Professional course provides a 100% hands-on thorough overview of blockchain technology and its implementation to the real world.

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