Blockchain Use Cases; Banking Industry

Goals

To get a list of blockchain use cases in the global banking industry, and this research will be used to evaluate the disruption of blockchain in banking.

Early Findings

Our first round of research unveiled the following information:

Blockchain & Banking

  • "Blockchain technology can resolve all sorts of problems, including archaic operational processes, slow payment settlements, limited transparency, and security vulnerabilities."
  • "It uses mainstream solutions like accountable and transparent governance systems, improved incentive alignment between stakeholders, secure technology infrastructure, and efficient business models."
  • "In addition, blockchain allows the digitization of financial instruments, which brings greater liquidity, lower costs of capital, reduced counterparty risk, and access to a broader investor and capital base."

Use Cases

Bond Settlement, Cross Border Transactions & Back Office Operations

  • BNY Mellon is a banking and financial services giant, operating across the globe. "They launched the US treasury bond settlement- BDS360 with blockchain technology back in 2016 as a backup record to their system. This blockchain can reduce the three-five days settlement of bonds to 1–10 minutes in a secure, transparent, more affordable, and instant manner."
  • Banco Santander is also using blockchain for improving its current cross border transaction offerings. "Together with Ripple's service Xcurrent, Santander launched One pay FX in 2018 to roll out a distributed app (Dapp) offering same-day International transactions for customers in Brazil, Spain, U.K, and Poland."
  • "UK-based Barclays is experimenting with blockchain as a way to expedite back-office operations and settlement, stating they cut up to $20B in costs by removing intermediaries."

Trade Financing

  • "German bank Commerzbank and LBBW conducted the first test transactions on the blockchain platform for trade financing Marco Polo. The deals involved financing the supply of products from the leading pump and valve manufacturer KSB SE for the technology company Voith."
  • "Future plans are related to the implementation of transactions entirely on the Marco Polo platform, for which it is planned to integrate with client ERP systems, as well as to join transport and insurance companies to Marco Polo, which will expand the available range of services."

Compliance Platform

  • "UBS, Barclays, and Credit Suisse banks test compliance platform on Ethereum blockchain".
  • "The Swiss bank UBS will lead a pilot project whose goal is to automate the regulatory requirements of the EU directive regulating exchange operations MiFID II / MiFIR, which will come into force in 2018."

Blockchain for Productivity

  • "Starting from 2019, the blockchain division of the ING Dutch bank has been testing the technology for ensuring confidentiality and increasing the productivity of the Bulletproofs network."
  • " ING believes that the technology can help banks comply with the requirements of the European General Data Protection Regulation (GDPR) and protect the privacy of customers."

Blockchain for Identity Verification

  • Both Visa and Mastercard have also implemented blockchain technologies; for instance, Mastercard owns up to 30 Blockchain-related patents connected with identity verification, anonymous transactions, and a system that links cryptocurrency with a fiat account.

Other Use Cases

  • "Together with Citigroup, Nasdaq invested into the Chain blockchain ledger to power a shared and trusted distributed database that records all transactions and ownership changes in real time."
  • "Cambridge Blockchain and Tradle are examples of fintech startups that are using blockchain to disrupt banking and working on blockchain-based customer identification systems."
  • "In 2016, Credit Suisse, Symbiont, R3, and Ipreo successfully finished an initial stage of a project related to the use of blockchain technology on the syndicated loan market.
  • In April 2018, seven international banks, specifically BNP Paribas, BNY Mellon, HSBC, ING, Natixis and State Street, have united to support Fusion LenderComm by Finastra, a blockchain platform for syndicated loans."

Most Prominent Use Cases

Technological Disruptions in Banking

Some of the most prominent technologies that are or will be disrupting the financial services industry include:

Proposed next steps:

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